Negotiating may well be the most critical part of your real estate transaction. Striking an advantageous deal with the seller just about guarantees your profit. Negotiating is both an art and a skill that you'll master with effort and time. The more deals you do, the better your negotiating skills will become.
Here are five tips to get you on your way to more profitable negotiations.
Research and Prepare
You should know as much as possible about the real estate transaction you're about to negotiate. This knowledge comes from researching the neighborhood and knowing how the property compares to others around it. Find out as much as possible about the sellers and their motivations for selling the property.
Listen more than Talk
The best way to learn more about the seller and the property is to listen. Applythe 80/20 rule; listen 80% of the time and talk 20% of the time! Folks will be likely to volunteer information if you give them a chance to talk. If you think you aren't finding out what you need to know THEN ask questions. Understanding the sellers' situation and their possible flexibility will help you negotiate financing options as well as price.
You also need to find out what the seller's motivations are. Why are they selling? What do they want to accomplish from the transaction? Understanding the reasons behind the sale can help you structure a deal that meets their needs and yours.
Always Think Win-Win
The best real estate transactions result from negotiations that provide something to both buyer and seller. There are certain things each wants from the deal. Every transaction has several facets. If you can give the sellers something they want, you will increase your chance of getting something that you want.
If the seller counters your offer with an offer of his own, don't let things spiral out of control. Prepare for counteroffers by starting your negotiations low and have plenty of concession points. Don't focus on price, but use other aspects of the deal in your negotiations. Don't re-negotiate things that have already been decided.
Be Prepared to Leave the Deal
Don't walk away from an attractive real estate purchase without offering your best deal, but know when it's time to walk away. There will always be another property.
As you can see from these tips, negotiating a real estate transaction is more than just two people in a room. Negotiations are won or lost in the preparation. Achieving the outcome you desire depends on your research and mental preparation.
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