Negotiation is an important part of both transactions whether by or selling a property. And this is the skill that you require after the initial purchase stage. For example, you might negotiate:
- Prices for property management
- Prices for renovation work
- Marketing services
- Tenant Agreement
Negotiation in the property business is all about discussing terms and conditions with another party to reach a mutually acceptable agreement. It is a skill that might initially seem difficult, but it is essential if you want to come out on top in this industry.
There are a few things you should keep in mind when negotiating:
- Be prepared to compromise – no one can even imagine that some will use force to make them accept something that is contrary to their desires. But it is necessary to show some flexibility to get what you need.
- Don’t be hesitant to ask for help – if you find any such thing that is difficult for you to manage, don’t be afraid to ask for help from your family members and friends. They may have a better understanding than you on that matter and could provide you with some valuable insight into what is the best way to approach the situation.
- Be honest – if you make a false commitment during the negotiations, it could cause serious problems down the line. Always be honest throughout the deal and let your opponent exactly know what you are offering and what you expect in return. Contrary to that, if you tell a lie, not only do you lose the chances of success in the current negotiations but also put your future negotiation at risk, and your reputation will become of an unreliable person. Once the party you are negotiating with comes to know about your lie, their response will be likely very undesirable for you. An investigation conducted by the Kellogg School of Management at Northwestern University, Illinois, found that when believed that they were negotiating with a liar person, they are more likely to employ ‘tough, aggressive strategies. According to Professor Leigh Thompson, said that the most used phrase in negotiations is, ‘This is my final offer’, while on the other hand, many people are heard saying, ‘have a better offer’ when they don’t. First, making a claim that you cannot stand by and go back demonstrates how little is the worth of your words. For the second one, by making a false claim, you are either likely to lose out on a deal that may still bring you profit or expose yourself that you are a liar as soon as you backtrack from your words and accept the original offer. There is a very good way to deal with such a situation, if someone asks you a question that answers you think might land you in difficulties, simply say, for strategic reasons, you are not prepared to answer and take the conversation back to your optimism for the deal. This strategy prevents you from making a statement that damages your personality and risks your deal and with subsequent offers you can make smaller concessions.
- Keep calm – negotiations sometimes turn heated, especially the time when both parties are unhappy with the outcomes. During such a situation exchange of harsh words often take place, this, in fact, is the test of your mental strength to stay cool, and calm and control yourself from saying anything that you regret later. keep focused by staying calm.
- Know your market – before you start negotiation, you should be clear in your mind about how much you will pay for the type of property you are looking to buy. Carefully, look at homes for sale, and check on the portal how they are priced on estate agents’ websites and property portals. Make a comparative analysis between the price of the home and what you get in return for money in terms of bedrooms, floorspace, and key features. Look too how long the properties were on the market as well as the recently sold price.
- Show Curiosity – Try to know as much as you can about the property that you are interested to buy by asking the estate agent plenty of questions. Ask him the reason for selling, how long the property has been on the market, whether have there been any offers before, and whether there is any urgency to the sale. when you visit the property, try to find out what might need replacing such as boilers, kitchens, windows, and bathrooms. If you find any material defect in the property, then you should ask the vendor or estate agent to deduct the cost from the current market value that is required to repair the damage. Higher chances are the vendor would agree on the fair price of the property’s current condition or if he refuses to decrease the price, then you can ask him to bring the property into a reasonable condition by repairing it.
- Know your financial position – have a realistic idea of how much you can afford to pay for that property – in this way, you will be able to set a maximum budget.
- Decide how much to offer – how much to offer largely depends on a few things such as your budget, the condition of the property, and the strength of the market at that time. Also, there are a few things that give you an edge that include vendors in a hurry to quickly move to secure their own purchase, a home on sale for a while and you have cash. All these factors will give an edge.
- Emphasise your strength – don’t just make an offer but confidently present your case for buying the property alongside how much you are willing to pay for that property. So, if you are a first-time investor, it means you are chain free; you are a cash buyer or you have a mortgage agreement in principle, these credentials will make you more attractive than the asking price alone.
- The second offer – if your first offer is rejected, wait for a few days, most probably the estate agent will come back to you for the second or even for the third time with the opportunity to increase your bid. In such a situation, keep yourself cool, and polite and stay business-like, this is the time when the process can become nail-biting. Instead of tempting to go above your price ceiling, be mindful of sellers ‘throwing in’ items such as white goods rather than dropping the price.
All these techniques which sometimes sound nerve-wracking but are essential to turn the tide towards your benefits. If you follow and practice the tips we shared above, you will feel excited and confidently come to the negotiating table.