You’re really interested in a property for sale and want to make a bid, but you don’t know where to begin. As much as you want the property, you don’t want to pay more than it’s worth. So, what should you do to draft the best deal? And what’s the first step in the negotiation process?
Remember, making an offer on a property has no set rules and no set prices. The transaction is like playing chess, where each party is waiting and monitoring each other’s moves. To get the property you want at the price you want, you’ll need to create a certain strategy. But first, you have to know where to start.
Know the Process
To begin with, one must have a general understanding of the process involved. Usually the process differs from one state to the other. Some areas allow verbal offers, but others will require it in a written form.
Before jumping into the process, make sure you understand the customs in your area. Make the offer in writing, which will reduce confusion.
Know the Lay of the Land
Start by meeting the agent with the aim of getting a better understanding of your situation regarding the property. Agents often ask plenty of questions and formulate ideas on an offer that is within your budget. The process will often involve numerous phone calls and emails, property visits, and possible inspections.
Fully research all important factors about the property that will be helpful in making an offer. This will determine whether it really satisfies your requirements. Understanding the seller’s motivation for selling a property and the desired settlement date will help make your offer stronger.
Considering your budget and the property’s pros and cons, decide on a specific amount you want to pay and a strategy to accomplish it. Also bring with you lots of patience. In some situations, property offer and acceptance can be stressful and might take some time. Don’t hurry the offer process.
Questions to Ask
The answers to these questions will give you better control of your negotiating position:
- What’s the proposed settlement date? In some cases, offers are rejected not because of the price but rather due to the settlement dates and conditions. Remember, it’s not all about price, so it’s not always necessary to up your price.
- What’s the seller’s target profit? Many sellers are hoping to net a certain amount in a property sale. In this case, the seller may be motivated by a particular reason. The answer to this question will give you an idea of how to craft a strategy and close the deal.
- How long has the property been on the market?
- Has the asking price already been reduced?