6 Simple Steps to Effective Negotiating
Negotiating property is not a single skill but an entire arsenal comprising of research, strategy, psychology and when the occasion calls for it, plain instinct. Each situation is unique and is composed of several factors including people, which lends a certain amount of unpredictability to every instance. Knowing the foundation of what makes a successful negotiation allows you to steer through unexpected occurrences, to get the best deal for you.
1. Know the market.
The knowledge required to be skilled at negotiations is vast, much more than simply knowing what property you’re looking to buy. Get to know the area the way locals do. What makes the locals stay? What are the places of interest? What do the residents have in common? Are they families or single professionals? Do they love active lifestyles or prefer the quiet and serenity? This will allow you to judge whether the property is a good match for you and if the area is suitable.
If the property is suitable, compare its worth with other similar properties for sale and those already sold. Take note of the property’s features and of its location and compare it with properties that are alike. Better still, consult a professional to give an accurate evaluation of the property’s worth and more details about the local property market.
2. Know the property.
Don’t begin any form of negotiation without having the complete facts on the property you’re considering. Aside from researching its value, always review the contract to ensure future legal problems are avoided. A building inspection is also beneficial as there may be problems you might not be qualified to notice. Structural issues are good examples of problems literally hidden below the surface such as weak foundations, termites or water damage.
Ask to see written reports and other documents of previous repairs and renovations done on the property. By not conducting a thorough evaluation, this opens up a high level of risk which can lead to drastic financial implications and other inconveniences as problems arise at a later date.
3. Know the vendor.
As mentioned earlier, dealing with people of varying traits is often what causes unpredictable events and changes to pre-determined plans. What’s the vendor like and does this person require any additional considerations before they relinquishing their real estate? Is there a company managing the property and what are their rules for tenants? What services are provided and the corresponding fees?
4. Set your price.
Armed with the right information, you now have an idea of the value of the property, so set your limits. Decide how much you are willing to pay. This will keep you from giving into a price beyond the budget when the negotiation increases emotional intensity. Remember it’s about making smart decisions based on evidence.
When you’re at auctions, understand it’s the role of auctioneers to drive prices up for properties beyond what they’re worth. This occurs for several reasons from pride in beating other buyers to becoming too emotional at auction.
5. Start negotiating and listen carefully.
If negotiation a private sale, don’t allow the vendor or other buyers to take the lead in the negotiations. Set the tone. It places you in a position of control while creating the impression of expertise. Direct the discussion to get an overall favourable value which might not always mean the price. Consider the conditions and other terms required as well as other benefits you want. You can even specify these and not just your buying price.
Keep in mind the things that are important to you, beyond the final price. For example, a shorter settlement might suit you better despite paying a higher price due to your particular circumstance.
6. Closing the deal.
Remember that even when the negotiation goes smoothly with both parties getting the value they want, closing the deal may still be postponed for unforeseen reasons. Avoid taking things personally, maintain a calm mind and decide objectively. Never be too eager, much less desperate, to get a property. There are always other properties and other vendors. The real estate market is robust with more investors and buyers as well as more properties coming onto the market.. When all else fails, follow your instinct but not emotion.
Negotiation is complex and difficult to execute without adequate knowledge, skills and experience. It’s always best to enlist the help of a professional team. For more details, contact our team of buyer’s agents in Melbourne. We’ll provide the assistance you need.