Negotiating a favorable real estate deal for the first time is a very energizing, very calculative enterprise. Facing off against an unknown agent or buyer and walking away with an agreement, both you and your client will be pleased with requires a lot of practice, dedication, and research. In this post, we will cover the basics of how to negotiate a real estate deal. We will also list out tips and tricks that can help you close your first deal.
Know when to walk away
A genuine fear every real estate agent faces is negotiating a deal with another competent negotiator. During negotiations, every tactic in the book is used by both sides to drive the prices up or down. As a negotiator, budding or otherwise, you must learn to recognize when the deal is no longer in your favor and walk away.
Typically, the aggressive a negotiator is, the tighter the figure he or she is dealing with. Don’t be afraid to walk away from a deal that holds little value for you. It’s always smarter to keep an eye on the bottom line you and your client agreed on.
Have a compelling story
Telling a convincing story is half of the buying or selling a home or property. The other half is good energy, practice, and research. The right story backed with an equally compelling dossier of records and documents is invaluable in a real estate deal. Not only does proper research lend your claims or story some credibility, but it also proves to your opponent that you are serious about the deal. It also makes it harder to beat down or raise up the price of the property.
Know the person behind the agent
After every meeting with the negotiating party, try to find out as much as possible about the other party and plan accordingly. If you understand the person behind the agent, it might help you work out a better deal for both you and your client (if you have one).
Be ready to make some concessions
If you and the agent or seller/buyer are reaching an agreement and you find yourselves at a sudden impasse, sweeten the pot a bit by offering perks. Perhaps offer to lengthen their moving out date, provide a free cleaning service, agree on a low-security deposit, etc. As long as the deal looks interesting enough, the client, most often than not, will meet you midway.
Beware of the legal loopholes and their consequences
An agreement, and what qualifies as a formal, binding agreement, is a very sensitive subject in the real estate market. Certain states insist that a verbal agreement between two parties qualifies as a legal one. However, other states require a contract and appropriate documentation. Before you begin final talks with the other negotiator, you must understand what the local laws of your state say about agreements.
Doing research and learning about laws and your client’s behavior will all be for nothing, if you can’t maintain your calm and stick to your positions during a deal. The only way to learn how to do that on command is to run virtual deals with other people. Practice with your friends, associates, family, and anybody that will let you. Experiencing a deal over and over again will help you compensate for your inexperience; and teach you how to negotiate a real estate deal. It also increase your chances of closing a great deal.