In order to get the best price on a property, you may need to negotiate with the seller. But many buyers rush in before doing their research and make mistakes that could have been avoided.
So what are the most common negotiation mistakes buyers make?
Not understanding the seller
Gaining an understanding of why the seller is moving could help your negotiations. For example, if they have already purchased another house or are facing bankruptcy, they may be more desperate to sell compared to other sellers. Anything that you can find out about the seller’s situation or the local property market could help strengthen your negotiating position.
Not doing your homework
Many buyers often end up overpaying for a property because they haven’t done their research beforehand. It is important to look at a range of other properties to see what they are selling for. This will give you a good sense of what the property you are interested in should be worth and whether it is worth making an offer or not.
Not having other options
Even if you think you have found your dream home, it is important not to put all of your eggs in one basket. If you only have one property in mind, you may develop the ‘fear of missing out’ condition where you become desperate and give in to what the seller wants, even if you end up over paying.
While house hunting it’s good to have a few properties on your wish list to help keep you level headed. By doing this you will know that even if you don’t get this property, you still have other options available.
Even though you don’t want to seem too desperate, it is still important that the real estate agent knows you are interested. If you act too disinterested, the agent won’t want to waste their time with you, especially if they have other interested buyers.
Offering a specific number
When you make your first offer to the seller, it may be beneficial to offer a price range rather than one specific number. Giving a price range will provide more flexibility, especially if you are making an offer below the asking price. For example, if the asking price is $550,000 and you offer $520,000, it may sound too steep for the seller and they may move on to the next buyer. However, by saying between $520,000- $550,000, it allows for some wriggle room and you may be able to negotiate down to the price you want easier.
Forgetting key terms besides the purchase price
Although the purchase price may seem like the main thing you should negotiate, don’t forget to think about the other terms. It is important not to assume certain things will come with the house. For example, if the property has a pool, you may assume that all the cleaning equipment comes with it, but then find out after you move in that the sellers have taken it as their next house has a pool.