Real estate investment involves a lot of negotiation either as a buyer or as a seller. In order to get the best deals in either roles you need to understand a few things about negotiation.
When you are the seller the way you view a transaction is significantly different from that of a buyer, but until you can understand the way the mind of a buyer works, you may be unable to speak to the issues that address his or her concerns in a mutually beneficial way.
As a seller, you must be very clear and realistic about the goal that you seek to achieve.
Your goal should be based on the reality of the moment. Your expectation as to the amount that you can realise from the sale should be based on a practical context.
In a boom time economy, you can be highly positive about the price because there is demand, money and less prudent buyers.
You can ride the wave of positive economic trends. However, to have this same mindset in a recession will be presumptuous. If you work with real estate professionals, they are more familiar with market sentiments; they will guide you appropriately.
In order to make the entire marketing and sale process wholistic, it is better to give the brief to represent you, concerning the transaction, to not more than two agents, but preferably one. This ensures that a clearly designated person can manage the communication related to the transaction.
It is generally confusing when you see five banners with “Enquiries” or “For Sale” hung on one property each with its own contact details. Some sellers think that this method will help them to sell the property faster. Unfortunately, this works against their interest by actually delaying the process.
Your duly appointed agent should be like a buffer between you and the intending buyers. Whenever you put up a property for sale, those who show interest and would like to know more about the property are many. Sometimes, these takes more time before the right person or group finally shows up. Your agent will interface with the various interested persons and will try to filter out the speculative from the real.
One of the ground rules that you should put in place is that all offers should be in writing and only those that are in writing should be processed. In addition, all requests for copies of the title documents should be in writing. Keeping a paper trail is one of the key things that must be put in place.
Apart from the importance of keeping records, it also helps screen out those agents who are merely interested in speculation.
Once the offers starts coming in do keep an open mind. Allow both those that are far from or near to your expected offers.
If you are an agent, you need to know that most sellers do not understand or appreciate the efforts that an agent puts into marketing before the result becomes obvious. By showing them the various offers that you have received, the seller is able to feel the pulse of the market and appreciate the effort of the agent.
If you receive an offer that is lesser to your desired minimum, instruct your agent to inform them in writing of your counter offer.
Where necessary you can incorporate other terms that are important to you in your response. Sometimes price is not the most important part of the entire plan. If the buyer is able to meet your needs or come up with a proposal that addresses your concerns this might be the win-win solution that you have been looking for.
Whenever a buyer requests for a payment plan from you, if you are disposed to granting it, then you should put it in writing with a penal clause in case of default by the buyer.
Do make it clear to the buyer that if he or she decides to call off the transaction they have to wait for their refund after the property has been sold and less a previously agreed administrative charge. This is to avoid unnecessary pressure from the buyer, especially where they have paid a deposit or are paying by installment.
Finally, since buyers are always looking for a good deal it is wise to leave a small margin in the price for negotiation. By conceding this margin the buyer is more open minded to sealing the deal.
Withdrawing an Offer
Can you take back an offer? In most cases the answer is yes, right up until the moment your offer is accepted. In some cases, you can withdraw an offer before you’ve been notified of its acceptance.
If you want to withdraw your offer after acceptance, be sure to do so only after consulting a lawyer who is experienced in real estate matters. You want to avoid losing your earnest money deposit or a lawsuit for damages the sellers incurred because of your actions.
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