When negotiating to buy a property, I increase my chances of getting the exact deal I want by giving the seller options.
One way I do it is by negotiating the financing terms I want at the same time as I negotiate price.
Let’s say I wanted to buy a certain property for $200,000. If I can convince the seller to provide financing at a reasonable rate, I’d probably be willing to pay 5 percent more just to avoid the hassles and fees involved in finding and securing a lender. To avoid having the seller say “no” to my offer, I would say something like this:
“The best I can do is $200,000 if I have to go to a bank for financing. They’re going to require me to prove the rental income, pay for an appraisal, and do a ton of paperwork to qualify for that loan. So if you’ll accept my $200,000 offer, I will close on the date you want.
“But if you are willing to provide at least 70 percent of the financing, I can offer you $210,000. And I would still be willing to close on the date you want.”
By giving my seller these two options, I make him feel like he is in control of the outcome of our negotiation… even though either one would be a great deal for me.[Ed. Note: For more insider strategies for getting started as a real estate investor, sign up for real estate expert Julie Broad’s free monthly newsletter.
The best time to get into real estate is now. Take advantage of the foreclosure boom with Early to Rise’s Bandwagon Raiding Machine here.]