Three Tips To Successful Negotiations
Success in real estate, whether it is buying or selling a house, comes down to negotiations and getting the best deal possible. Negotiating is an art, one that requires both experience and knowledge, and one mastered by agents at Search Realty. The catch is that when it comes to the sale of a home, both the buyer and seller, want to feel as though the outcome favors them, or at the least, represents a fair balance of interests.
In most cases, neither party gets ‘everything’ they want, but a good balance is key to a successful negotiation. Search Realty knows how to develop a strong bargaining position, which can help get the most from any real estate transaction. Search Realty lists three tips to help develop a successful negotiation strategy.
1. Understand the market.
As with everything else, the real estate market is constantly changing. Sometimes it’s a ‘buyers’ market, and at other times, it’s a ‘sellers’ market. It’s quite obvious that the home seller or home buyer will want to be in the market when it favors their position.
However, there are times when it is possible to go against the market, and still be successful, and this includes when one has ‘leverage’, more than the market would seem to allow.
A good example would be homes for sale in a desirable neighborhood. Here, the home seller may be able to get a better deal than home sellers located elsewhere. On the other side, for a home buyer who is willing (and able) to quickly close a deal, they gain significant leverage in the eyes of many home sellers. Those who are willing to make it a quick deal by closing faster are utilizing a key bargaining chip, especially if the home seller is in need to sell the home as quick as possible.
Leverage is vital in negotiations. Home values don't always offer the leverage desired and if the home buyer knows that the home owner is desparate to sell (maybe because they lost their job, or found a job in another city and need a quick sale), regardless of the home value, the home buyer has little leeway in the negotiation process. On the other hand, if the home buyer is one of many vying for the home, the home seller then gains the upper hand. Leverage means everything in negotiations and both the home seller and home buyer should be aware of where they stand before stepping in to the bargaining process.
Real estate transactions involve a trade, a house for money, and the house is obviously there, but what about the money?
Home buyers who are ‘pre-qualified’ have at least some idea of their ability to finance a home and can be assured that they are at least likely to qualify for some loan programs. This means that the ‘pre-qualified’ home buyer represents less of a risk to a home seller. This becomes key in negotiations as well. A home seller is less likely to accept an offer from a home buyer who has unknown financial strength.
More buyers mean more demand, thus more leverage for the home seller and this can easily occur when there is a lower interest rate. Alternatively, high rates or even rising rates may drive buyers from the marketplace—and that's not good for anyone.