Saturday, February 18, 2012

5 tips to negotiating a real estate transaction.

Tara Nicholle Nelson's post on Trulia inspired me to write this one -

Below are my 5 negotiation tips for home buyers and sellers.  Be a savvy home owner/buyer and use these to your advantage.

1. Knowledge - An educated customer is the best customer!  That is my mantra in real estate negotiation.   What are the prices of recent homes sold in the neighborhood (properties actively for sale do not count).... What was the difference between the final asking price and sale price...  What were the days on market... How much is your home loan pre-approval...  What can you realistically afford... What are the sellers constraints...  What are the historic property values in that neighborhood...  Is your Realtor giving you all this information, to give you an edge in the negotiation?

2. Motivation - Be clear on your motivation to buy or sell the home.  All the knowledge that you have about the other party helps, but also consider your own reasons for the move.  What is a fair price for the house?  What are the alternatives if you do not buy or sell and how cost effective are they?  Are you negotiating further for pennies at the risk of losing the deal?  Are you holding out for more money in a declining market...or holding on to an empty house and continuing to pay monthly expenses in the hope of a deal in the future?  Is your commute affecting family life?  Are there any other homes you like just as much?  Is an additional $50 or so in monthly payment, keeping you from buying your dream home?   Are you putting your life on hold, waiting for the market to go back to the pre-recession home prices?  These will help you negotiate wisely, putting things into perspective.

3. Time Pressures - Negotiating can be tough when working with a looming deadline.  Lease running out, corporate relocation in the works, school year starting, your home already sold and short term storage and rental not ideal....are all situations that may force you to make hasty decisions.  Plan ahead and give yourself some more time.  You cannot negotiate strong when you are under time pressure.

4. Other than Price - Have you considered negotiating factors other than the price of the home?  The settlement date, appliances, inspection repairs, escrow deposits, contingencies are some of the ways you can get a better overall deal and an upper hand in the real estate transaction.

5. Realtor - Do you have a good real estate professional representing you in the transaction?  Real estate websites like Trulia have many questions in their Q&A section where home buyers and sellers express their frustration at deals that went south, due to negligence or poor representation.  Many things can go wrong in a real estate transaction even after you have an executed agreement.  A knowledgeable agent knows the contracts and knows your rights, so they can negotiate strong on your behalf and protect your best interest.

Feel free to reach out if I can be of assistance in your negotiation.  Please share your negotiation story with us in the comment section below.

Bela VoraREALTOR®, 
Coldwell Banker Preferred - Exton
Office: 610 363 6006; Cell: (484) 947 3127
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