Buying and selling of property is a tiresome process. There are many steps and procedural formalities that need to be followed.  Usually, real estate deals are generally completed over a span of a few weeks, provided there are no last many changes in the contract entered into by the parties. A few buyers prefer to inspect the premises of the property thoroughly in order to discover any potential problems with respect to the property. The existence of problems in the property can provide the buyer an opportunity to withdraw from the deal, until the problem has been rectified by the seller.

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How do you negotiate a resale flat?

Resale flats are those flats that are currently owned by someone else. Buying a resale flat means that the buyer is taking over the property from the previous owner. As soon as the transaction is completed, the buyer is given the keys to the property.

  • Be clear – 

A seller is never eager to bargain. As the buyer, it is his responsibility to initiate the negotiations. The buyer should find a suitable property that fits within the budget.

  • Being realistic –

The initial offer price made by the buyer should be realistic. It should not be so low that it is not negotiable. Asking for a negotiable price will show the seller that the buyer is willing to complete the entire transaction. Staring with a low price will make the seller disinterested in the sale of the property.

  • Finding out why the property is on sale –

It is important that buyers conduct their own due – diligence in order to find out why the property is on sale. If the property is overpriced, there will be a possibility that it will stay on the market for a long time. It may be so that it is a foreclosure property. Based on the reason as to why the property is for sale, the buyer can negotiate the price of the property. 

  • Closing the deal –

It is important to close the deal involving the sale of the property at the earliest. It is important to remember that three are other potential buyers who may be ready to buy the same property. 

How do you barter a house?

In order to barter for a property, it is important to keep the necessary points in mind – 

  • Knowing the market –

The amount of negotiations that a buyer can conduct regarding a property depends on the neighbourhood in which the property is located. Buyers should be aware of the sale of similar property that has occurred in the neighbourhood. This will help the buyer in negotiating the price of the property with the seller. Buyers also have to be aware of the state of the real estate market. If there is a high demand for property in a particular neighbourhood, it will become difficult to negotiate with the seller. Sale prices for a property differ depending on the quality of the property and its proximity to amenities or public transit. 

  • Not appearing too interested in the property –

It is important that the buyer doesn’t look too interested while inspecting the real estate property. Keeping an over-enthusiastic attitude while looking at the property will lead to the seller to increase the asking price of the property, and will make it more difficult for the buyer to negotiate the price of the property. 

  • Making an offer –

Buyers should approach the seller and talk to them regarding the sale of the property. If the buyer seems genuine, the seller is more likely to give a discount on the property. A good strategy to employ is to find properties that are within the price range. The developers of each property should be made aware of the buyers’ interest in the property and that the buyer would compare all the offers. This would lead to developers competing against each other to provide the maximum amount of discount. 

  • Realistic negotiations –

When approaching a seller for the sale of the property, it is important to estimate a realistic price for the property. There are chances that developers disagree with the lower prices that are desired by the buyer due to various reasons such as high costs. Sellers would be willing to negotiate, but by quoting unrealistic prices and demands, they are less likely to offer a discount on the property.   

How much can you negotiate with a buyer?

While sellers want the highest price for their property and the buyers want the best deal, it is important that both parties meet somewhere in the middle. Negotiating for a property is important, as it is considered as an asset that people own.  

It is important that both parties are aware of the real estate market and the trends that are followed. If a real estate property has gone unsold for a long time, the seller will be keen to negotiate a deal.  It is important to conduct an analysis of the prices of the properties. This involves finding the price of properties that have recently been sold in the neighbourhood. 

While negotiating with a buyer, it is seen that buyers often offer a price that is about 15% lesser than the base price of the property. A trend that is followed in the real estate market is that the seller will usually give a 7-8% discount on the base price of the real estate property. 

How much can you typically negotiate on a house?

Negotiating on house properties can be a difficult task for both, the buyer and the seller. There is a lot of bargaining which is involved in the buying and selling of property, and if negotiations are done properly, many properties sell for below the asking price of the property.

For the purpose of effective bargaining, it is important that the buyer conducts research in the local area where the property is located. This includes looking at the price range at which similar properties were sold in the area.

It is important that the buyer doesn’t look too interested while inspecting the real estate property. Keeping an over-enthusiastic attitude while looking at the property will lead to the seller to increase the asking price of the property, and will make it more difficult for the buyer to negotiate the price of the property. 

Price negotiations on property occur on the sqft price of the property. This price is calculated on the whole area of the property, excluding any amenities that may be given to the buyers along with the property.  RERA has made it mandatory for advertisers to quote rate/sqft on carpet area basis only (excluding private balcony and common areas). Potential buyers can negotiate on bringing down rate/sqft, which will significantly lower the overall cost of the real estate property.

What are the different data points to be kept ready before a negotiation?

It is important to note that real estate property is rarely sold at the price at which the seller wants to sell the property. Thus, it can be seen that the process of negotiation is an important part in the process of the sale of the property. 

  • Type of market –

It is important to understand the type of market that exists, whether it is a seller’s market or a buyer’s market. In a buyer’s market, there are more sellers of real estate property than the potential buyers and in a seller’s market, there are more buyers than the sellers of the property. Understanding the type of market will help to determine the type of negotiations that will have to follow. In a seller’s market, the probability of negotiating property deals is negligible whereas in a buyer’s market you can get good rates from the sellers.

  • Preliminary research –

It is important to conduct a basic research with regard to the prevailing rates in the area. This can be done by finding out the same from real estate websites or other real estate agents/brokers.

  • Reason for sale –

It is important to find the reasons for the sale of real estate property. It is a difficult task to find out the actual reason for the sale of the property, but once the potential buyer is aware of the reason, it makes it easier to further negotiate the price of the property.

  • Finding defects in the property –

It is important to note that there are flaws that may exist in the property. It is because of this that buyers ask the sellers for a thorough inspection of the real estate property. There may be certain limitations that may be present with the real estate property. It is important for potential buyers to be aware of the flaws in the property so that it does not become a cause for conflict with the seller.

After determining all the factors involved in the sale of the property, the buyer has to have a particular price in mind that he is willing to pay for the property. Doing a basic research on the above points will help the buyer to negotiate the price that he wishes to pay.

How to prevent re-negotiations with respect to the sale of real estate property?

Negotiations start after a buyer has made their initial offer to the seller. Because it’s often mutually beneficial to move forward as quickly as possible, the length of negotiations comes down to how fast the agents can communicate their client’s interest and get the deal down in writing. Offer negotiations stop when the buyer and seller have signed the purchase offer that contains the agreed-upon terms. However, there are times when the buyer or the seller would want to further re-negotiate on the purchase offer.

It is important to note that home sale negotiations are not considered as over even after the buyer has signed the purchase contract. Depending on the results of the home inspection and appraisal of the property, there may be a clause in the purchase offer regarding future negotiations. If there is any issue regarding the title of the property or unpaid property taxes, they have to be resolved at the earliest in order to prevent further negotiation over the property. 

It is important to note that there should be a clause in the purchase offer regarding the closing date deadline of further negotiations. Once this date has passed, there can be no further negotiations over the real estate property.  

Conclusion

Before the closing papers of the purchase of the real estate property are signed, it is important to look over the property for the final time. This is done to ensure that there is no damage caused to the property since the last home inspection. It is also important to check the contract in order to determine if any new clause has been added to the contract. It is important for the buyer to conduct the necessary due diligence with respect to the sale of the property. It is to ensure that the property does not have a low appraisal or any title issues which may make the buyer vulnerable to litigation over the rights of the property.