Learning how to negotiate on a property is one of the best skills to have when you’re a property investor, as not only will you potentially end up saving yourself some money on the purchase price, but you’ll also end up paying less on other related costs like stamp duty. There are ways to learn how to be a better negotiator, and it helps to learn these tricks and tips early on, so that when you start to really build momentum with your purchasing you’ll be able to get the best price. Of course, some of these tips can only be learned by practicing them, so it pays to get out there and start investing!
- Know the market in which you are buying and selling. This way you know that your expectations about the price that you’re asking or suggesting are fair and reasonable.
- Be confident. If you have the confidence and the knowledge about a house that you’re looking to buy, you’re going to appear more confident to the other negotiating parties and thus be more able to negotiate a good deal.
- Keep the power that you have to walk away from a property. It helps to not become emotionally attached to a house – especially if it’s an investment property – and you could possibly have some other houses in mind that you can potentially purchase.
- Find a vendor who is motivated to sell and then negotiate with them based on their willingness.
- Don’t be afraid to put in multiple offers. It may be the case that you have to put in multiple offers before you’ll find someone who will accept the price you’re wiling to pay. Don’t stop looking though, and don’t back down.
- Don’t get rushed by anyone. If the selling is rushing you, you can always find another house elsewhere. Time constraints can make you feel pressured and force you to take or make an offer you’re not ok with.
How To Be Confident
You’re essentially working to reach an agreement on a price between two parties. You want to be able to stand your ground and you want to be able to have your needs met without compromising too much. Just as too much confidence is a bad thing, so is not having enough confidence. You need to be able to walk into a negotiation situation, keep your head and keep your eye on what you want without backing down or being bullied into anything.
Confidence comes from researching the area you’re buying or selling in and finding out what the prices are in the local area. Once you’re confident on the price that you’re pushing towards, you’re going to be a lot more successful in your negotiations. Keep things amicable and stay calm and confident and you’ll get there. A good buyer’s advocate can be integral in figuring out the best price and in working out what you should be aiming for.
If you place a first bid and it’s knocked back, you’ll have a bit more room to move higher on price. That said, your timing for doing that is going to vary depending on the demand, the number of interested parties and the vendor’s personal circumstances, among other things.
If there are a lot of other buyers interested, it might be best to put a bid in sooner rather than later, otherwise you run the risk of another buyer making an offer and it being accepted before you have even shown interest.