Whether you are looking to buy a primary or a secondary residence, the rules of real estate negotiations apply. Various factors like market value and buyer interest impact how you handle negotiations. By working with an estate agent in a desirable area like the 30A stretch of the Florida Panhandle, you can increase your leverage in negotiating a purchase.
Do Your Homework As of summer 2014, real estate pundits declare it’s a “seller’s market”, but that doesn’t mean that you –buyers—can’t get a good, fair deal in a real estate transaction. Much of negotiating a real estate purchase involves buyer preparedness. The more knowledgeable you are, the stronger your chances are of negotiating a fantastic deal regardless of the market. Thus, the first tip in negotiating a real estate purchase is to do your homework.
- About the market: Work with your realtor to get information about the area’s market; if need be, go so far as to get specifics regarding comparable recent sales in the neighborhood and even on the street or in the unit (if buying a condominium). Take notes in terms of what’s available; the more properties that are listed when you are looking, the more leverage you will typically have.
- About the seller: Find out from the seller (or your realtor) why they are selling. Are they moving due to job transfer? Have they already purchased another home? In the case of buyers in the 30A area, are they letting go of a secondary property to free up funds to buy a different investment property?
- Knowing the seller’s motivations can help you tailor your offer; if they are transferring, already have another property, or need to free up funds to buy another secondary property, then they’ll be looking for a quicker closing. Alternatively, if they have not found another home yet or have children needing to finish out a school year, then they’ll want a longer closing.
- About the listing: How long has the property been on the market? Has the seller ever or recently lowered the price? Sellers with recently-lowered prices might be more wary of accepting a significantly lower offer.
Combined, this wealth of knowledge will provide you with an outline of where you stand and what kind of offer you should make.
Have a Strategy
Depending on what you glean from gathering information about the market, the seller, and the property itself, you can make a determination about how to enter into the offer process. Your realtor can advise on the specifics, but here are three considerations for your strategy moving forward.
Handling a Hot Property
If it looks like the property might have a lot of interest, then you want to enter into negotiations with a desirable offer. This doesn’t necessarily mean coming in at your best offer monetarily, but it does mean perhaps getting an inspection before putting in an offer to minimize contingencies.
Showing Your Softer Side
One strategy that has worked well for buyers is to accompany their offer with a personal note. For example, if you are buying a beach house or a cottage, talk about who will be living there. Describe who will enjoy the property. Mention the memories you hope to make there. Sellers usually have some kind of attachment to a property, so the seller knowing how you will cherish their former residence could have some pull.
Playing it Cool
That said, there is a difference in writing a persuasive narrative to show your interest and in laying all of your cards on the table. Keep your personal investments to yourself; you lose leverage in a negotiation if the seller is able to sniff out how desperate you are to get the property.
So, regardless of whether or not the property’s postcard-worthy sprawling view of Florida’s emerald coast makes you want to squeal with delight, maintain a façade of indifference; make it appear that you would have no problem walking away from the home and finding another view you would like just as much.
It’s all the better if you can legitimately keep your emotions out of the decision-making process. A clear head is ideal when it comes to real estate.
When to Hold ‘Em and When to Fold ‘Em
Operate Based on the Property’s Value
Last but not least, use the home value as your threshold for navigating the process, not the seller’s asking price. Ideally, the asking price will be reasonably close to the home’s value; however, you may encounter situations where sellers have either over-improved a property or who overpaid and are trying to recoup their losses by selling above market value. In these cases you have to “know when to hold ‘em and when to fold ‘em.” In other words, the seller might never be willing to see eye to eye with you; this is usually more common with sellers who have recently listed or who are working without a realtor’s assistance.
You will also want to have a final offer in mind (obviously, it should be within your means), but don’t let a few thousand dollars make the difference in a great investment or in a purchase you truly, truly want either; the seller will have a bottom line as well. As long as you’re close, you can do business.
Another reason to have a bottom line in mind is that in a multiple offer situation, you might be asked to come back with your best offer at which point, you need to be prepared to lay your cards on the table (in terms of the offer, that is).
There are many variables that go into making an offer on real estate. The best way to get what you want are to (1) do your homework, (2) form a strategy, and (3) know when to draw the line. Work with a realtor who knows the area to help you with your homework and to form a realistic strategy for negotiating the buy that ends with you getting a fantastic fair deal on a piece of property that you can’t wait to call home.
With so many beautiful communities from idyllic Rosemary Beach to vibrant Destin, it’s no wonder so many want to call 30A home (or home away from home). If you’re looking to buy property whether it be a beach house or a condominium on the Florida Panhandle, get in touch with knowledgeable coastal living expert, Melissa Clements, who will help you buy your dream beach home and who will show you around town while she’s at it.