Negotiating Counteroffer - Tips to Negotiating Counteroffers For Buyers - REIClub.com

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Negotiating Counteroffers Requires Poise and Patience. Here Are Some Negotiating Counteroffer Tricks for Real Estate Investors...

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Hi, this is Frank Chen with REIClub.com, the only site you need as a real estate investor. Today I've got a quick video on how to negotiate a counter offer.

Many investors will tell you to offer between 50-80% of the listing price, but the issue with that, is every property is different and there are many scenarios where your first offer won't always be accepted.

So what happens when you get counter offered?

Step 1: Be Prepared when Negotiating Counteroffers
- MLS printout - read the remarks, DOM
- Property comps for similar properties being sold in the area - same parameters
- Public Tax Records - Tax Assessment to give you a ballpark comp
- Investigate - owner occupant, investor, investment group, bank owned?
- When was the property last sold? How much? - find this out from your realtor
- Title, mortgage and liens - find out if property is "clean"

Step 2: Establish Your Bottom-Line
- How much can you comfortably offer on this deal, and still make a decent profit?
- Establish your bottom-line so you don't get pushed around and make a poor decision

Step 3: Getting The Price You Want
- Goal: Raise as little as possible, and have the seller come down as much as possible
- Incremental - Each counter needs to be slightly less than the original increase.
EX: 100K first offer, 103K second offer, 105K, Third Offer
- This shows the seller that you may be coming close to your bottom-line

Step 4: The Waiting Game
- You want your seller to feel anxiety and make an impulsive decision
- Don't counter immediately, it shows eagerness and desperation - you lose control
- Take a few hours before submitting your counter - 4-6 hours
- Tell your realtor you need time to think
- Tell your realtor its going to be really hard to reach the price they want
- Tell your realtor you want to start looking for other properties in the area
- Hopefully your realtor will passively convey this message to the seller, which will create pressure

***Understand that the realtor is essentially looking out for their personal interest, their commission. So if they sense weakness from either you or the seller, they will tend to put a bit more pressure on the weaker party to get the sale finalized.

Step 5: Final Offer
- "Is this the best you can do?"
- This is my final offer
- Have the confidence to walk-away - its more powerful than you think

Step 6: Follow-up Offers
- If you are really interested in the property, send a follow-up offer at a slight increase
- It might stir up another phase of negotiation.

Avoid the Following:
- Don't be overly critical on the property to lower the price - may offend or annoy seller
- Don't express your position to anyone, not even your realtor
- Don't low-ball your offers - immediately get rejected - avoid this by researching
- Don't give ultimatums - "if you don't take this offer, you're looking at several months of vacancy"
- Don't get PERSONAL - it's about the house, not about you.

Not all counter offers will be unacceptable. Assess the property of interest, know your margins, and if the numbers are right, whether it is at your price or the sellers, you should make a move on it. It all comes down to the numbers, whose more prepared, but most importantly, who is more patient. Every dollar you negotiate down, is a dollar saved. The best advice I can give you, is don't get discouraged, and don't take anything personal. It's all part of the sales game.

Again, this is Frank Chen with REIClub.com. Please take the time to leave your comments for this video below and please subscribe to our YouTube channel so you'll be automatically notified when we upload more quick video tips for you. Take care and good investing.

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