Top 5 Things Buyers Must Do To Get The Best Deal

Last week's blast "Top 5 Objections to Buying Today" generated some excellent feedback and responses from my clients.  Some comments were very critical of the message, suggesting that it bordered on manipulation and dishonesty (Ouch!).  Other comments expressed genuine appreciation for explaining these ideas well and sparking ideas on how to sell things better. 

I like those discussions - at least you're reading, huh?  And because I'm a licensed school teacher and have led countless group sessions over the years, I've learned that if one person in the group has a concern or question, that probably half the group has the same concern or question (and the other half may be asleep or not paying attention).  So I wanted to spend one more week on this topic, flip it around to the other side, and expand the lesson a bit farther.

Last week, I spoke from a "Seller's" perspective:  "Here are 5 things that are keeping buyers from buying.  What are you going to do about it?"  This week, I want to hit the topic from a "Buyer's" perspective:  "Here are 5 things you must do to get the best deal possible."  And amazingly - THEY ARE THE SAME 5 THINGS!

If these 5 things smack of "trying to take advantage of the other side", I apologize.  But the reality of most financial transactions is that the seller is trying to sell for as high a price as possible while the buyer is trying to buy for as low a price as possible.  You've got two parties who come in to the transaction from opposite ends of the spectrum.  Understanding these 5 things will help the sides come to a mutually beneficial agreement.  NOT understanding these 5 things can cause transactions to not-transact at all - even when both sides WOULD benefit if the deal got done.

Yes, in the wrong hands, these ideas can be dangerous.  But not talking about them because it suggests that we're not being honest or fair in our dealings is like burying your head in the sand.  The "wrong hands" already know this stuff - so you should know them too in order to level the playing field.  That said, on to the 5 things:

#1 Objection - Lack of Perceived Value:  When shopping for a home (or any other item), it is a bad idea to let the seller know that what they're selling is the best thing you've ever seen AND that they aren't charging enough for it.  Why?  a)  That's probably not going to encourage them to come down any farther on the price or make any other concessions, and b) It'll make them feel bad about selling to you.  If you sold an old bicycle to a neighbor for $20 and as she was handing you the money, she said, "These things are collectibles and I should be able to resell it for hundreds more than this," you're suddenly not feeling good about the deal, are you?  So don't be mean, but don't let your enthusiasm hurt the deal either.

#2 - Lack of Perceived Urgency: Ever told a sales clerk "just looking" when you really weren't?  Then you get the idea.  Always suggest that you're interested in buying something, but that you aren't in a big hurry and want to take your time to decide.  If the sellers figure out that you have a time constraint that forces you to act right away, they could possibly use it against you.

#3 - Competitor has a Better Deal:  You absolutely MUST know what is happening around you in the market.  A good real estate agent will help buying clients with this by exhausting all options prior to making an offer.  Be absolutely certain your clients understand the current market before they make a purchasing decision.

#4 - Perceived Lack of Funds:  When buying a home, you need to walk the fine line between "I can't afford this (seller will be afraid deal will fall apart and may take someone else's offer instead)" and "I can afford way more than this (seller won't feel a need to make any concessions to sweeten the deal)".  Your buyer should always be pre-approved by a lender before making an offer, but NEVER show up with a $300,000 approval letter to make a $200,000 offer.

#5 - Personal Issues:  Don't approach the seller in a confrontational manner or give them other reasons not to like you.  People want to do business with people they like.  Be likeable and you're far more likely to come back with an agreeable agreement where both sides win.  Avoid hard-ball, in-your-face tactics where nobody wins.  You may be able to get a better price accepted - but good luck getting any help solving closing problems later on if the seller feels taken advantage of.

I humbly offer these ideas in my on-going effort to help my real estate agent partners serve their listing and buying clients better and to help my loan clients improve their financial positions.  The ultimate goal is to help create more transactions where EVERYBODY wins!