Expert Tips on How To Negotiate A Real Estate Deal
August 9, 2021
“You do not get what you want. You get what you negotiate.” Harvey Mackay
Negotiating real estate deals is a lot more than just simple transactions. It’s a process, where you have to meticulously carve your way out to reach the end goal – closing the deal.
In this post, we will talk about everything that happens between your initial offer and the day of closing, counteroffers, and how to negotiate a real estate deal.
Let us take a look.
Common Types of Real Estate Negotiations
As a buyer, you can put yourself in an advantageous position by gathering as much information as possible about the house you plan to buy and the seller. You can use this information while negotiating real estate deals or when placing a counteroffer, which we will discuss later in this post.
First, let us take a look at the common types of negotiations that you can make while closing a real estate deal:
1. Price Negotiations
The first, most obvious, type of negotiation in a real estate deal is for the price. As a buyer, it is always worth trying to bring the price down by using your negotiation skills. Here are some things that you might want to keep into account when negotiating price:
The condition of the house is the number one factor that comes into play when negotiating real estate deals. Conduct thorough research to look for any possible signs of repair or damage to the property.
An older house could mean unplanned repairs and added expenses in the near future, which you would definitely want to keep into account when buying a house.
The second important factor while negotiating a real estate deal is the appliances in the house. In many instances, the homeowners choose to take the appliances when they move out of the house. This is a common scenario in which you as a buyer have a huge scope of negotiation.
If the seller is taking the appliances along, you can negotiate and bring down the price, since you will have to incur the expenses of adding new appliances to the house.
2. Closing Date Negotiations
It is common for sellers to counter the closing date that you propose. One of the reasons sellers will choose another closing date is that they want to move out quickly. This could be great news for buyers as a seller who is desperate for a fast close will likely be open to negotiating for a lower price.
As a buyer, you need to anticipate all of these situations and be prepared to make a counteroffer.
Counteroffers: the vehicles for real estate negotiation
What is a counteroffer?
Well, you can think of a counteroffer as a rejection of the offer that you made for the property.
A counteroffer can be made by either of the two parties i.e. the buyer and the seller.
Suppose, you made an offer for a price below the list price. The seller can choose to reject it right away, or simply let the offer expire. So, how can you navigate counteroffers to buy the home of your dreams?
Well here’s how:
1. Act fast
It is ideal to respond to the seller’s counter offer within 24 hours of receiving it, especially when you know that multiple offers are being made for the house.
A seller who senses delay in response won’t hesitate to withdraw their counteroffer and look for other buyers who seem more interested.
2. Let go of some of the contingencies
Another great way to turn a counteroffer into a successful deal is by reducing your contingencies.
Think of contingencies as the conditions that must be met for the deal to go through. Things like Home inspection, appraisals, mortgage approval, or existing home sale are some of the common contingencies added in the real estate contract.
You can let go of any one or more of these contingencies to ensure that the deal does not slip through your hands. Set a tolerance limit for the risks that you can take, and then carefully think about the contingencies that you can waive while making the deal.
For instance, waving a termite inspection when you are positive that the risk involved is a lot lower than losing the deal.
3. Raise the offer
The last resort for you as a buyer, in case you don’t want to lose the property at any cost, is to raise the initial offer that you made. However, be certain to keep your budget in mind when raising the price. You would not want to end up overpaying for the property.
This is another reason why initial research becomes so important. By meticulously researching the neighborhood comparables (the houses that are similar in size, condition and age to the house that you are planning to buy), you can easily set an upper limit for your offer and negotiate accordingly.
4. Know when to walk out of the deal
Negotiating can be tough and draining. As a buyer, you must always trust your gut.
When you can see that the seller won’t budge, even when you’ve made your best offer simply walk out of the deal.
It can be quite excruciating to walk out of the deal when you’ve already put so much effort into making things work. But, don’t forget there’s always a better deal waiting for you.
So, just focus and move on until you buy your dream home.
Negotiating a real estate deal is difficult and time-consuming, especially when you are not an expert. Expert negotiators are trained in the nuances of getting the best deal possible no matter what. That is why we always recommend enlisting the help of a real estate agent when buying a house and if you want to work with the best real estate agents, contacting a Negotiator Recognized Partner is an even better idea. NRPs consist of the best real estate agents in the country. By working with an NRP, you are guaranteed to work with a real estate professional who has a vast amount of experience and the skills to get you your dream home at the best price possible
If you are looking to buy a home, and don’t have any idea about navigating through the process, then get in touch with an NRP today!