If you lose the sense of the deal, you can make mistakes, like buying the property at a higher price than its value, or buying a property that does not pay off.
Investing in real estate means trying to make money. It doesn’t mean buying a house because we like it, but because it helps us earn. Hence, you have to think about the deal. It is necessary to look at the conditions of the property, its location, the state of maintenance, etc.
You can focus on some of these questions. Is the property located in the neighborhood where you met your first love? That does not matter. If this property does not offer earning opportunities, it should not be purchased.
Is the property located in a neighborhood you hate? This doesn’t matter either. If the property will earn you money, it can be located in a city or neighborhood you can’t stand for all it’s worth. What remains a fact is that it must be bought.
Investing in Real Estate Means Negotiating
Sometimes, to successfully invest in real estate, it is necessary to sacrifice a little of one’s pride, and even of shame, especially when the time comes to make a purchase proposal and to start negotiating with the seller.
Most real estate agents advise against an aggressive negotiation style. What does it mean? No real estate agent will ever advise you to make a purchase offer that is 50% lower than the seller’s asking price.
However, in some cases, this type of offer can be the winning bid. Anyone who is a good negotiator will understand immediately when he is faced with a salesman who will not be offended by such a low offer. The secret to investing in real estate without ever losing is to invest as little as possible and to earn as much as possible. That also means trying to lower the price as much as you can.
- This rule should only be used when the seller is willing to negotiate from a very low offer. In all other cases, making a proposal for even 70% of the property price means losing the deal.
- However, sometimes, investing in real estate is a bit like gambling, and meeting sellers with a passion for gambling can be easier than it seems.
The Rules of Negotiation
Negotiation has some very simple rules. Never talk about money right away, and never make it clear how much you can really spend. This rule is valid whether you want to invest in real estate or buy a used car.
The price is made by the buyer and the seller, so a buyer who knows how to negotiate well can get a favourable price. Specifically, we are talking about used properties, which you buy directly from the owner. If you try to follow these rules of negotiation with a construction company, the company will have a good laugh, because there is no shortage of buyers for them.
But in the case of private sellers, it is a very different scenario. Learning to negotiate is therefore a must.
To save the most, some recommend offering very low deposits, in the hundreds of dollars. You can give it a try because if the salesperson has a good sense of humour, this is a great way to break the ice and enter the bargain.
But if you have a person in front of you who does not want to joke, but to sell, also negotiate on the price of the deposit. Remember that being good at negotiating also means looking credible, and real estate investments are made with money.
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