Is the idea of having to go back and forth with the seller to negotiate the final sale price of a house stressing you out? Have you never been inclined to negotiation and do you simply not know where to start?
Remember first: the goal of negotiation is to find common ground. No need to leave the knife between your teeth. Leverage these tips to get through this important step:
- Aim for a “win-win” transaction
Approach negotiation with humility, openness, and respect. In order to seal an agreement, everyone has to find something for it. Listen to the seller and try to establish a relationship of trust with him. Do not make the mistake of starting the discussion by offering him $ 75,000 less than he wants. Stay realistic.
2. Know the market before negotiation
Take inventory of homes for sale and those sold in the area you are looking for. Then compare them with each other, focusing on dimensions, inclusions and of course, the asking price. This step will allow you to get an idea of what can be a reasonable price for the house you are looking for. It is also by doing this exercise that you will be able to distinguish a windfall from a property that is overvalued
3. Talk to the owner before making an offer
Take advantage of the visit to exchange with the seller. Ask him if the seller has had many visits if the house has been for sale for a long time if there are any particular reasons for selling, and/or if there is work to be done.
Collect as much information as you can. This will be useful in the future. For example, the negotiation will not proceed in the same way with the seller who has already received two offers to purchase in 24 hours with the one who has been waiting for an offer for two years.
4. Rest negotiation on solid argument
Once you have a better understanding of the market and have visited the house, you should already have some ammo to negotiate. If you cannot agree on the price, explain to the seller why you are making a lower bid than he wants. For example, if the inspection report shows that the windows need to be changed and the roof has to be or is repaired, you may have a valid reason to make an offer to buy less than the asking price. Here are five signs that show you can negotiate a discount on the asking price. If there is no official grid in the field, open your eyes, anticipate and be firm.
a. The property is overpriced compared to the market price
An overpriced property in comparison to the market price will not sell. It’s a sign that you can negotiate. We must conduct the survey, and make several estimates on different sites so as not to focus on a single price. You can also print ads of similar properties to submit to the seller.
b. The property is on sale for more than three months
This is a great bargaining opportunity. If the ad has been online for more than three months, you can still offer a price 10% lower than the one requested but no more at the beginning. Many owners overestimate their property, and some agencies agree to offer them at this rate.
c. The property has defects
If the ad gives you indications of potential housing defects, you can already consider a negotiation. A ground floor or first floor, for example, is likely to be dark. A low-light apartment sees its price fall from 5 to 10%. The price of a dwelling on the upper floor (from the 4th floor) without a lift can be reduced by 5%. That of a home with “work to predict” can also see its price decrease.
d. The housing needs to be renovated
The property you like is nice, but if it requires renovation work, set a numerical goal, and take into account the expenses related to your budget and your financing plan. Bear in mind a floor price in order to be firmer during the negotiation. You can get from 10 to 20% depending on the scope of work.
e. The energy performance of the home is at its lowest
If energy performance diagnosis of the property indicates that the energy performance of the housing is at the lowest, you will be required to make further expenses to resolve energy issues. This criterion must be taken into account in the price of the house because, in case of re-standardization or improvement (heating, hot water, ventilation, lighting, etc.), the cost is always higher than expected. Old housing, built before 1980, is often very energy intensive.
5. Master your emotions
It may be difficult, but even if you fall in love with the house, try not to be too enthusiastic. If you finish visiting the property and beg the seller to sell it to no one but you, it may be difficult to convince the property owner to negotiation on the sales price.
6. Be patient
Not everyone has this luxury, but if you can take your time, you will come out a winner in the negotiation. You will have the chance to see more properties and get a better idea of the market. You can also take your time to conclude the agreement with the seller. If the seller refused your first offer, you could call him/her back a few weeks later and check if the house is still for sale. If so, the house owner might want to reconsider his/her negotiation position .
7. Demonstrate that you are serious
Take a complete tour of the house, ask questions, take notes, talk to the salesperson, and tell him that you intend to buy a house. Act as an expert, and you will gain credibility.
On the contrary, if you lack confidence, you will have a hard time convincing yourself. Finally, remember that you have the right to bargain and that it is part of the normal process of selling a property. So do not be embarrassed to deal with the seller. Applying a few of these tips will allow you to do so with confidence and possibly save a few dollars.