Buying Property Investment: How to Negotiate With Motivated Sellers
Property investors know that making money in the property business entails expertise in buying properties priced below market value. This is because the BMV strategy is the secret to success when buying property investments. It's when you acquire investment properties for prices lower than their real market worth that you earn real profits. But what if the art of purchasing BMV properties and negotiating with sellers for bargains is something you find daunting? Read on and find out how it can be a straightforward task.
Property experts have enjoyed success on account of their negotiating skills and techniques in dealing with motivated sellers for BMV bargains. According to one expert, there are three key areas of negotiating that are extremely crucial in your attempt to reach a deal with a motivated seller: listening, fact finding and problem solving. When communicating with motivated vendors, you put yourself in the business of relieving the sellers of anxiety and coming up with solutions to their problems.
But first, what is a motivated seller? The phrase refers to a homeowner with such a strong purpose to make a deal that he is willing to agree to large discounts just to be able to sell the property and get on with what he needs to do. There are various reasons for motivated selling such as divorce, illness, relocation, or repossession. Motivated sellers have been known to accept offers for 40% or more below market value.
How to deal with motivated sellers
When buying a property investment, you'll want to make sure you profit from every home you put your money in, so you need to obtain a good price. Getting a good price means you have to buy the property cheaply so you can resell it at a higher price. But how do you get the seller to agree to your price? Here are some ways to accomplish it:
* Do research and find out what the seller's reasons for the house sale are. Find out what the seller wants and needs. Likewise, keep in mind to find out if there are other motivating grounds. It's possible that he might have issues outside of pricing such as owner financing or buyer possession.
* Consider making a low offer initially and see how the vendor responds to it. If the seller doesn't make a counter offer, you know the answer already. But if he she asserts a full-price counter bid, he might be open to negotiations. Make sure to counter his counter.
* When negotiating, try to find an instance when the seller is unable to turn down the offering you presented to him for fear that discussions will not result to anything. If you play it right, you'll leave your seller with little choice but to give in to your offer.
* Be sure to mention that there are other properties you're considering. This strategy combined with other techniques often gives you an edge when discussing with motivated sellers.
By using laser-targeted tactics in dealing with motivated and distressed sellers, you can expect negotiations to turn out well. Once you have mastered the skills needed in effective negotiations with motivated sellers, you'll find that buying property investment - particularly BMV properties - will come smoothly.