The SECRET of the Trade, Part 1: How to Negotiate the Best Possible Price and Terms If You're the Buyer
You’ve heard the news, it’s becoming more of a buyer’s market so why not try to get the best possible price for your new home? I don’t blame you! Let me impart some practical tips we implement to negotiate the best terms for our clients.
I must first preface an issue that often arises: just because a market is going in one direction doesn’t mean a seller is obligated to sell nor is a buyer obligated to buy. One of the key components that keeps New York’s real estate market healthy is that there is a lot of financial stability here. As a buyer, be mindful of that and realize that not every opportunity is a fire sale (in fact most aren’t).
Here are the tips:
1. Practice patience
It takes most sellers a reasonably long time to wrap their head around a shifting market. If only 24 months ago they could have gotten 5% or even 10% more for their home, they need some time to let the new reality sink in. When you make an offer on their home, bear in mind that it may read as a “low ball” when it’s actually an appropriate bid. Don’t be afraid to let your offer stew. If someone jumps in and offers more than you would be willing to offer to begin with then it’s a moot point.
2. Clean and friendly
Keep the channels of communication open and cordial. While wanting to maintain good relationships makes obvious sense, what is slightly less apparent is that you’re also trying to remain top of mind. When the seller finally comes to terms you want them to think of you first so that rather than lower the price and allow it to become a feeding frenzy, they give you the first crack free and clear.
3. Sweeten the pot
Always lead with your sweeteners in the negotiation. What does this mean, exactly? It means, if you want to close immediately but the seller wants to close in 4 months and you’d be fine with that, then push for the closing date you want and be willing to throw that in as a presumed sweetener if it gives you the terms you REALLY want, like a better price. You never know just what secondary terms might be the thing that puts the sale over the top for you, so lead with those in the negotiation and save the big items for last.
While none of the above are overly complicated, they are nevertheless critical in the successful negotiation of a purchase. As a team that represented over $55,000,000 in buyer side sales in 2017, we feel we’ve done well to figure out the current state of the buyer’s market.
Please don’t hesitate to reach out and put us to the test!
And stay tuned for next month’s newsletter where I will go intopart 2 of the secrets of the trade: how to negotiate the best possible price and terms if you're the seller.