How To Negotiate A Good Price With The Seller
Once a real estate investing opportunity has been assessed, and a target price has been reached, it is time to present an offer to the selling party. This offer can be made in person at the home itself, by phone, or even by email or any other means. You probably will have better results by making offers in-person and it gives the possibility of dealing with the subject because you will have more time, although each investor is unique, and you must find the most comfortable and effective way for you.
Once the sale price is known (which is almost always negotiable), it is good to start with a price lower than what they would be willing to sell. There are a number of homeowners that would sell their home for 10%, 15%, or 20% less than the initial price or sell it for the offered price. Therefore, the question to ask is the following “What do you think is the price of this home in the current state? Sometimes the answer will be a high value, a price at which they would like to sell the home, and they may not want to budge. Although, if you did your homework, you probably could make a good offer. Many sellers know there can be a negotiation, and they start with a high price. Knowing this value is key to having a reference point.
The preferred option is to raise this issue over the phone the first time you contact an owner or real estate agency, as well as raise it just before making an offer. Perhaps this price is reasonable and fits into your plans, even if the owner won’t drop the price. If further negotiating doesn’t work and you know that it is a good deal, then don’t walk away from it. It is best to secure the deal. In order to move forward and be able to get a better price, a question such as “It is a higher price than what I can offer, would you accept a quantity below that value?” In a large percentage of cases, the other party will tell you something like this “Well, we can go down to such a price, but not go down a lot from there.”
At this point, the actual negotiation begins. You should present an initial offer at this time below your target price, which will allow you to raise it later. However, if you present a price that is too low, many sellers might not like that and end the negotiation.