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How To Negotiate Your Maximum Allowable Offer With Sellers

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Once you have determined your maximum allowable offer (MAO), it is time to reach out to the seller and make your offer. You can do this with a phone call, email, or in-person. In many cases, in-person is not an option, but if you can make the offer face to face, the process can be much less challenging and time-consuming. But make no mistake about it, this can be a problematic chat to have if the seller has unrealistic expectations.

It is best to ask the seller what he or she feels the property is worth in its current condition. Then really make the person answer. Don’t be too fast at making an offer. The seller’s response will tell you exactly what to expect when you present your number. If they give you a crazy high number, you will know immediately that you need to teach them why your offer is fair.

If they are stating a very low number, be careful. This response could be a trap to see if you are going to low ball the offer. Either way, never stray from your MAO. Most reasonable sellers will be willing to negotiate with you. And these six tips will help you in getting your fair offer accepted.

  • Build a rapport by chatting and being personable. You don’t need to get down to business right away. Ensure that the seller knows that you see him or her as a person and not just a deal to make a few bucks.

  • Find out why the seller is motivated to sell. You know that you are motivated by profit from a business deal. But the seller could have a significant reason for selling this property. And that motivation could have much emotional baggage. Figure out what the seller needs and show how you can help the seller meet that need.

  • Listening more than you speak is essential in any deal and any relationship. And buying a property is no exception. It can be hard not to interrupt and make your point, or explain your reason for the number you offered. But let the seller speak. Be respectful, and wait for your turn. The explain your offer or answer the question in a calm manner and with no emotion. Be professional, even if the seller becomes emotional. For you, this is just a property that you want to buy, but it could be the seller’s long time home and have many memories and a great deal of sentimental value attached to it.

  • In some cases, a seller looks at a real estate investor as a cash cow. And they will demand a higher price because they think that you can afford it. But if you blame a higher authority, you will extricate yourself from this tricky situation. Say that your boss will only allow this offer amount. Or that your partner only agreed to X amount. And remind the seller that this is your best and final offer. This makes you look good for offering the highest amount that you could initially and not low balling.

  • When the seller does not respond to your offer, the best question to ask is, “Is this unreasonable?” In most cases, a seller will not want to appear unreasonable. After all, that feels embarrassing. Most people feel compelled to answer this question by saying no, regardless of what they really believe.

  • In some cases, you need to be ok, walking away. In negotiations, the person who appears the most desperate to negotiate losses. So you need to be willing to walk away if the seller does not accept your MAO and is unwilling to negotiate. If that is the case, you might get a call in a day or two after the seller has time to think about your offer. But if the deal is really something that you have been searching for, and the seller is a tough nut to crack, stick with it. Keep the negotiation process moving for as long as it takes to get the seller to meet you at a number that lets you make a profit. Most sellers will come around to see the real market value of their property and accept a reasonable offer if they need to sell. Once you both agree on a number, it is time to get to work on the terms of the contract and move forward toward closing the deal.


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