Negotiation fundamentals

As former FBI Hostage Negotiator Chris Voss says, our life is a series of negotiations. We negotiate every day in our lives, negotiate with our kids to go to sleep early, to negotiating for a better salary all the way to negotiating to buy a house.

Negotiation is about finding a meeting point between what the sellers want for their property and what you want to spend as the buyer. When you are buying a house, everything is negotiable.

We negotiate every day… from a better salary to getting the kids to sleep early.

Knowledge is power when you negotiate. And finding out why the vendor is selling can give you powerful information to better position your offer, this is building on the questions you have asked the real estate agent in the previous chapter.

For example, if the seller has bought another house and is pushed for time you could use a shorter settlement period as a sweetener on a discounted price.

Looking at shorter settlement terms, or other finance conditions can save you thousands.

The sellers could be juggling two houses and need to sell quickly… This could be an opportunity for you to buy a house at a discount.

Last but not the least, devise and follow the right negotiation strategy. Instead of making the offer first, let the seller come up with the price. This will give you a clear idea of what the seller is expecting and how much you can negotiate.

For example, if you make an offer to purchase the house at $600,000 when the advertised price of a house is $650,000 and the seller was willing to sell it for $550,000, you will end up losing $50,000 that could have been saved had you not initiated the offer.