How to Ace a Real Estate Negotiation?
The Real Estate market is going through a phenomenal change and the properties on sale are ever-evolving in terms of effective use of space, modern and comfortable interiors, nature-friendly location, enhanced connectivity, state-of-the-art amenities, numerous lifestyle-oriented perks etc. These infinite choices available when buying a house can leave you spellbound and confused. However, once all of this has been liked and finalized by your loved ones, the next and the most important factor in home buying are the costs involved.
During your home buying journey, as soon as you have shortlisted a few properties that suit your requirement, it is essential to negotiate the cost of the property and the offers with the developer, so that you get the best deal possible and can own your new property without any regrets. Negotiation is a skill that can be acquired and honed, and so here are 10 tips that will help you ace a Real Estate Negotiation.
DO YOUR RESEARCH
Before you begin the negotiation, be ready with a thorough research. Find out the prices of properties similar to the one you like, in the same vicinity or even within a few kilometres. Also research about what other developers are offering in terms of discounts or offers. To do this, you can gather information from real estate agents, conduct online research, speak to personnel at the different site offices, talk to friends and neighbours or just drive around the neighbourhood and talk to residents there. Knowledge is power when it comes to negotiations. Have verified and credible data and resources handy to make a strong point.
KNOW THE GOALS OF THE DEVELOPER
Apart from researching about the property, it is also important to gather information about the strengths and weaknesses of the developer or the brand at the other end of the negotiation table. It is imperative that you understand what the developer had in mind while conceptualizing the project, what are the ideals that the business upholds, what is the brand reputation in the market, what factors enhance their bargaining power etc. Knowing these will help you to be prepared and positively drive the conversation.
PRACTICE YOUR NEGOTIATION SKILLS
Now that you have all the data you require in hand, make a list of all the important negotiations that you have had, at work or at home, in the last few days or months. In the list, also include the factors that worked for you and those that did not during the negotiations. Understanding your strengths and weaknesses as a negotiator can help you take greater charge of yourself and your ideas. Once you know your greatest qualities and have practiced them well, sealing the deal will be swift.
WEIGH THE PROS AND CONS
Since you already have an idea about similar properties in the area, weigh the pros and cons of the offer before you make your decision. Accept what you think is fair; but also know when you should give in and when you can take a firm stand. Weighing the pros and cons can get difficult with only good information presented. Be as balanced as possible and also trust the developer for its strengths and credibility.
CREATE A POSITIVE ENVIRONMENT
As you can expect, a negotiation process can become confrontational and stressful. To avoid hostility, it is important to create a positive environment that will pave the way for a healthy discussion. You can do so by using your well-researched data to compliment the developer on his or her property, with emphasis on the detailing and facilities offered and also the values he or she lives by. This will set the stage for the conversation that follows. Striking a chord with the developer and the team can ease the negotiation and will make the home buying process seamless and delightful.
LEAVE YOUR EGO ASIDE
In case the discussion does not reach the desired outcome, try and understand the bigger picture, rather than taking an argumentative approach and reaching a dead-end. Understand that the developer may have financial constraints or other obligations that will work as a deterrent to him or her accepting the terms and conditions enumerated by you. Also, there may be certain confidential details that he or she won’t be able to share upfront. It is important to remember that the transaction is not only about you or your dream house, but also about the developer’s vision and personal and financial goals. Opt for what is mutually possible in a given scenario.
BE IN CONTROL OF YOUR EMOTIONS
When you get an opportunity to speak, be in control of your emotions. You might have really liked the property on offer and are hoping that the negotiation is in your favour, but don’t let the developer understand this by oversharing details or displaying the excitement through words, actions or your body language. Be aware or even silent, when necessary, as this will intimidate the person on the other side and may even leverage the outcome of your choice.
FOLLOW THE DISCUSSION
Once you have developed a rapport, let the developer or his or her team member talk about the property, what is on offer, how it differs from other properties in the same league etc. Listen patiently and avoid interruptions. When the developer believes that he or she is in control of the situation, when he or she will be receptive and will listen to what you have to say. Thus, let them lead the discussion and follow the lead. However, respectfully probe as much as possible into what matters to you and your family, until you are fully satisfied.
LISTEN TO UNDERSTAND
Sometimes what you hear may not be exactly what the other person is trying to convey. For example, you may want the cost of the property lowered, but the developer instead may be open to the idea of waiving off certain costs or furnishing a room in your new home. It is thus important to listen and understand what is on offer by speaking to the builder about the finer details. For instance, you might be excited with the offer made by the developer, but calm down your nerves and ask him or her very clearly and objectively about what he or she means by discount or what furnishing a room actually entails. You could also inquire about what else is feasible for him or her and how you can work together to reach an agreement. Go beyond the fancy, obvious information and delve deeper.
CONCLUDE THE MEETING AMICABLY
In case the first meeting does not reach the desired results, conclude the meeting with an air of trust and respect. It is important at all stages of negotiation, since it helps to guide the further negotiations and sets the tone right. Remember, the beginning is as important as the end, so keep an open mind and be ready with your notes before the next meeting.
A real estate negotiation involves being honest, respectful, patient and receptive and these qualities interwoven together set the pace for a fruitful and healthy discussion. Yes, the outcome may not always be what you desire, but nonetheless, a discussion built on the above will certainly lead to more knowledge and insights for both parties.