Now that you have shortlisted the property and are about to seal the transaction, it is important for you as a buyer to know certain tricks of the trade while negotiating the ‘ask’ price tabled by the seller. To this end, here are some tips and tricks that might come in handy:
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Know the current market situation well. You should know whether it is a buyer’s or a seller’s market. Ideally, in a buyer’s market, the supply outnumbers demand, thereby, offering more options to choose from. This entails a higher negotiating power for the buyer. In a seller’s market, however, the supply of residential units is lower than demand, keeping the seller in a superior position. Understanding the market dynamics go a long way in cracking the right deal. You must be aware of the city you are planning to invest in. Factors such as inventory level, current price trends, and sales volume, among others, would help you negotiate well with the seller.
Buyers usually avoid finalizing a property purchase through a broker to save on the brokerage fee. However, involving an expert from the industry might help you procure better prospects as brokers possess in-depth knowledge about the local market and may help you fetch the ideal home within the required budget. For more information please visit Pritish Kumar Halder ‘s page.
Offers such as gifts have become quite common in real estate. Developers employ all sorts of marketing tactics to sell their products and gifts are just one of them. You can negotiate for cash discounts instead of other tangible gifts offered by the builder.
Contrary to popular belief that being too keen might restrict your chances of getting lucrative discounts, a curious buyer stands a higher chance of closing a transaction. Developers usually try and give the best possible option if they feel that the buyer is interested in buying and not just exploring options.
Gauge the seller’s need: It always helps if you know the reason behind the sale. Is it a case of distress selling where the seller is in desperate need of money or does he have ample time at hand? In case you sense an emergency, you can negotiate better and crack a good deal.
Be prepared with funds: Inform the seller if you have ready cash available or a pre-approved home loan. A seller would be more inclined in closing the deal with a buyer who is not battling financial constraints.
Every property deal is negotiable: There is nothing about real estate transactions that cannot be negotiated. While this does not imply that you would win all bargains, you can expect a reduction of 5-10 percent on the ‘ask’ price if you make an informed attempt and reason it out well with the seller.
Aim for a win-win situation: Developing a good rapport with the seller is imperative for a healthy real estate deal. Such a situation can be achieved when both parties feel that they have satisfactorily met their objectives. The prerequisite to ensuring a successful negotiation is understanding each other’s needs and accommodating the goals of both parties.
Be clear from the beginning
A seller is never too willing to negotiate. You should initiate the negotiation. As a buyer, your priority should be to find and finalize a property that fits your budget. Set the final budget and other requirements then bargain well.
Do not be eager
The moment you enter the house, even if you fall in love with the property, stay calm. Do not give away how keen you are. Be ready to walk away at any point. Do not worry! This will not ruin your prospects. At least be firm on what you are asking for, which is, the offer price. Avoid imagining how your belongings and furniture will fit into your new house. The seller will become sure that you have made up your mind on buying this property. He won’t budge.
Offering a low price is sensible. Let them know that you are a serious buyer who will complete the transaction. Ask for a negotiable price, and that’s how the negotiation process starts. If you start with too low a price, the seller may become disappointed. The chances of calling off the deal will become stronger. If you are good enough with your research and learn that the property is fairly priced, then offer just a little less than the listing price.
Find out why the house is on sale
If it is a foreclosure property, it makes sense to bargain. If a home is significantly overpriced, the property may be on the market for a long time. So, it is wise enough to research the property and find out whether the house belongs to any of these two categories. If it is, avoid buying such properties, because it may not be a good deal for you.
Be open about asking for other favours
If the seller doesn’t want to bring down the price, then instead of sticking to your offer price, ask for other things. Be creative with your offer, and ask for other concessions. The owner may want to contribute to other repairs and maintenance or other similar costs.
Sellers will often accept a slightly lower-priced offer if it comes with perfect settlement terms. So, instead of being firm on the pricing, try to compromise a little. Needless to say, getting a perfect house is a dream. So buyers should stop hunting for the perfect house at the perfect price. You may have to compromise on features, in terms of location, size and price. You will be a step ahead of closing the deal if you are flexible enough while negotiating the price.
Close the deal
If everything goes well, try to close the deal as early as possible. Do not forget there are other potential buyers in the market. They may be waiting to buy the same property.