One of the most common fears new investors face is negotiation. Many people, especially new investors dread having to discuss prices and terms with real estate agents and sellers. So what can you do to prepare for negotiating over a property you want to buy (or sell)?
Know your top and bottom lines
Before you talk to anyone, set limits. What numbers would you need in order for the property to work for you? Keep these in mind.
Knowledge is power
Feeling knowledgeable and prepared is a great start. Do your research, and make sure you know how the property compares with similar properties in the area. Is it worth more or less than the average? Will the rent be higher or lower? What are the key selling points? What are the detractors?
Keep emotion out
You need to be hard-nosed and keep emotion out of the process. If the numbers don’t suit, walk away. In investment, there’s no great house that doesn’t make money for you.
Find a negotiation strategy that suits you
Many investors like to start low (when they are buying), to leave room to negotiate up to their optimum price. Others prefer a direct approach and let the vendor know their bottom line from the outset. Have a think about how you prefer to interact with people. We do recommend that you work as much as possible within your comfort zone. Don’t pretend to be a hard-nosed expert if you’re not.
As long as you’re clear about the terms and prices you are willing to accept and you keep a clear head, you’ll have nothing to worry about.