A successful negotiation is more than using the art of persuasion and pizzazz to convince the other party to agree to your terms. Negotiating is not just about having a special way of communication, whether you’re a get-go kind of marketer or a diplomatic salesperson. Rather, the meat of negotiations in buying a home is all about using facts as a basis for your strategy. These facts could be in the form of the market situation, requirements of the home seller, or the details of the property.
One of the best ways to ensure that you don’t miss out on any details during the home purchasing process is by hiring a real estate agent. These industry professionals have sufficient knowledge about the real estate market trends and movements, as well as connections with fellow agents and value-adding third-party experts. In short, negotiating a home purchase will be fast when you have an agent with you.
However, don’t get the idea that you cannot negotiate on your own. Be assured that many home buyers have opted not to hire an agent to do the negotiations. But remember, without a real estate agent by your side, you need to have to do the nitty-gritty details – conduct a comprehensive research on the current market situation, the home that caught your eye, and details about the seller. You should also equip yourself with a good negotiating style and strategy so that you can get the home that you want.
Make sure that you do the following basic necessities before attempting to negotiate for a home purchase:
- Study the property and the buying process exhaustively.
- Ask questions. Don’t hesitate to be inquisitive so that you won’t regret later.
- Talk to someone – not necessarily an agent – about your budget, as well as your reasons for buying. It’s good to have someone bounce off ideas with.
- If you find yourself unable to do any of numbers 1 to 3, it might be a better idea to hire an agent. Make sure that you feel comfortable with the agent that you’re going to choose.
The most important detail to consider in a negotiation strategy is the condition of the market where the property is situated. Analyze whether the house is inside a seller’s market, a buyer’s market, or somewhere in between. Be aware that there are also markets that welcome bidders. Here are some effective negotiation strategies depending on the type of market condition:
This condition happens when there are more homes available for purchase than the number of people who are interested to buy. This is a good scenario for buyers because they have many options to choose from, and the competition will likely drive home sellers to bring down their selling prices. In short, if you are the buyer, you have the upper hand when it comes to negotiations.
If the home is only one of a handful of properties in the area and many interested buyers are flocking in, that’s a seller’s market. Unfortunately, this isn’t going to be an easy situation for buyers. Sellers have the opportunity to be picky in this situation, so your negotiation strategy should be direct and no-nonsense. Although some agents can make a cheaper offer, be mindful that this probably won’t last for long and they’ll gladly move to the next prospect.
A healthy mix of buyers and sellers exist in this kind of market. This is a situation where neither the buyer nor the seller can claim ultimate domination of the negotiation process, so you should expect a longer negotiating time that involves several counter-offers on both sides. Most transactions in this kind of market end up with a fair split on home price differences, as well as purchase terms and even personal property.
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