How to Negotiate Your Next Real Estate Transaction
We are currently involved in two real estate transactions as sellers. One
is a small property big enough for a gas station and a tire store. We offered
the small property for $200,000 and found a buyer immediately. He agreed to our
price for cash. We closed the following week. We had to learn how to negotiate your
next real estate transaction in real-time.
We asked for $1.000.000 for the larger piece of property. The interested buyer
submitted his opening bid at $650,000, we countered with $850,000, and both
parties settled at $750,000. We also agreed to close at the end of 30 days.
When the buyer couldn’t meet the closing date, we asked for a penalty payment
and gave him another 30 days to close.
How to Negotiate Your Next Real Estate
Price – Everything Starts with
- If you are
planning to come in well below the asking price, you should prepare yourself
for a counteroffer.
- Understand the
seller wants the highest price, and the buyer wants the least amount to pay
— usually, it ends up somewhere in the middle.”
- You have to know your top bid before entering
into discussions. Knowing what you are willing to spend before negotiations
means you are starting from a place of confidence. It will help with knowing
when to walk away and when to counter.
- Be prepared to walk away from the
table when the deal is not right for you. Merely stating what is not right for you is
not good enough. Instead, write it down and share it with trusted friends and
family; that way, you’ll be embarrassed if you give in to the emotions of the
negotiation and stray from your bottom line
- You are not trying to make deals. Successful
negotiation results in favorable deals, not just deals for the sake of finding
2. Meet a Seller in Person
You have an advantage over the anonymous
offers that come in. People want to
do business with those they like and trust. This is especially true when it
comes to selling a home because it could be an emotional process for sellers.
When you meet face to face or online with various
technologies, such as WhatsApp or Skype, you can see their face and gauge their
reactions to your offer.
3. Make a Cash Offer When
Cash is, and forever will
be, king because
sellers want assurance that a deal will settle. One way of giving them confidence is by making a cash offer. A cash offer guarantees a short settlement
process and avoids the long and tedious financing process.
Sellers are more likely to choose a cash offer that’s lower
than a financed offer because they have confidence in the deal closing.
4. The Last Hurdle is Formalizing the Agreement
To formalize an agreement, there
must exist four essential elements: (1) definite terms; (2) an offer; (3) an
acceptance; and (4) consideration, which means that each negotiating party is
giving the other something of value to induce the agreement. The consideration
element can be satisfied simply through a signature, making it a binding
agreement. Be careful before signing anything.
Properties, Inc. is
here to help homeowners out of any distressed situation.
investors, we are in business to make a modest profit on any deal. However, we
can help homeowners out of just about any situation, no matter what!
There are no fees, upfront costs, commissions, or anything else.
We offer the simple truth about your home and how we can help you sell it
us a ring. We would love to help you understand the process and to answer all
of your questions. You can reach us at 402 999.0577.