If you find yourself in the middle of a bidding war regarding Windsor real estate that you desperately want, you need to make sure you understand the negotiating process so that your dream purchase can become a reality.
Too many times I have seen ego and pride get in the way of negotiations and it all goes downhill from there. While the process can be tricky, a buyer needs to know exactly what they are getting into and what they should avoid when negotiating to buy a home.
1. Who is the seller?
As a buyer, you need to know where your seller is coming from and what his or her story is. Maybe they are having financial problems or have accepted a job transfer and carrying two mortgages. Any and all information that you know about the seller will be helpful when you start negotiating for their property as it can determine your bargaining power.
2. Do your homework!
Before you make any offer, make sure you know what the real estate market is like in your area. Get a copy of comps for the neighbourhood. This is a list of what similar style homes have SOLD for (not listed at) in the surrounding blocks. If you have selected a nice home in a highly desirable area, with excellent schools, then know that these properties go quickly. But if you are unsure of an area, walk around, talk to the residents and ask questions and see if you can gain some insight on why the seller is moving. Again, you want to go to the table with as much information as possible.
3. Don’t say too much about yourself
If you know that you want a particularly property no matter what the price, by no means tell that to the owner! It’s like buying a car and telling the sales manager, “I don’t care if I have to pay more than what it’s worth! I want that car!” Negotiating with all of your cards out is not in your best financial interest. When in the case of a bidding war, give your best offer first and include a letter to the owner telling them why you love their home. But you don’t have to tell them how much you are willing to go above and beyond your initial offer.
4. Have options:
By having options, it means you are not so desperate and this is something that a seller will take note of when negotiating. If they believe you have another home that you like just as much, they will be more willing to accept your offer if they are not involved in a bidding war. Not long ago a client loved two homes and initially had trouble deciding. When an offer was finally made on one of them, it was made clear that if it didn’t work out, another home was waiting. The sellers, who were desperate for a home sell, took note.
5. Letting ego take control:
Sometimes, ego can overtake the negotiation process. This leaves both the seller and buyer frustrated, angry and completely distraught at the real estate process. While often easier said than done, it doesn’t have to be this way. Often buyers will think they need to be the “winner” and not consider anything at all when a seller counters their offer. I tell my clients to have a price range in mind that they can comfortably live with (and it helps tremendously to have a pre-approval letter) and afford. If a seller meets the price within the range, and that fits your budget, then it’s a victory. If a seller doesn’t come down in price as much as you hope, but it is within your means and you love the home, and if you have negotiated at length, then it’s a win win! Don’t let it be an ego thing. I have seen real estate deals crumble over a few thousand dollars. It really doesn’t have to be that way!
6. Hire a professional, respected and referred real estate agent:
When you are bidding for a home, you want the best possible person representing you. Hire an agent that is well-regarded and is well-known in the area you want to live. Agents that come highly recommended can work well with other agents and know how to negotiate with your best interests in mind.