When buying real estate property, the buying price is always lesser lower than the listed price. The average discount is going to vary from one area to another, but it is usually higher than 5% over the listed price. How can you increase that percentage and save more? The answer is simple - negotiate. If you don't have experience in buying a house, the following 4 tips can help make it easier to negotiate with a seller.
1. Understand the Feel of the Market
The negotiations will be supported by learning the current state of the real estate market. You must learn a number of points with the most important ones being the following:
* The period for which a property has remained unsold on the market
* The amount by which the price has dropped from the first time of listing
* The number of times the price has dropped
* The number of deals that didn't go through
* The number of similar houses on sale in the same area
Make sure to negotiate and bring down the buying price to the matching real estate properties on the market. For example, if the final price comes down to $200,000 and comparable homes in the neighborhood are sold at $180,000; you could have difficulty in getting a mortgage for $200,000.
2. Avoid Low-balling
Make sure to be realistic by understanding how low you could go with the prices. Avoid shooting too low prices because they cannot help you achieve anything. There are 3 exceptions to this:
* It is a foreclosure
* The property is considerably overpriced
* The house has been on the market for a long time
An extremely low price offer means you could be insulting the seller. When buying a real estate, keep in mind the "softer" part of the entire deal - every seller loves his/her home. Avoid offering lesser than the actual worth of the property because it is not going to earn you anything. If you find that the property has been priced reasonably, just reduce the offer by a small point over the listing price.
The key is to get a reasonable counter offer from the seller. If it doesn't come, your offer has gone awry. You cannot negotiate with a seller if he/she doesn't respond.
3. Know the Seller
Learn about the seller's motivations. This part is as important as gaining knowledge about the house and the market when it comes to negotiating. Check the selling history of the property to learn about the seller motivation.
4. When to Stop Negotiating
Once you have gathered all the information about the market, the house and the seller, it is time to determine the highest price you could offer for the real estate. If there are many buyers in line for the property, it is important to protect yourself from being caught up in the long cumbersome process. The highest bid price in your mind will enable you to shorten the negotiations and also protect against wastage of time and money.
