Real Estate Negotiation Time Power

Real Estate Negotiation Time Power



Real Estate Negotiation - Time Power
One of​ the​ crucial elements of​ real estate negotiation is​ time .​
Understand and​ master the​ use of​ time, and​ you can buy a​ home for​ thousands less .​
Here is​ one of​ the​ most important aspects of​ time:
Deadlines In Real Estate Negotiation
Time is​ of​ the​ essence .​
It even says as​ much on most real estate contracts .​
What does this mean? It means that whoever controls or​ understands the​ elements of​ time has the​ better negotiating position.
When I​ bought my first piece of​ property, I​ asked the​ seller why he was selling .​
He said he was moving .​
I​ asked him when he was moving, and​ he said in​ a​ couple weeks .​
He also mentioned that he wanted to​ close the​ sale before he moved .​
I​ offered him 20% less than he was asking, and​ he accepted.
He gave away too much information .​
Specifically, he gave away his deadline .​
One of​ the​ most important things to​ understand in​ real estate negotiation is​ deadlines .​
The two specific things to​ remember are: 1 .​
Don't give away your deadline(s), and​ 2 .​
Find the​ other side's deadline(s).
Find out whatever you can about any relevant deadlines .​
Sometimes there isn't a​ clear deadline, or​ there are several deadlines for​ different parts of​ the​ negotiation .​
Whatever the​ case, the​ more information you can gather about those deadlines, the​ better.
How do you use that information once you have it? the​ crudest method is​ to​ simply delay and​ wait until the​ last moment to​ negotiate .​
This only works if​ the​ other side doesn't walk away, and​ if​ your own deadline permits it .​
It also requires that you don't violate any of​ the​ terms of​ your purchase offer, so the​ seller can't sell to​ someone else.
A bit of​ sophistication is​ required to​ use this information effectively .​
You may want to​ start by identifying what is​ most important to​ you in​ the​ negotiation .​
For example, is​ the​ price or​ the​ terms the​ crucial element for​ you?
Let's assume that price is​ most important to​ you .​
When you wrote the​ offer, you put some price on it, but you have inspections and​ other contingencies that allow for​ everything to​ be renegotiated .​
The process of​ inspections and​ negotiations ties up the​ property, so your competition is​ excluded for​ the​ moment .​
Then you learn that owner really wants to​ sell by the​ start of​ the​ school year, because he will be moving with his children.
Work on everything else in​ the​ negotiations except the​ price .​
Have inspections done, agree on what will be included with the​ property, etc .​
As the​ seller's deadline approaches, he will be getting anxious to​ close the​ deal .​
Then you let him know you're ready to​ close quickly .​
Of course, you'll need the​ price adjusted due to​ the​ results of​ the​ inspections.
At this point the​ seller has the​ choice of​ throwing away the​ whole deal .​
This means starting over, and​ not moving when he wanted to .​
Alternately, he can be happy that he got what he wants most - a​ quick close .​
This means giving you your price.
This points up the​ importance of​ getting information on the​ other's deadline, but also the​ importance of​ not revealing your own .​
When I​ was a​ real estate agent I​ heard the​ story of​ a​ man who sold his property for​ a​ large profit .​
He had to​ pay $80,000 in​ capital gains taxes unless he rolled the​ money into another property, as​ a​ title 31 exchange .​
He had 60 days to​ close on the​ new property.
Imagine the​ abuse he would open himself to​ if, with ten days to​ go, the​ seller learned of​ his deadline and​ the​ cost of​ missing it .​
He could threaten to​ delay closing unless the​ buyer paid $10,000 extra for​ some old coin-operated washing machines, for​ example .​
Overpay by a​ few thousand, or​ lose $80,000 .​
What do you think he would do? You can see the​ power of​ time in​ real estate negotiation.




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