Five Essential Real Estate Negotiation Tips
To be a successful real estate investor, you need to know how to spot a good investment, how to work with contractors, find good tenants and much more. However, the most important skill to have in your repertoire is negotiation. Investors who are good negotiators have a significantly easier experience when it comes to real estate investing. Since negotiation is such a crucial part of being a real estate investor, we’re sharing five essential tips that’ll help you master this skill in no time!
1. Do your research
Every good negotiator knows that knowledge is power, and negotiations tend to favour the negotiator with the most information. So, when hammering out a deal for an investment property, never come to the table without first doing your research. Know about the property, the builder, the neighbourhood, and the real estate market as a whole. It also helps to know a bit about the person you’re negotiating with. Find out their motives for selling the property and what they want out of the deal. These pieces of information will help you make an educated and appropriate offer or counter offer.
2. Build rapport
In business, people tend to favour people they know and like. That’s why building rapport and maintaining good relationships is an important part of real estate investing. As an investor, it’s your job to make sure the seller likes you and feels comfortable doing business with you. During your interactions with the seller, practice active listening and put yourself in their shoes. This way they’ll be more willing to compromise and meet you halfway when negotiating.
3. Be fair
Negotiation isn’t about winning, rather, it’s about finding a balance. Expert negotiators know that a successful negotiation experience is one where everyone walks away satisfied. When investing in real estate, come to the table with a fair offer – anything below this can ruin the chance of negotiation. When sellers are lowballed for their property, they tend to take offence and may not be willing to reason with you or hear your counteroffers. So, get rid of your “winning” mentality and approach negotiation like a problem solver – offering the best solution/offer for all parties involved.
4. Get comfortable with silence
To become an expert negotiator, you’ve got to get comfortable with silence – regardless of how awkward it is. Silence gives the impression of dissatisfaction, which lets the seller know that further negotiation is required. Silence can also lead to concession – a price drop, better-negotiating terms etc. and the person that breaks the awkward silence is usually the one to concede.
5. Know when to walk away
As previously mentioned, negotiation is about fairness and finding the appropriate offer/solution for everyone involved. With that being said, you’ve got to know when to walk away from a negotiation that is one-sided. If the seller refuses to compromise, and the asking price is out of your budget, it’s better to find a new investment property than to break the bank.
Mastering the art of negotiation is a must for every real estate investor, and with these helpful tips, you’ll be negotiating like a pro in no-time!
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