John F. Kennedy has famously said, “Let us never negotiate out of fear. But let us never fear to negotiate.”
You can use this as a guiding principle whenever you enter a negotiation with someone. Some of the most important instances in your life—times when you’d need to close the best deals—are when negotiating real estate. It only makes sense then to have the proper know-how of negotiation tactics. Here they are, straight from the pros.
Know What You Intend to Pay Before Negotiating
Those who walk away with the best deals know their highest bid before they enter a negotiation. You have to settle on a number decisively so that you don’t end up justifying a botched deal with “It’s only a few thousand more…”
Your Offers Should Be Below the Sellers Minimum Acceptable Price
A seller should always be made to feel like they won something after a hard-fought battle. You should never aim for an offer that you feel the seller will accept. Aim for below their minimum acceptable rate and allow them to counter.
If Possible, Meet the Sellers in Person
Meeting sellers in person makes it much easier to form a connection. Anonymous or faceless offers make it difficult for sellers to know, remember, and trust you. People like doing business with people whom they can trust, and will be much more open to negotiation with them.
Make a Cash Offer
In the real estate business, cash offers are much more preferable than other bureaucratically managed methods. Sellers would rather forego more money from other offers for a lower cash offer that they can get on the spot without hassle.
Let Them Feel Like the Ones in Control
It is always a boon when sellers feel like they’re the ones in control of the conversation from the very start. You can get them to feel this way by using the “but you are free” (BYAF) compliance-gaining technique.
A meta-analysis of 42 studies proves the technique’s effectiveness. The next time you have to negotiate for a property, say “This is what I’d like to propose, but you are free to decline if you don’t like it.”
Strategically Imply You Have Other Options
If you have other options, you can jump ship. This signals that you aren’t desperate for the property they’re selling. You want to steer clear of desperation at all costs. However, make sure that you also signal your genuine interest in the property. You want the deal to work out, but in case it doesn’t, you have other places to go and other sellers to meet.
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