At David Ghavitian Avocat’s firm, we help tenants and owners resolve their disputes over property. With years of experience in the property and real estate field, we are happy to share some of our knowledge and experience in negotiation for property buying.
1.The Real Estate Agent
We don’t recommend counting on the real estate agent to do the hard work of negotiation for you. There are many cost-related opportunities for them, such as getting a commission on the value of the purchase of the property. They have another goal of getting the deal done as fast as possible, as there may be many obstacles along the way. It is your responsibility to get down to the nitty-gritty and reach the best deal possible. For example, closing costs coverage, extend the move-in date, who will repaint the house before it’s transferred.
“It is your responsibility to negotiate the price of the property and all the additional costs and timeframes. Don’t think the real estate agent will do everything for you”.
2.Negotiate for more flexibility
Once you’ve reached a closing purchasing date, you’ll want to negotiate the move-in date to the property. You may want more time to sell your property before and avoid the risk of a cashflow problem.
3.Don’t let anyone know your maximum Price
You don’t want the seller or the real estate agent to know the real maximum price you are willing to pay for the property. Remember, the real estate agent has an incentive to sell fast and at a high price because they are getting commissioned on the purchase price. Naturally, the seller wants you to pay the highest price possible for the property. If you really want the home, the last resort would be to offer the highest price possible. But do not let anyone know this in advance.
“Don’t let anyone know the real price you would put for the property, you will lose plenty of negotiating points over that”.
4.Leave emotions aside
Purchasing a property can be a very emotional roller coaster. Especially when it’s purchased by a family. You and your partner imagine the children’s room, the backyard, the neighbourhood and how the whole family could benefit from this “smart” purchase.
But when purchasing a property, it is important to leave emotions aside - or any other sort of attachment to the house, until it is a done deal. Always keep the option of walking away from a (bad) deal if needed.
If you use emotions during negotiations, you can be seen-through by the seller and the real estate agent, and lose points on getting on your negotiating bargains. Another issue is do not show disagreement between you and your partner while discussing with the seller or the real estate agent. It could show them your “weak spots”. You should both be together on each part of the decision stage and therefore any disagreements should be discussed in private.
5. Be prepared!
The most important part to be an effective negotiator is to be ready with all the information needed in advance. You’ll want to know how much capital you have in advance before you begin the negotiation stage. In order to be prepared, talk with your mortgage broker or bank to get a pre-approval.
Negotiating without knowing your cap will not get you far.