How Do You Successfully Negotiate a Real Estate Transaction?
Closing a deal as a real estate investor requires much more than being a smooth-talking salesperson. Being successful at negotiating a real estate transaction is a matter of doing your homework. Every real estate investor should complete this checklist before bringing a deal to the table. Discover below what you need to do to negotiate a real estate transaction successfully.
Real Estate Investing Negotiation Checklist
Homeowners usually think they know what their home is worth. The problem is this number can be based on anything from sentimental value to market stats from the first real estate bubble. To leave the negation table with a price that the seller agrees to and is a positive cash flow producing investment, be sure to complete this checklist.
Recently Sold Data: Bring a detailed list of recently sold comparable properties in the neighborhood of your prospective investment. Instead of just rattling off facts and figures, consider printing out full detail sheets for the homeowner to review. The more local the comps, the better!
Estimated Repairs: While you might not have time for a full inspection, create a go-to list of estimates for common problems. Most homes purchased by investors have deferred maintenance. The homeowner will have lived with the issues for so long they won’t see them anymore. Respectfully addressing issues and needed repairs will help support your offer.
Closing Date: Investors have the benefit of a flexible closing date. Ask what the homeowner needs and adjust your date to meet their request.
Property Status: Do your research and find out why the homeowner is selling. Is there a lien placed on the property, are they in the beginning stages of foreclosure or is it a down market and they want to make a quick sale? By understanding what the seller hopes to gain from the sale of their home you can better adjust your terms.
If you do your homework before you attempt to make a deal with a prospective home seller, you can successfully negotiate your real estate transaction, no matter the market. Selling a home can be an emotional decision for many homeowners. By presenting the logic behind your price in a detailed manner, you can avoid alienating the potential seller. Take “salesmanship” out of the equation and use a business-minded approach to each real estate investment you negotiate.