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Real Estate Negotiation - Three Techniques

The following are some simple real estate negotiation techniques to try the next time you buy a home or investment property.

Using The Power Of Expertise

I was looking at a house once with an agent who knew building codes and construction costs. He had suggestions for converting the basement into livable space. He knew what size windows would make it legal, and how much it would cost. He had other good suggestions. In fact, he was so helpful with his expertise that it was easy to forget that his job was to sell the place to me at the highest price he could get.

That is the power of expertise. To use it when you are buying a house, have expert opinions ready. For example, if you might get the realtor to show the seller the official statistics for "days on the market" for listed homes, so he'll feel motivated to sell. Carry an expert's magazine article on the costs of maintaining old houses when you go to look at that Victorian home. If you know about roofing, point out any flaws to a seller.

Use Time And Other Investments

Money is not the only investment people make. Time, effort, and reputation are some of the other things that are invested in a negotiation. Nobody likes to lose what they invest, and using that fact gives you power - if you use it.

For example, if you are hoping to get a major price reduction, spend an hour or two talking to the seller. Only then should you make your low offer. He's less likely to walk away than if you made the offer five minutes after you got there.

The sellers decide what they want to invest into a negotiation, whether it is time, trouble, money, or whatever. You decide when to reveal your needs, demands or requests. If you can, wait until they have made some investment.

Real Estate Negotiation By Not Caring

Generally, he (or he) who cares least has the most power in a negotiation. I was once selling a piece of land, and the buyer drove a long way to meet with me. One of the first things she said was, "The price seems kind of high. Why are you asking so much?" I honestly answered, "I guess because it's such a beautiful property that I really don't care if I sell it or not." She paid full price.

The appearance of not being too concerned or anxious will help a lot. The most power, however, is in truly not needing to worry about the deal too much. To that end, try to line up other options beforehand. You may even want to mention these options during the negotiations. "You have a beautiful home, but the other three we are looking at are selling for a little less, so I'm not sure..."

Of course, a seller might mention that there are others coming to look at the place the next day. He might act unconcerned about selling, as I did in the example above. All of these real estate negotiation techniques are useful for buying AND selling. As a buyer, keep this in mind, so you know when they are being used by the seller. The lack of concern may be real, or it may just be a ploy.


About the Author: Steve Gillman wrote the book: Cheap Homes - How To Save Thousands Buying Your Next House. To learn more, and to see a photo of the beautiful home he and his wife bought for ,500, visit http://www.YourCheapHome.com




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