WorldExecutivesDigest.com | Negotiation Tips When Buying Your First Real Estate Property | Buying your first real estate property is an important step for anyone. However, the real estate market can be a complex scene from new buyers to maneuver, with many buyers opting to seek help from real estate firms such as Pumped On Property Sunshine Coast. In this sector, buyers need to negotiate widely if they are to get value for their money. But negotiation skills are not natural for every real estate property buyer. Rather, buyers have to learn and practice them in order to improve their chances of getting better deals. If you are looking to buy your first real estate property, here are 7 negotiation tips you could use to get a good price:
- Be clear on the kind of property you want
To succeed with property negotiation, you need to be clear on what exactly you are looking for. For instance, do you want a single-family home, a condo or multi-family home? Where should the property be located – should it be in a growing neighborhood or in a busy urban area? Also, consider the state that you want the property to be in – do you want it to be ready to move-in or are you ready to take up a property that will need renovations? Being clear on these things will enable you to locate an ideal property fast and give you negotiation power so you get what you want.
- Conduct some basic research
Prior to negotiating for a property, take time to carry out some basic market research so you know what the prevailing prices are in areas close to the property. You can use the internet in your research but bear in mind that often, the prices that appear on property websites tend to be slightly higher than actual rates. This is because such prices are posted by either brokers or builder. When negotiating the price, do not reveal the source of your information – just point out an example or two.
- Have a budget in mind
Know how much you want to spend on the real estate property from the onset. This will enable you to negotiate the price because the seller will know how much you can afford to pay for the property. In addition to the purchase price, have a budget that also includes other costs including renovations, legal fees, taxes, realty commissions, environmental and structural assessments, and contingencies. Also, pay attention to the financing options that are available to you. If you plan on getting a mortgage, having a pre-approval can give you an edge during negotiations.
- Understand the dynamics of the property market
Find out how the property market looks like before buying a real estate. To effectively negotiate for a good deal, you need to determine whether the market is leaning to sellers or towards buyers. When the real estate market is leaning towards the buyer, there are more sellers compared to buyers while in a seller’s market, there are more buyers but few sellers. When the market is leaning towards buyers, you are likely to get good property rates – but when it is a seller’s market, the possibility of negotiating a good deal is almost negligible.
- Evaluate the motive of the seller
A critical component of real estate negotiation is getting an understanding of why the seller is disposing of the property. To achieve this, consider asking questions that enable you to understand whether the property is a home or a real estate investment. This is because, for sentimental reasons, homeowners tend to be attached to property while investors are more business-minded. At the same time, find out the duration that the property has been in the market. In situations where the property has stayed in the market for a long period, the seller may be desperate to get a buyer and might be willing to reduce the price. On the other hand, the seller may not be willing to reduce the price where the property just got listed on the market.
- Consider Financier and Broker Influence
When negotiating for your first real estate property, consider the presence of brokers and financiers in the property market as this influence the prices, pushing them upwards. Rather than trying to negotiate property prices in a market that is flooded by financiers or brokers, opt to purchase property in places where the market has few of them. This will expand your negotiation scope and increase your chances of getting favorable prices on your first real estate property.
- Watch out for artificial price hikes
In marketing, the price of a property is not determined by how much the seller is willing to sell, but by the price that the buyer is willing to pay. There are times that sellers form cartels and collude to hike the price of properties above the market rate. In the event that this happens, it lowers the scope of negotiating real estate property deals. It is a trap that gets prospective buyers to believe that the price that sellers quote is the market rate. The existence of seller cartels in the property market reduces the power of buyers to negotiate real estate property deals. Watch out for these tactics; conduct a basic survey to know the market rate in the area where you want to buy a property. The easiest way to do this is to compare the cost of properties that have similar amenities or facilities.