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Negotiating tips
Morris Digital Works Wire Service
Negotiating the price for your new home doesn't have to be a stressful
experience. Anyone can be a successful negotiator if a few simple
things are kept in mind.
First, remember, an informed buyer is a confident one. Negotiations
may be like snowflakes, no two are the same, but one thing that's
helpful in every negotiation is information. Below is a list of questions
that will allow you to become well informed heading into negotiations.
1. How long has the property been on the market?
Usually, the longer the property has been on the market, the more
likely the seller will be to negotiate.
2. Has the price been reduced during the listing period?
If there have been any reductions, especially large ones, in relation
to the overall price, then the seller will again be more apt to negotiate.
3. Have there been any other offers on the property?
It's good to know what offers are being considered and what offers
have been turned down and why.
4. Why is the seller selling?
It is always good to know a person's motivation when negotiating.
This will help you in choosing what offer to make.
5. What all are you buying?
Is the seller leaving anything else behind? Furniture or equipment,
washer, dryer, etc. This should all be taken into consideration when
making an offer.
6. What is the price range of properties that have been sold in
the area?
This will give you a good idea of what the market is like in the area.
7. How long do properties stay on the market in the area?
This average will let you know how heavy the competition is you may
be facing.
8. What is the list to sale price ratio in this area?
A good way to find out the sellers' past willingness to negotiate
and how much or how little they may be willing to bend.
9. What is the average price per square foot of recent sales in
the area?
Now you will know how the house stacks up against others in the area,
without worrying about size. It puts all houses on the same level.
10. What other factors may affect the property value of the house
or neighborhood?
Crime, flood planes, natural disasters, termites, in other words find
out the history of the house and area.
The only final information you should get now is a comparative market
analysis (CMA). You can request your relator to write one up for any
of the houses you wish to make an offer on. A CMA is what a seller
uses to set the asking price. It may show you that the price they
are asking is a bargain or extremely inflated.
Now that you are armed with knowledge, negotiations will be much easier.
Now you know what a good price for the house actually is.
When you get into the actual negotiations, don't be in a hurry. Remember
to be relaxed and patient. You have all the information you need in
front of you, don't hesitate to take time to look over it again. As
the buyer, the ball is in your court. You can always raise your offer
if you need to, but you can't lower it.
Remain aloof and don't act as if you've fallen in love with the house,
make them convince you that the house is the one for you. Don't let
them rush you into a buy. If they say there is another buyer seriously
interested, don't become over anxious, they may be bluffing.
Another ploy often used in negotiations is the 'good cop/bad cop'
strategy. This takes place when one person acts as the hard liner
who won't budge only to be convinced to come down a bit by the 'good
cop.' The price they move down to, no matter how much the 'bad cop'
complains, still may not be a reasonable one.
Don't get into a bidding war. If you are told that you are in competition
with another buyer, let them make the first move, and avoid continuous
bidding. This will just drive the price out of your range. Drop out
of the bidding and see what the sellers' reaction is.
The key to all negotiations is to know your limits. If you've set
a cap on spending, stick to it, don't let someone talk you into something
you can't afford or aren't willing to pay.
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