Property investments can be a highly effective way to store your wealth as a professional footballer.
Of course, when you’re buying or selling property, you want to get the best price you possibly can. As a buyer, getting a good deal on your purchase can help you maximise your potential profits later down the line.
Meanwhile, when you’re selling property, you’ll no doubt want to make sure that what a buyer is offering is what you’re willing to part with your investment for.
Read on to discover five tips that could help you to successfully negotiate the price you want when buying and selling property investments.
1. Know your market
First and foremost, you need to do your homework and know the market when you’re buying and selling property.
That means being aware of what’s happening more broadly in the property market, as well as what prices are going for locally.
There are plenty of easily accessible sources you can use to do this. For example, the Office for National Statistics has a UK House Price Index that’s updated monthly with the latest changes in average prices in the UK. This can help you gauge what’s going on with property prices throughout the country.
Locally, sites such as Rightmove and Zoopla have search functions that allow you to see what the average price is in specific postcodes.
Armed with this information, you’ll be able to set a reasonable price if you’re selling, or know what a reasonable price is if you’re buying.
2. Find out your buyer or seller’s position
While there are various intermediaries involved in property transactions, such as estate agents and solicitors, the entire process ultimately comes down to what you and your buyer or seller are trying to achieve. So, knowing the other party’s position is key to a successful negotiation.
You need to know their motivations. For example, if you’re buying, why is this person selling? Are they a family looking to move to their next home? If so, do they need a quick sale to keep a sale chain intact?
Or are they a landlord looking to cash in on their investment? In this case, is their priority going to be to try and squeeze you for the highest price possible? This information will be crucial in how you approach discussions.
An effective way to figure out their position is to have them make the first move. As a buyer, you could ask the estate agent to find out the absolute minimum price the seller is willing to accept.
Meanwhile, if you’re the seller, you can set the price and then see what sort of offers buyers are willing to put down before you consider negotiating.
By having them act first while you keep your cards to your chest, you can get a sense of the other side’s position first.
3. Establish a price range
Ideally, the first two steps should help you figure out what would be a reasonable price for the property you’re buying or selling. Using this information, it can then be useful to establish a defined price range with your buyer or seller.
When you’re buying a property, you could set out a price range that you’re willing to negotiate around. In doing so, you can introduce a lower figure and then build up from it, hopefully convincing the seller that the final price you’re offering is better than it could have been.
It can be sensible not to set the upper threshold of this range too far below the asking price, as this might only serve to frustrate the vendor.
As a seller, this is a slightly more delicate balancing act, as you don’t want to give your buyer the impression that you’re willing to go below your asking price.
But, suggesting a range might create the illusion of a discount, convincing them to snap up your property at what they perceive to be a better deal.
Make sure you use the figures you’ve researched to inform this, rather than creating a price range in the dark. Otherwise, you might accidentally create a worse deal for yourself.
4. Be as communicative as you can
Property transactions can be long, drawn-out affairs. While the Post Office reports that the national average is just 15 weeks if there’s no chain, it can easily take six months or more if you’re depending on other transactions to complete, too.
This is why it’s vital to be communicative and stay in touch with your buyer or seller. Respond to their queries promptly and don’t ignore anything they ask.
This will help to build a rapport between you, which in turn can influence their behaviour and the price they’re willing to agree on.
5. Know when to walk away
Sometimes, a deal just isn’t going to work out between you and a buyer or seller. Whether it’s because the relationship has broken down throughout the negotiation, or circumstances have changed and you’re stuck waiting for the other side to act, property sales can fall through at any stage of the process.
At this point, even if you’ve invested money into it, the most sensible thing to do can be to simply walk away.
There’s nothing to be gained from trying to force a sale through when it doesn’t work for you or the other party. If you allow yourself to become emotionally invested, you could end up selling for less or paying more than you wanted to, pursuing an investment that doesn’t really suit you or your needs.
Just as you would in your career after not getting the result you wanted on the pitch, you need to pick yourself up, dust yourself down, and get ready for the next round.
There will be plenty of lessons to take from a failed transaction. Make sure you learn them so you’re even better prepared next time.
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Email firstname.lastname@example.org or call 01204 602909 to find out more.
This blog is for general information only and does not constitute advice. The information is aimed at retail clients only.
Your home may be repossessed if you do not keep up repayments on a mortgage or other loans secured on it.
Buy-to-let (pure) and commercial mortgages are not regulated by the FCA.
Think carefully before securing other debts against your home.