Let’s be honest. Buying and selling real estate in the 21st century is a complicated endeavor. While some may find the experience thrilling and enticing, most people are often overwhelmed with the volume of rules, regulations, processes, and procedures involved in buying and selling property. This is particularly true when the negotiation process begins.
Everyone involved in the purchase or sale of property is looking to get a fair and equitable deal. However, there are many unforeseen circumstances and situations that occur throughout your average real estate negotiation that can redefine what is ‘fair’ for either party. Let’s face it. Anyone who comes to the negotiation table unprepared risks losing a lot of money. A successful real estate negotiation requires answers to some important questions before the negotiations begin. To give you an idea of what you need to know, here are just a few of those pre-negotiation questions:
What Is Your Leverage?
Having a full understanding of your negotiation leverage can not only make the process a lot easier, it can be the difference between earning or losing a lot of money in the process. For example:
- Fast Sell – Needing to get out from under your property quickly often presents the temptation to take the first offer that crosses the table
- Multiple Bidders – If there is a lot of interest in the property you’ve listed, you’re in a fantastic position to negotiate for top dollar.
- Foreclosure – Non-payment of your mortgage not only damages your credit, it can often put you in a less-than-equitable negotiation position
- Property Damage – Got a structure in need of costly repairs? Those damages can definitely cost you in the negotiation
These are just a few of the more common situations that can positively or negatively affect your negotiation position. The more complicated the circumstances, the more you’ll need skilled representation at the negotiation table.
How Much Will The Listed Price Change?
Whether buying or selling, it is important to understand a fundamental fact about the listing price in real estate. That number is just the starting point to the entire process. While real estate veterans know this all too well, inexperienced property buyers and sellers are often surprised by the fluctuation of the property’s price. There are many factors that contribute to adjustments to the listed price, like:
- Results of the property appraisal
- Repairs needed to structures on the property
- Additional items, structures, or possessions included in the sale of the property
- Any sale incentives like new appliances included in the sale
- Closing costs
Again, these are the more common variables that can move the price point positively or negatively. As always, the more complicated the circumstances surrounding the property, the more opportunities to lose money in the process.
Have You Done Your Homework?
There is quite a lot of research that needs to be performed in a real estate venture, especially on the front end of the process. There are a wide variety of questions to consider before too many steps are taken towards purchasing property, like:
- Location – This question is typically for buyers to answers as it is important to know the property and school district tax requirements and property values in the area you’re looking to buy property in
- Fair Market Value – It is always a good idea to research the average value of commercial or residential properties are in your area of interest
- Zoning Laws/Regulations – You’ll probably like to know if you’re purchasing residential property near an airport or a factory before you sign on the dotted line. Business owners would be wise in researching whether their prospective property is zoned for commercial use.
A little research can go a long way towards mitigating financial losses or preventing strategic errors when making property purchasing or selling plans.
How Will The Property Be Paid For?
This seems like a fairly obvious question but you would be surprised how many real estate transactions end prematurely because financing was not secured in a timely fashion. It’s never wrong to ask pertinent financing questions throughout the process, like:
- Did the buyer receive a pre-approval or pre-qualified financing agreement for the agreed upon amount?
- Are there stipulations that have to be met before final financing approval?
- Does the buyer have the agreed upon earnest money amount?
There is no such thing as as ‘stupid’ question when it comes to the real estate marketplace, and especially when it comes to the financing of property. Naturally, you can only ask questions that you know to ask which is why the most valuable asset you can have throughout the entire process is experienced and knowledgeable real estate representation who are looking out for your best interests.
Shawn Bolger Ltd. has the knowledge and experience you need to successfully negotiate the best property purchase or sales deal for yourself, your family, or your business. So, before you take your first step into the complicated real estate marketplace, schedule a free consultation with one of our expertly trained team members and let us put our 30 years of real estate purchasing and sales knowledge and experience to work for you. Simply call us at 847-584-1800 and take the stress out of your next real estate negotiation.