ROLE OF NEGOTIATION IN BUYING A NEW HOME:
Every home buying situation is unique whether you are first-time buyer, experienced investor or anywhere in between, NEGOTIATION plays a key role in buying a new home. It practically is a process where the discussion is aimed at reaching a mutual agreement between the parties involved in the entire home buying process. It is a challenging course but definitely the most vital step to get the best deal possible on the home you want.
Owning a home comes with a price you would want to pay for something that adds an emotional value, an investment appreciation value, a societal status and offers continuous living security. Here are some tips you can pick up if you are planning to buy a home or are already in the process of buying one!
- Market Research and Surveillance
This is a preliminary and base step one should follow to know the local real estate market of the property you are interested in. Understand the price trends, community statistics, connectivity’s, whereabouts of the developer if it is a off-plan property, reason for sale if it’s a resale property and competitive property’s market value. A well-informed negotiation offer presents you as a serious buyer while you perform further buying proceedings.
Pro-Tip: Being updated or subscribed to online property/real estate portals helps you in a great way here.
- Present yourself as an Authentic Potential Buyer
While you seek to buy a property from a credible and trustworthy seller, so does the seller seeks for a financially sound or a creditworthy buyer. It is very important for you to have a clear picture of the amount you can contribute from your savings and the amount you can contribute comfortably from mortgage. Having a clear financial plan for purchase of potential home(s) makes the buying process more amicable and you owe edge in putting across and approving your negotiation terms.
Pro-Tip: Ensure that you possess a substantial credit score to avail hassle-free and timely mortgages from banks or other financial institutions, to support your genuine buying interest. Obtaining pre-approval for a mortgage strengthens your position as a buyer.
- Identify and communicate your buying needs:
Broadly house buying decisions depend on price, payment terms, location and size of the property. As a potential buyer-negotiator it is very important for you to know yourself which of the above factors are primary for you to buy a house you are interested in. Once you prioritize these parameters, you are in a better position to let go or stay firm about while you enter into the negotiation process.
Pro-Tip: Freely communicate your buying needs with the seller as it builds mutual trust between both the parties ensuring favorable negotiation terms.
- Negotiate for a fair offer to the closing price:
Negotiation is a collaborative approach and is different from bargaining which is a competitive approach. It is important that you negotiate on pricing terms that are fair and realistic. Offering an unrealistic counter offer might lead to loss of interest from the seller’s side and may not treat you as a serious buyer.
Pro-Tip: Reach out to a recent buyer in the same community and understand the realistic deal closing pattern.
- If you don’t ask, you don’t get:
Be confident in asking out for house inspection tours, discounts, mortgage assistance, concession /relaxation of certain fees and service charges, customized payment plans and allied aspects of the property you are interested in. As long as your requests are reasonable and mutually beneficial, your negotiation terms will be accepted to a great extent.
Pro-Tip: Put forward your negotiation terms immediately after you shortlist your preferred home, this entrusts the seller with your frankness and willingness to positively convert the deal.
- Identify the sellers need:
Whether it is an off plan residential property or a resale unit, it is vital to know the whereabouts of the seller and his need to sell the property of your interest. When the market demand is high and few units are left in a particular residential community, you know it is best to trust the seller and close for the best available offer. However, there are instances where the property is under sale due to some emergency, unavoidable or time bound reasons; you surely can negotiate for an offer that completely adheres to your buying terms.
Pro-Tip: Know your seller to your best capacity either through listing portals or through a real estate management company.
- Be ready to repel:
One of the most commonly know negotiation strategy is to be ready to repel or walk away if a potential home buying deal doesn’t work your way. Home buying process is a very practical yet a very emotional decision. Don’t let either of these aspects overpower your decision- making process. Wait/negotiate for a deal that strikes a balance between your financial budget and emotional need. When you repel for achieving this balance, the seller feels more motivated to reach at a mutually beneficial buying deal.
Pro-Tip: Be smart enough to share your reasonable buying needs and stand by it until you receive a mutual deal closing alert from the seller.
- Discover additional incentives:
Try to identify additional negotiation incentives that a potential home of your interest has to offer and barter it with closing price that the seller has to offer. Sometimes the seller’s closing price is non-negotiable so try to show EOI (Expression of Interest) by asking for additional incentives like repairs/maintenance waivers, before time handover, waivers or discounts in certain fees / charges, avail built-in furnishings/ furniture/appliances/fixtures, transactional aid, closing costs, complementary leisure trip or similar other incentives.
Pro-Tip: Be aware of what competitive sellers are offering, identify the shortcomings of your potential seller and communicate your negotiated incentives accordingly.
- Identify a well-known Real Estate Management agency or agent:
Current times real estate industry has seen a great shift it its functional approach and they have progressed to make the whole experience of buying home seamless and hassle-free for its potential client. Right from assessing your home buying need- to offering you the best fit- to conducting house inspections- to negotiating – to availing mortgage assistance- and finally closing the deal. The agents at credible real estate firms have mastered all the skills to provide you a hassle-free ownership process. They truly are task-masters, advisors and implement all possible negotiation strategies on your behalf.
Pro-Tip: Stay connected with local and credible real estate management firms in the community you wish to buy your home as they understand the dynamic pulse of the market plus, they are equipped to offer you better closing prices than what it trends generally in the market.
If you wish to increase the chances of securing a favorable home buying deal, these negotiation tips and strategies will help you to a great extent. Also do not forget… after you are able to strike favorable negotiation terms, close the deal quickly as timely closure of negotiated deals works fully to your advantage.
