So you got the house of your dreams and are looking forward to buying it. Whether you are looking for a home in which to live or an investment property, you have to learn how to make the right deal for you. Negotiation is an art form that can be learned by anyone. There is nothing mistaken with asking someone if they will take less for something than the amount for which they are asking. But there is more to real estate negotiation than just trying to get a lower price on a home.
One of the ways that you can make money in the real estate market today is by instituting the short sale. The short sale is when you purchase the property before it goes into foreclosure. This takes negotiations with both the current owner of the property and the bank who holds the mortgage on the property. If you have good negotiation skills, you can create equity out of thin air when you facilitate the short sale.
When you are ready to purchase a home, you normally draw up a real estate contract for the amount you wish to pay. The home is listed at a certain amount, and you will most likely knock a percentage off of that listing. You can always come up, but you can not go lower, so it is best to offer a low figure at first.
Information is Power
In a down market like what we are experiencing now, you will want to offer much less, especially if you know that the current owner is heading to foreclosure. You can discover this information from the real estate agent or simply by asking the owner why they are selling. Look for tell-tale signs such as the property being a mess and no upkeep. This indicates that the owner cannot afford to care for the property any longer. Take the time to talk to the owner and tell them that you can help him avoid foreclosure and be able to walk away from the deal without it costing them any money.
Make it a Win-Win Situation
You can then negotiate a price with the owner and tell them that you will negotiate with the bank to let them out of their obligation for this price. Be sure to stress that it will not cost them any more money and that they can stay in the home until closing so that they can get their affairs in order. Then you have to negotiate with the bank. The bank is going to have to release the mortgage lien so that you have clear title to the property. You will have to convince the person who is in charge of short sales at the bank to release the mortgage for less money by bringing up the fact that the owner is destitute, you have the money to buy the property and that they will lose even more if they go into foreclosure.
Many people are afraid to negotiate. Negotiation is a true art form and skill that can be learned in any real estate investment course. Learn the art of negotiation before you attempt to purchase real estate.