ATLANTA PROPERTY
Negotiating the Purchase of Real Estate ?
The First Question You Should Ask
BY R . J PALANO
I
’ ve been involved in the acquisition of real estate since 1977 when I bought my first house . Since that time , I ’ ve owned and sold thousands of houses , a couple office buildings and apartments . The houses I ’ ve been involved in span over 50 cities and 12 states .
I ’ ve attained this level of personal and financial development due to four things :
1 My never-quit attitude , which is encompassed by a phrase I ’ ve claimed as my own “ Anything worth doing is worth doing to excellence .”
2 The information and knowledge I ’ ve obtained through serious study and more importantly “ hand on ” experience .
3 The courage of my convictions to not just take action , but take massive action . 4 My learned ability to negotiate with homeowners .
The key to negotiation is to only negotiate with the decision maker of the property you are trying to buy . So , the first question prior to negotiation should be : “ Are you the decision maker with a follow up question of who is the owner ?”
In the last six years we ’ ve played the “ highest and best ” games with sellers as most of the sellers were lenders that foreclosed . We all know the game : They would list the house below market value to attract as many offers as possible and then ask for the highest and best . It ’ s still going on but rapidly coming to an end . There were no negotiation skills required as we were all dealing with MLS listings and going through agents , brokers , asset managers , etc .
Today I can see the change coming as we attack the acquisition side of our business , targeting homeowners .
Regardless of where or who you are buying through , you need to know how the person controlling the property fits into the picture . This is the beginning of your negotiation . If it ’ s a realtor , enough said as most couldn ’ t negotiate a cup of coffee at Starbucks . If it ’ s a promoter , which in most cases acts as nothing more than a realtor , ask them what their markup is . I ’ m sure most readers realize that the benchmark commissions in the U . S . for real estate are 3 % listing fee and a 3 % selling fee .
Wouldn ’ t it make sense to ask someone what they are charging you for their service ? Isn ’ t everything in life negotiable ? Think about that . We ’ re all in sales and constantly trying to sell , impress , win over people all our lives . This is a human relation skill applied to everyone we have contact with : think about what you said or did to attract your girlfriend or wife . What about when you applied for a job , bought a car , hired a house painter or bought a house . If you don ’ t have the courage to ask , you ’ ll pay retail or above retail for everything . Whenever possible , negotiate with the person that makes the decisions . You need to know their needs and be able to provide a solution to their needs in order to be successful . Never pay retail for anything .
RESOURCES rjpalano . com
54 AUGUST 2016 SA Real Estate Investor www . reimag . co . za