12 Real Estate Negotiation Tips
In real estate negotiations it is typically the agent that handles the face to face negotiation. It is however useful as the client to understand some different negotiation techniques so that you can discuss, in an informed manner, the approach your agent takes. Outlined below are 12 different real estate negotiation techniques:
1. Listen to your real estate agent.
In the past six months your agent has probably done more real estate deals than you will in your life time. Listen to their advice and leverage their past experiences.
2. Be ready to give and take.
You have to be willing to give and take in any negotiation. Before your negotiation list out the items/terms you are flexible on and those that you are not. Be prepared to give in on your flexible items if it means getting the items/terms that are most important to you.
3. Be realistic.
During negotiations be realistic, keep your end goal in mind. You may have to pay a little more to get the house you want. But If you consider it realistically, how will an extra few thousand impact your monthly mortgage payment? Most likely the affect will be negligible.
4. Leverage your real estate agent.
Your agent will most likely be objective through this process, when your emotions get high look to your agent for their advice.
5. Do not low ball.
Low balling leads to either an immediate, equally unrealistic sign back or they will just ignore it. It will also most likely insult the vendor and set the negotiation off on a bad note. There is one exception to this rule, and that is if the property is legitimately overpriced.
6. Find out why they are selling.
The more information you have the better the situation you will be in.
7. When should you send in your offer?
As soon as you have made your decision get the offer in or it might be too late
8. How short should the irrevocable period be?
The shorter the irrevocable period the better, as long as it does not put undue pressure on the vendor. The shorter the period the less time the vendor’s agent has to find other last minute offers.
9. Do your research and be reasonable.
Calculate the value of the property by reviewing other comparable sales. Make a fair offer, and be realistic. This will put you in a much stronger negotiation position. Be prepared to walk rather than let your emotions take over your reason.
10. Walk a mile in the Vendors shoes.
Review the offer as if you are the vendor and consider how you would react to the offer.
11. Get the vendor to respond in writing.
Oral commitments are not recognized as binding by the law in Ontario. They must be in writing.
12. Has the house been sitting on the market?
The longer the house has been on the market the stronger your negotiation position. But if the right house comes onto the market do not wait to submit an offer just because you may have a stronger position if you wait a few weeks. It most likely will be too late.
