The art of negotiating and closing a real estate transaction

 
  • The art of negotiating and closing a real estate transaction


    Away from all the classic negotiation skills such as; don’t play all of your cards, don’t show excitement…etc, here are some really valuable tips on how you should practically carry out your negotiation of property investment:

    Do not conduct a directly confrontational negotiation with the other principle party:

    Your first mission is to carefully and thoughtfully carry out all of the steps required to search, identify and qualify the right real estate investment opportunity. When it comes to negotiating the final terms and heading towards closing the transaction however, you don’t have to negotiate directly with the other party to achieve your desired terms. In fact, whether you are a seller, a landlord, a tenant or a buyer it is always better to negotiate through a professional middle-party, provided that you know how to get the middle party to work toward your best interest. The reason being, when you negotiate directly, you may suffer from one or more of the following:

    • Time to think: Sometimes if you are negotiating with a well-seasoned and experienced party, you might be cornered into deciding on the spot. With a middle party, it is always easier to ask for more time to consider your options.
    • Personal Vs impersonal: Sometimes egos interfere when two financially capable parties meet without having enough background about each other or without having any previous dealings.
    • Test the water: When involving a middle party, you can always derive some hints and clues on the position of the other party and how motivated they are to buy or to sell.
    • Experts know it better: When you hire an experienced middle party to negotiate on your behalf, they are most likely to achieve better results as they are more experienced in the field of negotiation. Once you have explained a clear outline of your requirements, the middle party will also give you a good idea on how feasible your demands are and how conducive market conditions are in order for you to achieve them. 
    • Dead-end discussions: When you have a middle party, you must always maintain a certain level of flexibility otherwise it is likely that you will find yourself on a one-way road in a direct confrontation with the other principle party.  

    It is essential to start your real estate search by qualifying the right real estate consultant because not only they will guide you and influence your decision-making processes but they are also the ones who are going to negotiate on your behalf to get you the best deal. To do this, not only should they represent your sole interest in the transaction, but they also need to have enough knowledge and experience in order for them to negotiate the right deal for you. Without compound market knowledge, even the best negotiator may end up signing you up for a less than a worthy deal.

    Top points buyers and sellers must factor during transaction negotiations:

    • Price.
    • Form of payment.
    • Down payment and security deposit.
    • Other related fees.
    • Brokerage commission.
    • Lead time to finalize the transaction.
    • Extension period.
    • Past, current and future asset rights and liabilities.
    • Handover of keys and other access devices  
    • Property status upon finalizing the transaction.
    • Parking spaces
    • Default and compensation clauses for both parties.
    • Legal jurisdiction.  
    • Force majeure.

    If you are investing in an off-plan project, mind the following factors during the negotiation stage of your Sales and Purchase Agreement:

    • Developer escrow account.
    • Annual Service Charges.
    • The date your annual service charges are due.
    • Completion date.
    • Handover date.
    • Property inspection.
    • Schedule of finishing materials. 

    Top points to negotiate as a Landlord:

    • Rental price.
    • Form of payment.
    • Down payment and security deposit.
    • Other related fees.
    • Utility account registration.
    • Preventative maintenance visits.
    • Periodic access to the property.
    • Maintenance.
    • Property Management.
    • Contract renewal.
    • Termination notice.
    • Penalties.
    • Handover of keys and other access devices  
    • Property status upon key handover/move-in form.
    • Parking spaces
    • Legal jurisdiction.  
    • Force majeure.


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