You’ve had a good walk through of the property; you like it and have an offer rolling about in your mind. Honestly, it would be great if it just ended there, wouldn’t it? But no, before you can legally claim the property as yours, you’ll have to run the figure by the seller.
Unfortunately, after they run through their numbers, their asking price is more than what you want to pay for it. So what should you do when you meet this kind of unfavorable scenario? Don’t worry, everything isn’t lost yet. Here is a list of some of the steps that need to be taken in order to work out a brilliant steal of a deal.
The Seller’s Inspiration
It is important to keep in mind at all times the level of motivation the seller you are dealing with has. For example, are they willing to wait for a few more months in order to score top dollar? Or are they more than eager to simply get the property off their hands ASAP? If they are the former, then it’s really just bad luck for the buyer, as it can be extremely hard to get them to consider your figure. No matter how much you may want the deal, please do not overextend yourself and overpay for the property. This is a common mistake I see from fellow investors who adjust their numbers to justify the higher purchase price.
However, if the seller needs property gone ASAP, then the odds are in your favor! If they are desperately seeking immediate cash or perhaps they are moving out of state and simply want to sell a property quickly, then trust me, their level of motivation to sell will be very different.
Understanding Their Desires
In the tricky game of negotiating, it is important that you be savvy. Figure out what the seller wants, and this can be of a great benefit to you (and them)! If you know the kind of price that they are seeking and the situation that they are in (i.e. they need cash ASAP), you can offer a price that will work both in your favor and theirs, too. After all, if the seller can close the deal in the shortest amount of time with a nice wad of cash in hand, you just might be able to entice them to sell it at a lower price.
Sure, the figure that you are offering to the seller is pretty low (actually, more like really low), but don’t go all misty about it. Be BOLD.
Trust me, from my experience, I have noticed that if you are straightforward about your intentions from the very beginning, then everything tends to fall into place. This is simple psychology. Everybody enjoys collaborating with others who are honest, direct and get the job done. It makes life so much easier for them, and if you are dealing in-person with the sellers, be aware that their main wish is to sell the property as cleanly and swiftly as they can. Hint: Using a title company will help you to achieve this.
I would highly recommend the book Trump-Style Negotiation as a read. Negotiating is a skill that can be learned and perfected.
Investors: What tips do you live by when negotiating real estate deals?
Let me know with a comment!