For a real estate investor, knowing how to talk down a price is an integral part of the profession. Many situations arise where homeowners or agents overvalue a property to such an extent that it can be hard to have a conversation about how much the property is actually worth.
Whether the property is overpriced due to inexperience, a lack of understanding of the market, or simply someone hoping for the best, part of your role as a real estate professional is to help guide negotiations to something reasonable for the people involved. To help, real estate experts from Forbes Real Estate Council discuss their preferred negotiation techniques when dealing with overpriced properties and why these approaches are so successful.
1. Make Your Offer As Appealing As Possible
When my buyer client is making an offer that is (potentially rightfully) significantly off the listing price, I make sure all other terms are completely clean and super strong. This usually gets the seller’s attention and opens a dialogue. – Beverly Serral, Beverly Serral Signatures
2. Use Objective Market Data
Being indignant or haggling over price only serves to put the seller in defensive mode. If comps are carefully chosen and sound arguments are made for their inclusion, it doesn’t need to get emotional. The best way to frame a negotiation is the buyer and seller working together to establish a reasonable value based on third-party, objective market data. – Marc Rutzen, Enodo Inc
3. Play The Long Game
We’ve had success in playing the long game with sellers. The initial offer is always 20-30% less than their target price. We typically back that up with data, but many sellers prefer to bury their heads and wait for the next fool. Every 30 days or so, we check in and remind them we are still there. This approach works well for us, as it allows us to win when we acquire the property. – Nathan Anderson, NAI Heartland