How to Negotiate a Property?

Negotiating

The sale price of a property can be negotiated from 5 to 40% depending on different criteria. Negotiation is a common practice aimed at obtaining the best net selling price. However, between the sale price desired by an owner and the actual purchase price, there is often a difference. Negotiating the purchase price of a home is a crucial step in making your real estate purchase a success.

How much can the sale or financial district nyc apartments for rent or house be lowered by negotiating? What is the margin of negotiation for a home?

Average Negotiating Margin in a Real Estate Sale

Compared to the price initially requested, the sale price can be negotiated by 5 or 40% when signing at the notary.

You have just visited a property. Very interested, you want to make a purchase proposal. However, the sale price claimed does not correspond to the real market value of the district. You will then enter a negotiation phase. This is a crucial phase in the context of a real estate transaction. It is possible to write a letter of intent to purchase to succeed in negotiations.

We hear different advice in real estate on the amount to negotiate. Some advocate a 5% drop in price, others will tell you that a 15% real estate negotiation is normal. Every transaction is different. For some homes, a 2% negotiation is a feat! For others, depending on the type of property, the amount of work and the geographical area, the negotiations can reach a large percentage of negotiation.

Argument for Negotiating the Price of a House or Apartment

The Amount of Work to Be Done

During a visit, it is necessary to identify small imperfections, in particular the walls to be coated and repainted, the baseboards to be repaired, the floor to be redone, etc. Small things that are simple to do and that can lower the selling price. Other elements are easily detectable but they require more substantial investments.

For example, if the property still has a single glazing system, or the electricity is not up to standard, these elements can significantly lower the cost of the accommodation. However, this “inventory” is not necessarily easy to carry out for a novice. A buyer can choose to be accompanied by a craftsman or a mandated real estate broker.

The Result of the Real Estate Diagnostics

The results of the diagnostics also represent a key point for the negotiation of a property. Among the diagnostics, the one allowing to evaluate the energy performance is essential. Indeed, it is he who indicates the capacity of housing to conserve energy to heat and light it. A poor energy performance diagnosis (class E, F or G) means that the property is energy-intensive and most likely poorly insulated. Particular attention to the Carrez Law diagnosis is recommended.

It validates the Loi Carrez area announced by the owner. Since the price per square meter is not negligible, if there were to be a difference, this could constitute a tangible point of negotiation. It is advisable to dwell in addition on the other diagnoses (asbestos, lead, termites).

The Amount of Condominium Fees

They also have a great influence on the selling price of a property. On average, condominium fees for an apartment can reach up to 5% of the price per square meter per month. Condominium fees are often a hindrance for buyers. This element can therefore constitute another lever for lowering the purchase price of an apartment.

Sales Made Around the Property

A good way to get your bearings in relation to the selling prices displayed by the owner is to have knowledge of the real estate market. This allows you to have a trend and to know if the property is located in a good price range. All you have to do is consult the ads on sites like Leboncoin, SeLoger, Explorimmo or PAP. Sites such as Meilleursagents or notary sites also provide information on current market prices.

A Property Sold Rented with a Low Rental Yield

A constraint for you, if the owner has not requested leave from the tenant to sell, then take the latter into account in the negotiation that you are going to conduct. Indeed, it is a brake for those who wish to live in the accommodation as quickly as possible.

Find Out if the Owner is in a Hurry to Sell

Time will be your ally if you find that the seller wants to sell quickly. The fact of being in a hurry conditions the seller to more easily accept a real estate negotiation, provided that it is reasonable. Sometimes the real estate agent shares this information with the buyer, or it can be indicated directly in the real estate ad.

Paying for Housing without taking out Credit

Does your financing capacity allow you to free yourself from a mortgage? Again, this is a positive point that will reassure the seller. The fact of not needing a credit makes it possible to simplify the process of sale where very often, the compromise of sale is not necessary. Representing a guarantee of security for the owner, the buyer can therefore enhance his belonging to this profile by negotiating the price.

Negotiate Agency Fees

The interest of the agency is to sell the house or the apartment; it is therefore possible to put pressure on the agent to lower his fees, fees which, on average, represent 5% of the value of the property, which is not negligible. So consider entering into negotiations to reduce agency fees.

Negotiate by Making an Offer to Buy below the Price

From the moment you have defined the list of arguments to put forward in order to be able to negotiate with the seller, it is time to write an offer to purchase. This can be done in two ways: orally or in writing. A written offer to purchase is therefore required. The latter commits you to the owner once the latter has also accepted it in writing. The next phase is necessarily the authentication before the notary.

On the other hand, in the case where the owner does not agree with the price that you propose to him, then this one can formulate a counter-proposal of purchase offer. He must also put it in writing. You have the possibility to also negotiate the fees of real estate agency. As they are not regulated by law, you have some leeway to be able to negotiate them with the real estate agent. It is not a question of haggling them but perhaps of finding a happy medium between the effort made by the owner and the real estate negotiator.

The FAI selling price is different from the net selling price. Indeed, the FAI sale price is the displayed price that the buyer of the property will pay. On the other hand, the net selling price is the amount that goes to the owner once all costs are deducted (real estate agency for example). Also, if you wish to negotiate with an owner, you do so on the basis of the net selling price, but it is also possible to discuss the overall price including agency fees.

The margin of negotiation of a property varies according to the arguments that we will be able to advance to the seller. Indeed, each sale is unique and has its own characteristics. A buyer who wishes to negotiate a lower price, whether for an apartment or a house, must analyze different aspects. The latter should not hesitate to be enterprising with the seller in order to discuss a reduction in the selling price. A difficult exercise depending on its sensitivity, which however can pay off big.

If oral negotiation has the advantage of saving time, it nevertheless has some negative points. Indeed, in the absence of a written record, the offer has no value and is not binding.

Negotiation with the Online Real Estate Agency

NY Rent Own Sell, the digital real estate agency, supports you in the negotiation of your real estate transaction. The online real estate agency offers you a flat rate of 3%. And this, whatever the nature of the property for sale (house, apartment, bare land, cellar or commercial premises).

Why this difference? See for yourself by comparing a classic agency with a fixed-cost real estate agency. There is no hidden cost. Our team of qualified real estate agents have only one goal: to restore your purchasing power when selling your property without selling fees. We are not talking here about “cheap” real estate agents, but about professionals who are passionate about their job.

The views expressed in this article are those of the authors and do not necessarily reflect the views or policies of The World Financial Review.