Best ways to negotiate asking price???
Investor · NJ · Member since 2023 · 20 posts · 8 votes
Hey Everyone,
I recently got some advice where they said to allow your realtor to handle negotiations for the asking price of a property. However, I do not have a specific realtor in my phonebook. With that being said, I usually see a property listing and try to contact the realtor that listed it, but I don't want to assume every realtor is willing and able to negotiate the asking price of a property.
What are some ways to negotiate the asking price of a property down when either speaking to the seller or the realtor?
If you are a cash buyer there is typically more power you will have in the negotiations.
Also, once you get your offer accepted and get an Inspection and Appraisal done, you can negotiate terms based off the two. Lower price in the case of a lower appraisal or work to be done by the sellers in the case of inspection issues.
Aside from that, making low-ball offers to the sellers will sometimes stick. You just have to do it enough times and success will eventually happen.
If you are calling the listing agents to try and have them represent you remember 2 things, 1) not every state allows for dual agency (where one agent represents both the buyer and seller) and 2) even if it does, why would that agent, who already has a relationship with the seller and a fiduciary duty to get the seller the best deal they can, turn around and help you get the best price you can? Dual agency rarely works in everyone's favor. You may be better off interviewing some buyer's agents who can represent you. Talk with other investors at RE meetups to see who they use/would refer or how they are getting deals.
For strategy purposes, assess what your market looks like and find a niche. If you are looking to get properties for under the asking price, then don't shoot for the super cute house that has a line out the door for the open house the first week it is on the market. That type of home will be more likely to get multiple offers. Try instead to find properties that work for you but are getting overlooked by other people. Could be homes that need work, maybe have a funky layout but is a layout that is great for splitting into a two unit property, etc. It also usually helps to have a reason why you are offering a low offer that you can articulate to the seller/listing agent beyond just "I want it for less than what you are asking". What I mean by that is you can use the condition of the home, the layout, what other homes in the area have sold for and why this home is the same (if it sold lower) or different (if it sold higher) or whatever other information you have at your disposal to show why your price, even though lower than what they are expecting/asking, is a good deal for them.
Read books like Never Split the Difference to help you further with strategy. It is not great for multiple offer situations but it is a good read for one on one negotiations.
Best of luck!
If you are calling the listing agents to try and have them represent you remember 2 things, 1) not every state allows for dual agency (where one agent represents both the buyer and seller) and 2) even if it does, why would that agent, who already has a relationship with the seller and a fiduciary duty to get the seller the best deal they can, turn around and help you get the best price you can? Dual agency rarely works in everyone's favor. You may be better off interviewing some buyer's agents who can represent you. Talk with other investors at RE meetups to see who they use/would refer or how they are getting deals.
For strategy purposes, assess what your market looks like and find a niche. If you are looking to get properties for under the asking price, then don't shoot for the super cute house that has a line out the door for the open house the first week it is on the market. That type of home will be more likely to get multiple offers. Try instead to find properties that work for you but are getting overlooked by other people. Could be homes that need work, maybe have a funky layout but is a layout that is great for splitting into a two unit property, etc. It also usually helps to have a reason why you are offering a low offer that you can articulate to the seller/listing agent beyond just "I want it for less than what you are asking". What I mean by that is you can use the condition of the home, the layout, what other homes in the area have sold for and why this home is the same (if it sold lower) or different (if it sold higher) or whatever other information you have at your disposal to show why your price, even though lower than what they are expecting/asking, is a good deal for them.
Read books like Never Split the Difference to help you further with strategy. It is not great for multiple offer situations but it is a good read for one on one negotiations.
Best of luck!
GREAT insight, thank you so much for your thoughts!