How to be steady and serious in negotiations about the cost of real estate?
Purchasing a real estate can be a very difficult and time-consuming process. As you could read in the previous articles, it depends on several factors that include finding an adequate property, completing various administrative procedures and ultimately reaching agreement between the seller and the buyer.
The deal is mostly reached with negotiations of two parties that begin when you as a buyer find a property that matches your preferences, contact its seller, visit the real estate and ask the most important question: "What is the price?".
In most cases the price at which the seller is willing to sell this property does not match the price you are willing to pay for it. As two opposite parties, each with different interests, you need to find a price that will be satisfactory for both the buyer and the seller.
Whether you enter the bargaining process yourself or u are using services of a licensed real estate agency, you will certainly encounter various obstacles and it is important that you approach this process seriously and with respect to the opposite side. For successful negotiating process you can follow the tips below.
Determine your budget
In the beginning it is necessary to decide how much money you are willing to allocate for real estate purchase. No one has an unlimited budget that can be constantly altered and adapted to the situation. If you do not specify your budget, you will spend a lot of time considering the properties that you are unable to buy. You cannot expect the seller to drastically reduce the price so you can ultimately pay the amount he asks for.
When defining a budget, it is important to set the upper limit, or the highest price you are willing to pay. All the properties that are sold at a much higher price than the one you are willing to pay you should not consider. You need to consider real estate within your budget.
When looking at real estate you need to adjust your expectations. Certainly, it will not happen that a property that has features typical of a property that is offered at a price higher than your budget also have these features. If you consider real estate higher than your budget, you will be disappointed with what you can afford and perhaps even give up buying. Therefore, it is very important to start the real estate search process by looking for properties whose prices fit into your budget.
Determine the real value of the property
When you find the right property to ensure that the price at which it is being sold is actually the price that is real, it is necessary to determine the real value of the property. You can do this by investigating the prices on the real estate market for such a property. It is important to determine whether the price at which it is offered is below or above its real value. If the sales price is considerably higher than its real value, the seller is too ambitious, and it will be difficult for him to find a buyer who is willing to pay that price. In that case, you have more space to lower the price.
Otherwise, when a seller determines the price drastically lower than its real value, it may indicate that the seller is unaware of its real value, or ownership or technical documentation are not proper, or the property has a burden of mortgage.
In determining the real value of a real estate, the real estate agencies can help you, as they have a large database of real estate market prices and are involved in evaluating their value on a daily basis. As intermediaries, they will explore and find properties that match your preferences and are within your budget. More about how real estate agencies can help you in determining the real value of your potential future home or apartment you can read here.
Never point out that you are looking for a seller in a difficult situation
Some believe that they will find a real estate faster if they claim to seek a seller who wants to sell the property as soon as possible, who is in a difficult situation or who has a mortgage. People involved in the sale will experience your attitude morally sensitive and will look at you without affection. They will try to complicate the purchase process because they will feel that you are attacking and underestimating them somehow.
Therefore, it is highly recommended that you do not emphasize this type of information but focus on the properties of the real estate itself (location, size, layout of the premises, construction year and property arrangement).
Keep in mind the expectations and goals of the seller
You are not just setting up your budget and expectations as a buyer. The seller also has a plan to sell the property in a way that meets his wishes and needs. He will never set the lowest price of the property but the much higher, often the highest price at which he wants to sell it. In this way he leaves space for maneuver to lower the price to the one that could be suitable to the customer. He also wants to find the price with which both sides would be satisfied. You must also bear in mind that the seller also set his lower limit, i.e. the lowest price at which he is willing to sell the property. Below this price seller will surely not go and will search another buyer.
As a buyer during negotiation, you must be aware of the seller's position and conduct negotiations in a way that does not harm his interests. Although your interests are contrary, this does not mean that you do not have to respect them. Nobody wants to be underestimated and manipulated by anyone. If the price you are willing to pay for the property is far away from the price it requires the seller it is better to give up of buying this property. Most likely both you will never find a price that could satisfy both parties and you will spend your time and energy in negotiation in vain.
It is already a better situation when this price is "not so far away" from the seller's price. Then, there is already space for maneuver and a better climate for negotiations. You can hire an intermediary to examine how much can be achieved in price negotiations. The most ideal mediators are real estate agencies because they employ professionals with years of experience in conducting negotiations in the process of buying real estate. Their staff will be able to find the right way to examine how successful negotiations can be without the seller feeling to be attacked or underestimated. The mediator will examine the terrain and give you price information and you will be able to decide whether to continue with further negotiations or not.
If you have come closer to your price (which is a common case) you can try to negotiate through a broker, the price near the price you are willing to pay. Otherwise, if you are still relatively far from that price you can try to arrange a meeting with the seller. At the meeting, you can approach the standpoints through a possible compromise on the terms and conditions of payment, conversion and similar.
Distinguish "field investigation" and negotiation
The terms field investigations and negotiations should not be mixed. When performing field investigation, you are investigating how much the seller is willing to meet your expectations, or how willing he is to lower the price. With negotiations you are trying to reach the price you want in a way that in return you offer the seller something that will satisfy him.
It is important that you are serious about negotiations. If you are serious, you will often achieve better conditions than the ones you will get using long-term field investigation. In addition to seriousness, it is also important to show interest and good will to compromise.
Avoid non-binding offers
It's not okay if you're offering non-binding offers. No one likes the negligence and wants to trust the person he negotiates with. Any bid being offered should be serious and should be given if you can give what you offer. Otherwise, non-mandatory offers are exceptionally incorrect, and the seller can give up the buying process and find another potential buyer.
In that case you will lose the opportunity to buy the property you want so much, and you will have to go through the process of finding a new property and start negotiations with a new, unknown seller. Offer should only be provided if you are fully determined and ready to fulfill the conditions you offer.
As already pointed out, the negotiation process can be difficult and time-consuming. If the sellers' and the customer's interest are already significantly different at the start of the negotiation process, the negotiation process can be prolonged and take up much of your time, energy, and nerves. You must be patient and never run “in front of the rude”.
Any bid you give to the seller must be made after you have considered what you will offer him. Because of the quick decisions you can repent, harm yourself, but also the seller. If this real estate is the one from your dreams you certainly do not want to miss the opportunity to make them true. In negotiations, patience is as important as respecting the other side. They move in the same direction and you do not want the seller to feel threatened in the negotiation process.
Following these tips will surely make your negotiation process faster and easier. Negotiations conducted when buying real estate are not the same as those that run on the market place. Since there is often a life investment and requires large amounts of money, bad purchases can have a significant impact on the financial situation of the buyer. It is precisely because of the importance of buying that it is necessary to find a way to be steady and serious when negotiating the real estate purchase price.
Also, mutual respect of the buyer and seller is crucial in negotiating the purchase price. The negotiation process itself needs to be approached seriously and with patience and if it is necessary seek professional assistance. Real estate agencies are always at your disposal to help you to decide on buying, negotiating, and closing the process by signing a sales contract.