How to Negotiate Resale Flat Price

Buying a house is a significant milestone in one’s life, and negotiating the price is a crucial and often tricky step, especially when dealing with a reseller. Unlike builders who are eager to sell, property owners are emotionally attached to their homes, making negotiations more challenging. In this article, we will explore effective strategies for negotiating with owners when buying a resale property, highlighting the dos and don’ts to help you secure the best deal

Do Your Homework

Understand the Market Value:

• Before entering negotiations, it is essential to know the correct market value of the property.
• Conducting thorough research and utilizing resources like property portals and local market insights can help you determine a fair price range.

Assess the Market Situation:

• Determine whether it is a buyer’s market or a seller’s market.
• In a seller’s market, with more buyers and fewer sellers, negotiation power may be limited.
• A buyer’s market, characterized by fewer buyers and more sellers, offers better negotiation opportunities.
• Market conditions can vary by city, location, and even specific properties, so it is crucial to gather information on the average selling time for properties in the area.

Avoid Common Mistakes

Don’t Negotiate Through the Broker:

• Sellers are often skeptical that brokers may negotiate a lower price with them and sell at a higher rate to the buyer.
• Directly negotiate with the seller to establish trust and ensure transparency.

Refrain from Negotiating Over the Phone:

• Negotiating over the phone limits your ability to make personal connections and assess the seller’s reactions.
• If your offer is rejected on the phone, requesting a physical meeting may indicate a strong interest in the property, reducing your negotiation leverage.

Arrange a Final Meeting

Ensure the Presence of All Owners:

• When arranging a meeting for price discussion, make sure you are meeting with the actual owner(s) of the property.
• In case of joint ownership, ensure the presence of all owners (husband, wife, father, son, brother, sister, etc.) to avoid future objections and delays.

Be Cautious of Investors:

• In some regions, investors may have already paid the owner and are selling the property to buyers.
• Clarify whether you are dealing with the owner or an investor, as investors are seasoned negotiators and may drive a harder bargain.

Building Personal Connections

Introduce Yourself:

• Start the meeting by properly introducing yourself, sharing your background, reasons for buying a house at the location, and demonstrating that you are a serious buyer with the capacity to purchase.
• Encourage the seller to share their own story, creating an opportunity to build personal connections and find common ground.

Understand the Seller’s Motivations:

• Try to uncover the seller’s reasons for selling the house, such as buying another property elsewhere, future plans, or financial needs.
• If the seller currently resides in the house, inquire about their relocation plans.
• Understanding the seller’s urgency to sell can help gauge the negotiation scope.

Negotiation Strategies

Let the Seller Make the First Offer:

• After introducing yourself and establishing a comfortable rapport, ask the seller for their asking price.
• In most cases, the seller will offer a slightly discounted price, allowing you to start the negotiation with an already reduced figure.

Confirm What’s Included:

• Before making your offer, clarify what is included in the sale, such as club membership, parking, advance maintenance, IFMS charges, furniture, or fixtures like wardrobes and modular kitchen.
• Take note of any additional work or expenses the seller mentions, as these can be used in the negotiation process.

Verify Property Details:

• Confirm that there are no outstanding loans on the property, and if there are, inquire about the amount.
• The larger the loan, the greater the interest expense for the seller, providing more negotiation leverage.
• Confirm the timeline and terms of payment, as the seller’s urgency can impact the negotiation scope.
• Check for any additional charges, such as society entry fees, advance maintenance, sinking fund, or IFMS.

Review Property Papers:

• Carefully review the property papers, paying attention to the previous sale deed value to assess the margin.
• While older properties may have a larger margin, focus on negotiating based on the current market price.
• For recent properties with loans, the margin can provide insights for negotiation.

Identify Areas for Improvement:

• Before making your offer, ask the seller about any necessary repairs or improvements in the property.
• If the seller doesn’t mention anything, politely point out genuine issues like seepage, malfunctioning taps, or shower heads.
• Avoid generic complaints or obvious things that could sour the negotiation mood.

Make a Reasonable Offer:

• Based on your homework and the discussions during the meeting, determine your “happy price” and “final price.”
• Quote a price slightly lower than your happy price, allowing room for a small increase if needed.
• Ensure your offer is reasonable and backed by logic to maintain a positive negotiation atmosphere.

Be Flexible and Demonstrate Seriousness:

• If the price negotiation reaches a stalemate, be open to negotiating on other aspects like payment terms or inclusions.
• Show your seriousness as a buyer by writing the seller’s name on a cheque book and adding the token amount, demonstrating your readiness to proceed.

Be Prepared to Walk Away:

• If, after thorough discussions, the deal doesn’t feel right, be willing to leave the negotiation.
• Before departing, spend ample time in discussions, avoid rushing, and clearly express your intention as a serious buyer.
• Provide your contact information to the seller, allowing them to reach out directly if they reconsider.

Conclusion

Negotiating the price when buying a resale property requires a combination of research, strategy, and interpersonal skills. By doing your homework, avoiding common mistakes, building personal connections, and employing effective negotiation techniques, you can navigate the process with confidence and secure a favorable deal. Remember to be humble, polite, and flexible throughout the negotiation, as the seller’s liking for you can significantly influence their willingness to lower the price. With these insights and strategies, you’ll be well-equipped to master the art of price negotiation in the resale property market.