Buying Property Below Market Value

It is through the art of negotiation that you will be able to buy a property for the price you want to pay rather than the price at which they want to sell. There is often a lot hype and mystique around the subject of negotiation but really it is not all that hard as long as you stick to these basic principles. A successful negotiation is where both parties feel that they are getting a good deal. This does not mean that one party has to drastically loose for the other party to win although it may seem that way to both parties. It all comes down to framing the thinking behind the negotiation more of less psychological tactics. Though this article is skewed towards buying a property the same psychological tactics apply to a seller as well. It is simply reversed.

You need to get informed about the property or the at least properties in the area you are considering so that you know what you are talking about. Also you need to get informed about the sellers predicament. Why are they selling? This is the most important question you need to ask. Once you know the answer to this then you can plot the sequence of your tactics. You need to be determined, in a friendly way of course, in getting the an real answer to this question.

However at the same time you need to be evasive, in a friendly way of course, to any questions you receive. You do not want to shed any light on your situation. When I bought my first property I made the mistake of confiding in the agent as to what my absolute limit was. As it turned out the agent used this against me. The property was being sold via auction, I was holding the wining bid. I kept on getting competition from another bidder. As it turned out that other bidder was being coached by the agent I had confided in because he knew where my cut off point was. So it pays to be ambiguous in your answers, you want to cause confusion in the sellers mind as to what your circumstances are.

If you are really interested in a property and you have communicated this to the seller, when it comes to making your offer don't be afraid to put in what you would consider a crazy offer. though do not make it so low that it could be considered insulting. You have nothing to loose and you do need to start the ball rolling in the negotiating process. Besides it might make the seller start to doubt what they perceive is the value of their property. You need to communicate the fact that you care, but not that much. If you hold that thought in your mind, even though inside you may really want the property you will find the negotiating process much easier.

Another technique you want to use is to create a time pressure even if one does not exist, make one up. If the seller is interested in your offer but wants to see if there is anyone else out there before they finally commit to you. though you will need to make it credible you can not simply say you have a week to accept my offer you need to say something like "I need to know within a week if you can accept my offer because I have sold and need to settle on my property" you just need to make it sound credible.

Of course if you are dealing with an experienced negotiator they will of course be trying to use the same tactics on you. However as a writer by the name Herb Cohen once said the person who has the perceived power in a negotiation is the winner. Don't let yourself be pressured into making a decision. If you have informed yourself about the property and the seller then you can take your time in responding to their counter offer. Remember the biggest asset you have any negotiation is the perception of your ability to just walk away from the deal. Like I said earlier, care, but not that much. Taking your time to respond to a counter offer can put doubt in the mind of the seller and make them feel they just want to get the deal done and move on.

As was mentioned earlier a successful negotiation is one where both parties feel they have won. If you are offering a much lower price try to sweeten eh deal with time. Offer to settle earlier than they expect. To do this make sure you have your finance all arranged prior to signing the contract or even better making your final offer. The negotiating gam is just that, a game. Don't get too caught up in the emotion of it.