Did you know it’s reasonable to ask as much as 20% below the sales price of a home? It's surprising but true, as highlighted by RocketMortgage. Entering the world of real estate negotiations can seem daunting, but with the right strategies, you can make sure you get the best deal possible. Read on for expert tips on real estate negotiation that will set you up for success.
Quick Insights on Real Estate Negotiation
- According to the National Association of Realtors, 12% of prospective home buyers greatly desired their real estate agents to assist in price discussions.
- A total of 44% of all buyers expressed that their real estate agents facilitated more advantageous sales contract conditions and expanded their familiarity with potential areas.
- In recent research, 95% of home sellers indicated that potential buyers sought a house inspection.
- Following inspection outcomes, 67% of sellers found themselves in discussions with potential buyers concerning repair solutions.
Tips for successful negotiation in real estate
Let the other party reveal first
Always allow the other party to disclose their cards before you. This strategy grants you the upper hand in negotiations and gives you a competitive advantage as you'll get an idea of what the other party is thinking.
Consider property inclusions
While the sales price is paramount, sometimes the items included in the real estate deal, such as appliances or furniture, can significantly influence the total sale price. Inclusions can be a strategic point of negotiation.
Choose words that affirm
The language you use can determine the course of the negotiation process. By using affirming and positive language, you create an atmosphere of mutual respect and understanding, making it easier to find a win-win situation.
Your physical demeanor communicates
The power of body language cannot be underestimated. Your facial expressions and overall body language can set the tone of the discussion. It’s essential to remain open and approachable, as these non-verbal cues can significantly influence the real estate negotiation.
Base your offers around the market price
Beginning your negotiations close to the home's market value is crucial. This ensures that you're making a fair offer while also giving room for back-and-forth without deviating too far from a fair price.
Gather all possible information
Before sitting at the negotiation table, research everything related to the property. This includes the listing price, local market trends, comparable sales, and any other pertinent information. A well-informed buyer or seller always has an edge.
Maintain a positive mindset and manage your emotions
Real estate negotiations can be an emotional process. However, keeping a check on emotions and staying positive can lead to a more fruitful negotiation. Emotional investment can cloud decisive financial decisions.
Opt for face-to-face or phone discussions
In an age dominated by emails and messages, the importance of personal interaction can’t be stressed enough. Speaking in person or over the phone can facilitate a more genuine connection and often results in a better deal.
Always have an alternate plan
In any real estate negotiation, it's wise to have a backup plan. This means understanding that there might be multiple offers on a property or that a seller refuses your initial proposal. Being prepared for various scenarios ensures you stay flexible and responsive.
Recognize the moments to decline
Sometimes, the best negotiation strategy is knowing when to walk away. Not every real estate deal will align with your needs or financial constraints, and it's essential to recognize a bad deal and be willing to say "no."
What can be negotiated in a property transaction?
The home price
This is the most obvious aspect of a property transaction. Both the buyer and seller are looking to get the best price, be it the purchase price or the sales price.
Costs associated with closing
Closing costs, such as appraisal fees and other related expenses, are often up for negotiation. A seller might agree to cover closing costs to ensure a smooth transaction.
Finalizing the transaction date
Depending on both parties’ needs, the closing date can sometimes be moved. It's essential to communicate any specific requirements or constraints in this regard.
Repairs on the property
Buyers may request certain repairs based on the inspection report before finalizing the deal. Sellers can agree to make these repairs or potentially adjust the home price.
Appliances that come with the property
Appliances, often a part of the home buying process, can be included or excluded, depending on negotiation outcomes.
Like appliances, furniture can sometimes be part of the negotiation. Especially for novice real estate investors or those buying an investment property, including furniture can be a deciding factor.
Entering the world of real estate, armed with these negotiation strategies from a real estate negotiation expert, will undoubtedly give you the confidence to navigate the market. With ever-fluctuating market dynamics, especially in hot markets, your negotiation skills can be the defining factor between a dream home and a missed opportunity. But it's not just about the strategies. The right mindset and thorough preparation can propel you towards a successful negotiation.
For novice real estate investors or even seasoned home buyers, it's essential to understand that real estate deals are a combination of research, strategy, and instinct. And sometimes, even when you've given it your best, the outcome might not be in your favor. That's why it's crucial to have a backup plan and avoid getting overly attached to a single property or deal.
It's also worth noting that the relationship between the buyer's agent and the seller's agent can significantly influence the negotiation process. Building strong professional relationships in the real estate world may tip the scales in your favor.
Talk with a team you trust
Remember, every negotiation is unique, and having a trusted local real estate agent like Christy Crouch or a certified negotiation expert by your side can make all the difference. Trust in the process, be patient and believe in your negotiation skills. Here's to mastering the art of real estate negotiations and securing the best deal. Happy negotiating!
About The Crouch Team
Christy Crouch, a seasoned real estate expert since 1991, has built a diverse career deeply rooted in faith, continuous learning, and a commitment to the needs of her clients. Whatever your real estate needs, Christy and her team offer expert guidance from start to finish. If you're looking to buy or sell a home or have any questions about the Virginia real estate market, contact The Crouch Team today.
*Header photo courtesy of Shutterstock