Everyone wants to be successful in the real estate marketplace. The transaction process is unique, and can be very complex. Both buyer and seller desire to have a favorable outcome in which they feel they were successful in the negotiating process. Each party to a contract needs to develop a strong bargaining position so they can realize the most from the transaction. Following are keys that will help you when negotiating:
· Determine the market environment – Is it a buyer or seller’s market, or is it an environment where supply and demand are about equal? It is better to be in the market place when the market favors your position, but that is not always possible. Then you need to figure out a way to get into more favorable position, such as: the ability to close quickly, or locate property in a very desire neighborhood where there are few sales, etc.
· How can I gain leverage – Sellers have an advantage when they are involved in a multi-offer for their property. This allows the seller to choose the offer that has the best terms; that is not always the highest sales price. Alternatively, the buyer who has an opt time period within their contract, may have more leverage to negotiate for repairs and/or adjustment in sales price.
· Pay attention to details – Everybody pays attention to the sales price, but sometimes buyers and sellers do not pay enough attention to other details within the contract. For instance, who is paying for the title policy, survey, repairs and the seller paying part or all the buyers closing cost? Remember, these costs will affect the buyer and seller’s bottom line.
· Financing – A real estate transaction is the trading of house for money. Realize a buyer who has been pre-qualified or pre-approved for a loan is no guarantee that the transaction will close. If the buyer has done either of the above with a lender, this only represents lower risk to the seller. Being pre-approved is stronger than pre-qualified. Other things that can cause a loan request to be refused are: low appraisal, title issues, and survey problems etc. In addition to above factors, when there is low interest rates, this tends to create more buyers for properties, and therefore, causing sale prices to rise, which benefits the seller.
· Representation – When the seller or buyer is not being represented by a realtor, this may create an advantage to the other party of the transaction. Normally, when a buyer or seller is not represented by a realtor, they are not as knowledgeable about the real estate transaction process versus the person who is being represented by a professional realtor.
In conclusion, all parties desire to have a positive feeling about the transaction they negotiated several months later versus having second thoughts on things they wished they had done during the transaction proceedings. Most important thing to do before starting, is to become knowledgeable, and employee the services of a professional.
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