Some areas to keep in mind before negotiating for a better property deal.
When it comes to purchasing a property, we all know that negotiation is a great skill to have. Negotiating the purchase price of an investment property is crucial to ensure that your investment brings you close to your financial goals and doesn’t land you in a world of debt and despair. If it is done wrongly, you will probably end up with a bad deal and possibly regret the purchase for a long time.
Keeping that in mind, here are 4 things you should consider before negotiating on property.
1. Preparation is key
When it comes to striking a deal in your favour, preparation is crucial. The biggest mistake an investor can make during the negotiation stages is being underprepared. Make sure you remember the magnitude of what you’re purchasing before investing your precious savings. Invest some time to research the property market. We understand this might be tough for seasoned investors who are juggling multiple properties but proper preparation ensures the property that you’re pumping your money into will be a valuable investment. Having a solid knowledge of the property will put you in good stead in negotiating on price and being aware of any sneaky sales tactics.
2. Don’t mix business and emotions
They say don’t mix business and emotions. We couldn’t agree more. Have you ever entered a furniture shop to buy a basic bed frame but were dazzled by a special edition redwood pine bed frame from north Sweden instead? You walked in wanting to spend RM2, 000, but found yourself trying to justify RM8, 000 and a couple of months of eating instant noodles.
We know that buying a house over your budget can be tempting. When a property is in high demand, at times investors can be caught in the heat of the moment and offer more than what they had originally wanted to spend. It is important to remember to stick to your budget and not let your emotions get the better of you during the negotiation stages.
3. Consider damage and repairs
If a property has failed at an auction or has been on the market for a long period, the owner might be more eager than ever to sell and is more open to considering lower offers. But such a property might come with damages that you should be mindful of. Property damages are not only costly to repair, but it could mean a vacant property and halted cash flow.
If a problem is identified in the pre-purchase property inspection report, negotiators can use this to leverage a purchase price reduction to cover the cost of repairs.
4. Be respectful
It is important to note that during the negotiation stages, you should remain respectful and professional in all communications to maintain a good relationship with the property owner. Overstating damages and claiming that the property is overpriced won’t get you anywhere during the negotiations. This can sometimes be perceived as rude. Instead, try to be polite when pointing out your concerns and back them up with solid evidence.