Negotiation on price

[Aditya Soma]

Hello Everyone,

I hope everyone had a wonderful day so far.

In RPInvesting Book  @Brandon Turner says that it's always good start negotiation with 80%-20% strategy(Mean if Property is 100,000 ask for 80,000).   

But, Last few days I meet some Local RE Agents(Windsor ON) one of them said me that now a days if we offer 20% less then asking price that would give a very bad Impression on buyer and 99% seller will ignore the buyer who ask 20% less.

Friends please share your thoughts/Experience on 80-20% strategy, best ways to negotiate and get the deal done.

Thanks

Aditya Soma 

[Doron Nissim]

Hi @Aditya Soma,

there is no straight answer here.. but few things to consider before making an offer..

1. Market- are you in a seller market? meaning more buyers and bidding wars for every property.

2. Type of seller- REO, HUD,Owner, probate etc.. this is a vital information!!

3. Condition of the property- does it needs work, is it in good condition, little work etc..

4. Days on the market- is it a new listing, old listing, back on the market..?

5. Area- subdivision and schools- is it in a desirable area? white collar, blue collar, war zone?

6. House type- Single family house - Condo, Town house..?

7.(little secret) Real Estate Listing agent- top producer agent, big office, new agent? this can help you determined the motivation level of the agent to negotiate the price for you with the seller.

when you have this information you will have the power to make a smart offer.

it might look like a lot of things to consider right now, but after you start making deals, this will be a second nature to you.

also keep in mind when making an offer always ask for inspection period. you can always re negotiate the price after you have the inspection report in hand and use this information again like a smart investor :)

information is power!!

happy investing and good luck making offers!!