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5 Strategies To Making A Receptive Buying Offer
For every deal that happens, there are at least 10 that fell through. This could be that the buyer’s offer was too low, the seller don’t like the buyers’ faces, buyer being perceived as a jerk, or one of the other thousands of reasons. The gist to note is that deals do not happen on 1 meeting. Even if a price is agreed on the first meeting, the deal is far from being closed. So why position yourself to go for broke on the one meet up? Check out these 5 strategies to make your buying offer receptive to a seller.
Treat the seller with respect. If dealing with the type of seller that does not like you, you have a lesser chance of closing the deal. More often than not, there will be an equivalent offer being made by a competing buyer. Who is the seller going to sell to if he has to choose between a nice guy or a punk? This means that you have to leave out ignorant and insensitive remarks while forever holding your nerve. Because the seller and you are strangers, it is very easy for him to draw up a stereo-type on you just from a simple comment you make.
You have to stay calm at the heat of negotiation and resist the temptation to make things personal. You will be judged to be inexperienced and immature otherwise. Remember that the seller has a game plan as well and maybe even as scheming as you. Treat them with respect and acknowledge that the whole offer and acceptance process is just a game of who blinks first. Do not lose your cool and offend the seller.
The cash offer. This strategy is most powerful for properties that look undesirable on the surface. For example, if we are talking about a house that banks will stay away from, it pretty much means that the buyer base is very limited. A seller of such a property will be thanking the heavens to find an interested party, let alone one who can afford it in cash. You will have less competition and become one of the very limited concrete offers the seller can choose from.
Don’t be surprised to run into sellers who don’t care two cents about a cash offer. It’s just the way it is. When cash matters, it could mean everything. And when it does not matter, it means nothing to the seller. When you do use a cash offer strategy, remember to add a time frame in which your cash offer will be valid. This is to add more pressure to the seller to make a quick decision to sell.
Don’t make a straight price offer. Making an offer for a specific price is like asking a closed question. You get either a yes or no answer. That is tantamount to marketing suicide according to top trainers. So how do you make an “open question” offer? By setting a price range. For example, you do not need to go straight up and say that you are willing to pay $500,000 for a house. You can instead say you value the property at around $400,000 to $550,000.
There is a lot of psychology and mind gaming that goes into this. Firstly, by negotiating with you, the seller has already agreed to work within that price range (which includes going as low as $400,000). Secondly, it engages the seller to negotiate by trying to reach a target. Thirdly, if the seller is talking to other buyers at the same time, you become the final resort should things fall through at the other end since you have theoretically not made a concrete offer yet. From the frustration of a deal falling through with someone else, the seller might just pour out his true expectations and limits as he has grown tired of the negotiating game. There are a lot more advantages of using this strategy. Too many to list them down here.
Don’t use your aces until the final battle. It is common practice that sellers will list down an asking price which they fully expect to compromise. And no idiot of a seller will list down how low they are willing to go on the first meeting. But.. this is the real world… so maybe some sellers do practice that. Anyway, the point is that you should not reveal your price ceiling at the first contact, if ever. Start low and allow sellers to negotiate upwards inch by inch to feed their need to feel victorious. The social element is very dominant in negotiations as discussed here.
Plan your counter offers beforehand and always ask for something in return whenever you concede. If circumstances dictate that you have to play your final ace, hold back from doing it unless you are absolutely sure that it will close the deal.
Be flexible. Everyone, in some way, understands the need to be flexible. The problem arises when being flexible is being confused with being a pushover. Giving a seller whatever he wants will be accustomed to being a pushover. However, making a seller work hard to get what he wants while having to make concessions is being flexible. Never ever give something for nothing no matter how small the issue is to you. Ask for a biscuit if you want. Just never ask for nothing in return.
For example, if you are going to up your offer by $3,000 like a seller wants, request for a new paint job in exchange. You get a new paint job for nothing as you are going to increase your offer anyway and the seller feels good about exchanging a new paint for $3,000. On top of that the seller will start to realise that if he wants something from you, he has to be prepared to give something back in return.