Real Estate Negotiation
You had a crush on a property but find it a bit expensive? The hour of the price negotiation may have come! Unfortunately, not everyone is an outstanding negotiator. If some will not dare to venture on this land, others will sometimes go too far … at the risk of seeing the apartment or house of their dream slip through their fingers.
Real estate professionals will tell you: real estate negotiation is an art that has a strong psychological dimension and is prepared well before making an offer to purchase.
A real estate negotiation is prepared prior to the offer to purchase
If you wish to negotiate the purchase price of a property you have located, you should anticipate this point and not wait until the offer to purchase stage.
A good real estate negotiation starts before the first visit. Even if you do not yet know the seller or the real estate agency, you should try to get as much information as possible from the first phone call.
This first contact should be used to take the temperature: “First of all, you have to find out if the seller or the real estate agent has already received a lot of requests for this property, how long it has been on the market and, above all, for what reason(s) its owners are selling it”. Indeed, such details often say a lot about the level of competition, the condition of the apartment, and the state of mind of the sellers.
For example, a couple leaving their apartment due to divorce will probably be in a hurry to sell it and more likely to enter into real estate negotiations if your financing file is interesting
Benchmark the property with the competition to better negotiate the purchase price.
Compare the property with the competition. Reviewing the average prices per m2 of similar homes in the same neighborhood will allow you, for example, to check whether the posted price is not overvalued.
After the first visit, focus on the actual property. Condition of insulation and plumbing, condominium fees, necessary work, noise pollution… Don’t forget the condition of the condominium, which is a real subject that can help you negotiate. Taking stock of the possible defects and weak points will give you some ideas to better evaluate the price and prepare your arguments for future real estate negotiations.
However, be careful not to take any detail as an argument for negotiation. Indeed, some defects have probably already been taken into account in the evaluation of the property.
Finally, your estimate must be as objective as possible. For example, it will not be possible to negotiate the price because you want to do work that is not necessarily necessary.
Real estate negotiation: don’t neglect the psychological dimension
Buyers often tend to forget: a real estate negotiation is not only financial… It is also highly psychological! This is why it is important to establish a close relationship with the seller or the real estate agent.
Psychological negotiation also consists of putting your offer before that of other candidates for an equivalent proposal. In some cases, you will even manage to get ahead of the competition even if your offer is financially less interesting.
What are the margins of negotiation on the price of an apartment or house?
Once this information is in hand, if you think you are able to negotiate, you will indicate your price proposal in your offer to purchase real estate after discussing the subject with the real estate agent or seller. If need be, the latter may make you a counter-proposal to buy a property afterward. In addition to the administrative aspects, keep in mind that most real estate negotiations are conducted orally.
But let’s be honest: negotiation margins remain limited as competition is fierce. So don’t bet too much on a drop in price, at the risk of losing time and seeing the property slipping away from you.
Finally, don’t forget that in such a context, the seller will generally favor buyers who make an offer to purchase at the price, who pay cash, or who have a solid file with a complete offer to purchase written from a model real estate offer to purchase and accompanied by a cover letter, a loan simulation, and a comfort letter.
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