Negotiating real estate asking prices: here's what you need to know
Deal or no deal?
Is the property really worth the asking price?
Now that you've got your property financing sorted out, you know how much money you've got to spend, and it's time to start looking for properties that fit your budget. There are two important and very different parts to this process: finding properties within a specific price range and deciding if the asking price for the property you want to buy is actually reasonable.
As with everything, supply and demand determine the real estate asking prices. And since everyone needs a place to live and real estate demand is growing both for private use and investments, prices are high. But under certain circumstances, there is room for negotiation when it comes to real estate asking prices — they can be lowered just as well as they can go up. To help get you prepped for this process, we've put together a series of negotiating tips that will give you an edge when the time comes.
Your first impression of whether the asking price is reasonable comes from doing a bit of homework. For example, check how long the property has been listed online and whether it's listed by more than one real estate agency. Also, look at what other properties in the same area are valued at and how much they're being sold for. You might learn a lot by doing this. If you dig a little deeper, you might even be able to find out how many other prospective buyers are interested in the property and how much they're offering. You can also find additional arguments to assist negotiations by looking at the minutes from recent owners' meetings and any detailed information available about the property.
But sometimes negotiating doesn't come down to how many cold hard facts you have. Sometimes it's just a matter of speed. If you've already been approved for financing or at least have a certificate of good standing, definitely use that to your advantage.
Negotiating real estate asking prices:
The real estate buying/selling process is often an emotional affair, especially for the seller and their memories associated with the property. And sometimes, the seller and the buyer have very different ideas about what the price should be. When this happens, it's a good idea to develop some clear and objective arguments in your favor before you begin negotiating.
For example, finding out how long the property has been listed online is simple. If it's been on the market for a while, your chances of talking the seller down to a lower price are pretty good. After all, the seller is looking for a way to get the property off their hands.
If it turns out that the property is being sold through more than one real estate agency, you might also be able to use this information to your advantage. One of the agencies may already be listing the property at a lower price.
However, it's also a smart move to be more direct. In many cases, good arguments aren't enough to tip the scales – you need to know if the seller has any other offers on the table and how high they are. So why not just ask? If the other offers are over your budget, then you can just stop looking for arguments altogether because there's nothing left to negotiate. Unfortunately, a great personality won't do much for you either. But the good news is: the next property is right around the corner. So, just register here and find a property that suits you and your wallet.
Combing through the details:
more negotiating tips
Now that you've got the most obvious aspects out of the way and assuming the seller hasn't sold the property to someone else in the meantime, it's time to take a look at the property details. Cosmetic repairs and the like aren't worth your time. Instead, pay attention to any missing amenities and take note of them. If the property doesn't have a garage or a balcony, or the terrace needs to be redone, you can use this to your advantage in the negotiations. What if the property only has single-glazed windows or decrepit pipes, or if the cellar is damp? Put it on your list of arguments. And what about infrastructural issues? You guessed it: they go on the list too.
It can also be helpful to look at the minutes from the most recent owners' meetings. Keep your eyes peeled for any repairs or modernization work that was being planned.
You aren't trying to make a list of negative things to make the property look bad. Your goal is simply to get the seller to agree to a price equal to what the property is really worth. So be just as fair to the seller as you expect them to be with you.
If you aren't sure how much cash you'll have to shell out for repairs for a property, it can be a good idea to hire an appraiser. That will cost you money – around €1,500 – but if you manage to talk the seller down by an amount that exceeds the appraisal fees, then it essentially pays for itself. With the properties on Urbyo, you can't go wrong. We review the current state, location, and price of each property before the listing goes online. All you have to do is pick the one you like the most.
Getting an edge in negotiations
by being quick.
If you've already checked your eligibility for financing and know, at least in theory, that you qualify for a loan, this can give you considerable leverage. Sellers who have had their property on the market for some time already are usually interested in concluding a deal quickly. And if you come along more or less ready to sign a purchase agreement, it not only makes you much more attractive as a potential buyer but also gives you room to negotiate for a better price.
If the apartment or house is listed through a real estate agency, the agent is also interested in quickly closing the sale. And if you've already got a guaranteed financing commitment, this is a compelling argument in your favor.
a negotiating protip
Ancillary costs are important to consider, not only when you're trying to get financing to buy a property but also when you're negotiating with the seller for a better price. The real estate transfer tax, notary fees, and real estate agent's fees can quickly add up to 10% of the purchase price, which you have to pay on top of the purchase price itself. Here's a tip from us: you don't have to pay for everything that comes with the house. How so?
The basic rule goes like this:
Anything permanently attached to an apartment, house, or property goes into the purchase price; anything that isn't doesn't. Fitted kitchens and other fixtures can be subtracted.
This nifty rule makes it possible to lower the asking price as well as your ancillary costs. Pretty smart, right? If you want to speak to someone experienced about this, head on over to the Urbyo community to talk with other buyers.
Negotiating the asking price:
where the rubber meets the road
Have you looked over all the documentation for the property you want to buy and made a list of helpful facts? Good job. Now you're ready to move on to the spicy part.
If you've already got a knack for negotiating: great! Then all you need to do is pick up the phone and do it.
But if the thought of hitting resistance from the seller makes you uncomfortable, it's best to arrange a meeting with them, so neither of you feel pressured or taken by surprise. Whether you get together in person, online, or over the phone doesn't really matter. The more important thing is to stick to the facts and to be understanding and fair.
Finding the right real estate offer is even easier on Urbyo. Each listed property has been thoroughly reviewed, including the asking price. But that's doesn't mean you can't still make a counteroffer. All it takes is one click, and you're done. If the seller accepts your offer, then you'll be getting an even better deal than before.