Negotiations with Seller

[Daria B.]

hi BPers-

I've just begun this process. It seems unheard of to offer 30k below list but I've read others in the forum who actually closed on the deal.

I'm having my agent present an offer but we discussed it first. Location, location, location is what she said to me why the seller thinks she can get list or near list. I worked up a rehab of ~20k and came up with an ARV. My numbers based on this puts it below my initial ask. I split hairs and told my agent what my number is with a cusion to negotiate.

The problem is that my numbers get tight if I go up too much on the offer. The place needs to be brought up to code on electrical  and while that's not a huge cost, other things like the kitchen and batch and those things that kept at a minimum still add up.

I'm not trying to guess what the seller "wants" and won't know until I hear from my agent. But most in this area because of the location want what they want.

What things can I say to entice the seller to come nearer to my offer?

I searched for posts on negotiating in the forum and didn't find my particular scenario. 

I've offered on property in the past and didn't get it only to find that someone else swooped in and got it cheaper than my offer.

This could be a good opportunity for me to hone my skills at negotiating.

Thank you

[Doug Minton]

Negotiating 101... 

Find out what the seller needs, and find out their motivation level.  If they need to net a certain amount, then that can tell you something. If they need to sell due to distress, then that can tell you more about their motivation. 

Negotiating is a skill that must be practiced as often as possible. A negotiator needs to know what the other persons needs are, and then they need to know the available options to present to the person in need. 

For example, to find out what the person may need as far as selling price, always ask, " is that the best you can do?" Keep doing that until they give you their bottom line. 

Another option is to see if they need their money right away, or if it can be deferred, i.e. ask them if they are willing to hold the financing, or part of the financing. 

You also can ask, "if you can't sell you home to me, then what are you going to do?" This can tap into their motivation. 

As an agent, we do a lot of role playing and use certain scripts that ask a lot of questions to draw out the potential clients needs, and motivation. So, work on a good script, practice it and role play, then make the script your own, or make it fit your personality so it doesn't make you sound mechanical. 

Also, get some books on negotiation, and look into Tom Hopkins, and others like him. They train on negotiation and sales techniques.

Lastly, see if your agent can allow you a face to face meeting with the seller. You can start by sending a letter via your agent to the seller outlining what you mentioned concerning the repairs, etc... and how you really love the home and why you want to purchase it.  If you can't get the face to face meeting, then there may not be much else you can do, and if the numbers don't work, then just move on.

Hope that helps.