1. Do your research on the area and have superior knowledge of the marketplace.
Knowledge is power when negotiating. Research is the key here attend auctions, research recent sales, importantly talk to agents and go to open for inspections; become an expert in the area. Use your superior knowledge of the market combined with facts and figures to negotiate back and forth until a mutually acceptable price and terms are agreed upon.
2. Know what you want and what the seller wants.
Don't hesitate to ask the agent why the seller is selling. There is always a reason why people are selling and by finding out that motivating factor you can gain a valuable edge. Simple things like the terms of sale will make a difference in the overall price the seller is willing to accept. A 30 day settlement in a vacant house is a lot more attractive to the seller than a six month settlement; alternatively an unconditional cash offer is better than one that is subject to the sale of the buyer's house.
3. DONT put your best offer first.
As a home buyer, you are in the driver's seat so DONT put your best offer first. You can always raise your offer and to substantiate your price, back your offer up with facts and figures.
4. Work with the agent and vendor and don't be unreasonable.
The agent is the middle man in this transaction and therefore it makes sense to establish a good relationship with them. If you are interested and don't want to insult both with a low offer ensure you use facts and figures to substantiate your offer.
5. Take emotion out of it and walk away if need be.
The most effective strategy when negotiating is take the emotion out of the purchase and act as if it doesn't really matter whether or not you get it. Decide what your bottom-line price is, i.e., your final offer which, if not accepted, you are prepared to walk away from the deal.
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