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You probably already know some of the secrets of how to make an offer on a home. You offer less than you’re willing to pay, right? That’s the most common negotiation technique. For experienced investors, though, that’s just one technique among many more powerful ones.
How To Make An Offer
1. Offer an odd amount
Offer an odd amount like $161,735. This gives the impression you know something the seller doesn’t. He may think you have a good reason for that particular price.
2. Play dumb and ask questions.
Talk slow, ask for help, and never show off your real estate expertise. Sellers are afraid to budge if they think a smarter person may be taking advantage of them.
3. Use the “limited authority” technique.
Try “I’ll have to check with my wife (or partner).” It’s easier for sellers to accept that you can’t do something, rather than the idea that you won’t.
4. Use precedent.
“My father bought his house this way.” If the offer is unusual, sellers will feel more comfortable knowing it has been done that way before.
5. Ask for things you don’t need.
This lets the seller win concessions when negotiating. If you can later say, “I guess I don’t need the refrigerator, if I can get my price,” you’re more likely to get your price.
6. Try being reluctant.
Say “Well, I don’t know…” This gets the seller looking for ways to motivate you, and lets him feel like he’s won something when you settle the point.
7. Make an offer their idea.
“Are you saying you’d like a later closing, and more earnest money? Well let’s do it your way, then. I just need…”
8. Get yesses before the offer.
“What if I paid your price, but got my terms? Would that work for you?” Even with a few changes, it will be hard for the seller to say no to an offer he more or less already agreed to.
9. Flatter.
Flattery has been proven to be worth an average of $1962 in real estate negotiations. That’s a joke, by the way, but you know if he likes you, you’ll probably get a better deal.
10. Pass over problems, then return to them later.
Agree on every agreeable point first. It will feel like the house is sold then, and it will be difficult for a seller to lose the deal over an issue or two that you need to go in your favor.
You can spend a lot of time looking for cheap houses. Meanwhile, good negotiation skills can make any house cheaper. Why not spend a little time learning the secrets of how to make an offer on a home?
Bill Manassero is the founder/top dog at “The Old Dawg’s REI Network,” a blog, newsletter and podcast for seniors and retirees, that teaches the art of real estate investing. His personal real estate investing goal, which will be chronicled at olddawgsreinetwork.com, is to own/control 1,000 units/doors in the next 6 years. Prior to that, Bill and his family lived in Haiti for 11 years as missionaries serving orphaned, abandoned and at risk children.
