A real estate agent can help you with the complexities of buying a home, but it is not the only option you have.
Choosing to work directly with sellers allows you to have complete control over the communication. You may even be able to negotiate for a lower price since the seller won't have to pay for your realtor's fees.
Even if you have found your dream home, the price tag may not be as appealing. However, you can change this with effective house price negotiation techniques.
Since buying real estate is one of the most expensive purchases a person makes, you need to approach the negotiation process like a pro.
A study made by the National Association of Realtors revealed that around 22% of homebuyers made their house purchase without a real estate agent. With the right negotiation skills geared for real estate purchases, you have the chance to lower the asking price and understand if you're getting a terrific deal.
Although, price is not the only thing that's open for negotiation. You can also use your bargaining skills on other factors such as the closing date and contingencies. You can even arrange a deal with the seller to shoulder some or all of the closing costs.
Regardless if you're negotiating for the house price or other factors, you can be more successful if you apply these pro tips:
1. Use Appropriate Persuasion Principles
The six rudiments of persuasion based on Dr. Robert Cialdini's book, Influence: The Psychology of Persuasion is a scientific approach to help make people say "yes."
2. Choose to Negotiate After Inspection
As long as the sale is not yet final, you can still negotiate for a better price. One of the best times to do this is after you get the home inspection report.
The report will reveal to you if the seller needs to make significant repairs. If the issues are minimal only, you can forego repairs and instead ask for a lower price on the home.
3. Learn When to Offer a Quick Out
Offering a seller a quick out is a subtle way of encouraging them to say "yes" to your proposal. Savvy negotiators use this verbal compliance technique to make the other party believe they're in control.
To use this strategy, you must give the seller a quick out or freedom to refuse your offer. For example, you can negotiate for the seller to cover the closing costs using freedom-evoking statements like "You're free to say no to this, but..."
4. Keep Emotions Out of the Process
Don't show your excitement about the house, especially if it's the only one you want among your list of prospects. To prevent getting pressured while talking with the seller and listing agent, you can act as if you have other options.
5. Perform Extensive Research Beforehand
Before starting negotiations, you need to align with your inputs first. To accomplish this, you have to do your due diligence beforehand. Real estate involves numerous aspects, so you must cover as many bases as possible.
Some of the things you should research are:
6. Establish a Strong Buyer Position
Instead of using the asking price as the starting point of your offer, calculate the property's market value. You'll have an idea of the price range – with the asking price as highest and the market value as lowest.
Make an initial offer that is within the price range. If the seller refused your bid, they would still counter aggressively to avoid losing a strong buyer like you.
7. Allow the Other Party to Initiate
Let the other party start the negotiation, giving you the upper hand right off the bat. Similar to a game of chess, your entire strategy will come from your opponent's first move.
This approach allows you to determine the midpoint of the negotiation at an early stage. It provides you a quick overview of what you can counter-offer without stretching yourself too thin.
8. Promote a Positive Environment
Negotiation is an emotional process that can be stressful to both buyers and sellers. Whenever you get a chance, try to maintain a positive environment by complementing the property and everyone involved.
Never mention anything negative such as comments that could hurt your seller's feelings. If you find a broken fence on the property, keep silent and offer your price. The home inspection report will have already pointed out the issues.
9. Always have a Plan B
If you can't make a deal, you'll have another option if you know your Best Alternative To a Negotiated Agreement (BATNA). It prevents you from ending up agreeing to a deal that puts you at a disadvantage.
Real estate negotiations are unpredictable, especially if the seller has deep emotional ties to the property. To keep yourself covered, you must know your absolute bottom line before negotiating and stick to it.
Follow these pro tactics and learn to negotiate successfully in your home purchase. Pair these strategies with an excellent realtor who can help you meet your real estate goals. You'll not only get a deal you're comfortable with, but the process will be smooth, too.
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