Negotiating The Best Deals
Very rarely will you engage in negotiations and have them go exactly how you planned. If your initial offer is accepted, you are either overpaying for the property or there may be more than meets the eye. In most cases, there is usually a series of counters, rebuttals and back and forth that is expected in every transaction. How you handle these exchanges will often define how many offers are accepted and if you comfortable with the outcomes. If you push too hard, you will end up losing the deal. If you don’t push enough, you may leave something the table.
The most important thing to remember when you are making an offer and negotiating is that you are trying to acquire a property, not trying to get the best deal. Of course, getting a good deal is a welcome benefit, but that is not your main goal. If you constantly submit low-ball offers and aren’t willing to compromise to get the deal done, your chances of getting the offer accepted are very slim, especially if there are any other offers. You need to identify the strengths of your offer and play to them.
If you keep the big picture in mind and what your seller’s goals are, you will get more deals. Too many times we only think about what we want and how we can get it. If we change our thinking over to the seller we will have more success. Ideally, you will be able to identify what they want out of the transaction and play to it. If that isn’t possible, you can make small concessions to what they want along the way. Even waiving a contingency can be seen as a sign of good faith and help get the deal done. If you are adamant about the price or not making changes in the contract you will irritate the seller and stall the process. If any other offers come along, you can believe the seller will choose theirs over yours.
The ideal negotiation is when both sides walk away feeling satisfied with the result. If you make your offer and don’t budge at all the seller will be left to either accept it or wait for another offer. Simply because they don’t feel like they are being respected, even if their situation is dire, they may not sell to you. This is why lowball offers often times have a negative impact when looking for a good deal. Instead of trying to start negotiation they are seen as insulting and will go largely ignored. This is much more the case if you are dealing with lenders. They won’t even respond to offers that are below what they perceive the threshold to be. If you had simply made a higher, more representative offer still well below the true value you would have had a chance of getting it accepted. By shooting for the moon you ruined any chance.
Negotiating real estate takes a delicate balance of knowing when you can push and when you have to lean. Many deals are gained or lost every day just by the approach you take to making offers and counter offers. Think about what the seller’s goals are and focus on the big picture. You are trying to gain real estate not win the negotiation.