Real Estate Negotiation: How to Get the Best Deal
Whether you are a buyer or a seller, the process of negotiating a real estate deal can be complex. All parties are looking to get the best for their money, and in most instances, each side has a different definition of the word “fair.” Going into a purchase (or a sale) with an understanding of how to negotiate terms that are best for you is the first step in a successful real estate transaction. Here are a few helpful hints to end up on top.
Do your research
What area are you purchasing? What is the fair market value assessed on the property you want to buy/sell? What are comparable properties in the surrounding area selling for? These are all questions that will give you an idea of what to ask for when entering in a real estate negotiation. You don’t want to enter the situation with a lower or higher number than what is reasonable – knowing what is fair to ask for in the situation can save a lot of time and avoid disappointing conversations in the long run. Having a good understanding of the area that the property is in can make a large monetary difference when negotiating price.
Know where you stand
Understanding your bargaining position can make a real difference in negotiating a sale. Let’s say the property that you’re looking at is on the verge of foreclosure. This is an entirely different bargaining position than a property that has 6 or 7 interested investors fighting over the space. Alternately, if you are looking to sell fast to the first person who offers you a good deal to get from under a property, this is an entirely different position than if there are several interested parties wanting to make the purchase. Understanding your position and playing it to your advantage is imperative to a successful real estate negotiation.
Know what’s wrong
A lot of times, the first number a person looks at when looking at real estate prices is the selling price, then only expects a slight variation from there. Even though this is a great starting point, negotiating the final deal can be a little more complex.
Are there repairs that need to be made to the property? What were the results of the appraisal? Is anything in addition to the property being included in the sale? Incentives? New appliances? Closing costs? Will you offer any of these things in your selling price? These are all small things that can make a difference in a real estate negotiation. The value of the things that are included in the sale of a property affects the value of what you are buying/selling. Gauging their value and how it affects you can make a significant difference.
How you/they will pay for it
Anyone can look at a piece of real estate that is for sale. The Million Dollar Question is “How will you pay for the property?” Is the purchaser pre-qualified or pre-approved for an amount? With that financing, are there certain things that have to occur before the financing is approved?
An example of this would be whether the loan that the purchaser is approved for allows for the purchase of properties that have a value lower than their purchase price, or are “fixer upper” properties. Additionally, if there is no pre-approval or pre-qualification, it could restrict the seller from closing a sale on the property while they wait for a purchaser to get approved financing. Lower interest rates open up the market to more potential buyers. Having a solid understanding of the market and financial proceedings can work to the advantage of all parties involved.
Have experience behind you
If you have someone knowledgeable in the real estate negotiation process on your side, you can tailor a deal that is in your best interest. Being represented is always your best bet. Find someone who has done this before and knows how to negotiate the terms of sale to your advantage.
If you’re looking for representation who will bring their real estate negotiation expertise to the table for you, look to www.chicagorealestatelawfirm.com to fulfill that need. Their experience in negotiating the right terms for you is second to none. Contact them today and work out a real estate transaction that you can be proud of.