It doesn’t matter if you are looking to buy or rent a commercial property, a residential property or even a serviced office – there is always room for negotiation when it comes to the price.
Keep in mind that properties do not have set price tags. You can make considerable savings with a little bit of accomplished bargaining.
It is vital to get the opening offer right, as this will play a huge part in shaping the amount you finally pay. Usually, the opening is bid is about 5-10% lower than the asking price, and the two parties take this as an opening point for additional offers and reductions in asking price until an accord is reached.
I tend to go in at 20% less than the asking prices with my offers, but one must be careful how one does this as it can be deemed as frivolous. Be conscious that the asking price is frequently set high in order to promote a higher opening offer than would be given with a lower asking price.
The negotiation will be affected by a variety of factors and you will do better if you take these into account:
How many other people are looking at the same property? If you are the only one, you are in a great negotiating position and the seller is liable to allow a lower price. If there are two or more parties making offers, the seller and their agent will be far harder during negotiations and you may be shrewd to offer the asking price.
How quickly does the seller need to sell? If they need to sell swiftly, they will be more probable to agree to a lower sum than the asking price.
How long has the property been on the market? If the seller is having difficulty selling, they are more apt to accept a lower price. Check whether the asking price has dropped since it went on the market.
What season it is? Demand for commercial property is higher in spring and summer so prices will be a little higher at these times of year.
Your own arrangement will also affect the negotiation. A couple of factors could be to your benefit:
Are you part of a chain of sales? If not, the seller can be more confident that the whole thing will be concluded on time. First time buyers and people who have already sold or exchanged contracts on their own property all have this benefit.
Can you show the seller that you can borrow sufficient money to buy the property? It is a first-rate idea to get a written agreement in principle from a mortgage lender to demonstrate to the seller that you will have an adequate amount of money to pay them. This demonstrates that you are serious about buying and that the process will be able to take place rapidly once you have both agreed on the sale.
Remember, if you don’t think the property is worth as much as is being asked, you can bring this into the negotiations. For instance, if some repair work is essential and you think this ought to bring the price down, you can use this and attempt to convince the seller that the property is overpriced.
And if you can’t get the deal that you want…walk away. There are, as the old saying goes, plenty more fish in the sea.
