Negotiation skill is needed when it comes to running real estate business. It is a basic need for running any type of business actually. Thus, you don’t have a choice except learning how to negotiate efficiently and effectively. Negotiation involves different parties. It can be between you and your client, you and our partner, or you and the bank. For the latter, you may need different approach in negotiating. Negotiating with banks is more different than buying from a traditional seller. Aside from using the right strategies, you also need to have great patience and persistence on your side.
How to negotiate with banks effectively
You need to remember that even solid looking deals don’t guarantee of successful negotiation. It has risk of falling apart due to many reasons. Thus, what you have to do is learn to improve so you have better chance in the next negotiation. Here are some useful tips for successful negotiation with banks:
- The first keyword in negotiation is to leave happy for both parties. Give and take is what you need to keep in mind when it comes to negotiation. Different from traditional sellers, you will need more time in giving and taking. Banks are driven from bottom line without having years of history to the property they own. Thus, it is not easy to break their determination. You will have to predetermine purchase number so you know where you stand. You can also offer a quick, cash closing since it what the bank prefer the most.
- It is not over until it’s over. Thus, there will always be space to lurking in and get potential deals with banks. Even last minute can make a difference. The deal is only closed once you sign your name at the closing table. To go through all this, you need to see all process to completion. You have to be organized and keep all pertinent documents so you can easily retrieve them when needed. There is always reason for bank to reconsider a deal.
- Don’t rely on one potential deal. It is highly suggested that you pursue other deals as well. Thus, you still have other options when your current offer falls out. With a full pipeline, it will be easier for you to reboot and recover from the loss. Finding new deals in short time is not easy. It may take months or more. Thus, you need to keep the pipeline full to keep moving forward when one thing doesn’t go your way.
- The most challenging hurdle is communication. Talking to them face to face is a different challenge. The next most challenging hurdle is getting them all of the required items they are asking for. There are many things you should do at once. Besides, there is no rhyme whatsoever for bank to close the deal. Sometimes they just choose based on the highest price or for something else. Thus, you need to focus more on how to get the next deal instead of sulking over the lost one.