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Nov 22 '09, 05:50 PMI always try to mentally prepare buyers about two things that they shouldn't forget when negotiating a deal: the first is that the negotiation can happen in more than two rounds so they shouldn't expect a successful deal from the beginning and the second is that a deal has to be a win-win situation where neither the buyer, nor the seller is the looser. Besides that there are also some very basic rules that I'm always keen on.
Manage your behavior: This might seem just common sense but I've not seen it many times happen. Usually there will always be a bugging issue. So, while in a discussion with the sellers focus on the problem, don't let yourself led astray by petty issues. If there is any difference of opinion, come up with a creative solution, which may be beneficial for the other party as well.
Prepare in advance: Always remember that the more you know about the seller, the easier it will be for you to negotiate the offer. Some minor issues, which if you are aware of, can make or break the chances of you acquiring the deal. To be more specific, gather as much information as you can on mortgage and financing, home inspection, their hired agent and the closing date, try to find out which are the pressures, the weak points. Research well on the location of the house and the seller's circumstances before making your initial offer.
Plan your move considering the property price: When you judge that the property has a higher asking price in a down market, begin low with what you think is an appropriate price and move up step by step. If you think the seller has quoted an appropriate price then suggest a price, which is close to the quoted price. When it is the seller's market, quote the highest price that you can give but make sure that the deal is affordable.
Provide value added: Draw the lines on the bargaining price and structure the deal in a reasonable way. Settle down for terms other than negotiation, such as payment for the repairs to offer a discounted price. Clearly define payment terms for title insurance, pest inspection, recording fees, transfer fees, survey points, bank attorney fees, title search, closing fees, broker's commission and similar expenses.
The rule on the market appears to be offering 80 percent of the listing price. And generally that could be the start of the negotiation. But it's not the case every time and you might look like you're not determined enough to get a deal. Affix your priorities and adhere to them.
Best,
Charles
