Real Estate Learning resources
February 14, 2025
Factors in Renting your investment property
February 27, 2025Key Considerations
(While experience teaches nuanced strategies beyond textbooks, here are some of the fundamental factors every investor should weigh)
Successful real estate negotiations blend market and legal expertise with tactical flexibility. Most strategies need permissions of buyer / sellers hence please make sure relevant state law is followed
A)Pricing correctly
Offering a price that is anchored with data. May it be CMA or more
- Buyers should determine their maximum price using recent comparable sales and avoid emotional overbidding. Sellers must base asking prices on current market trends rather than sentimental value.
- Using EMD, Cash offers and right combination of compensation and credits the overall offer needs to be considered
B) Escalation Clauses:
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Buyers can automatically increase their bid in competitive situations. Sellers gain guaranteed higher bids but risk capping potential offers.
- What is the seller counter offers and ignores the escalations clause? Will you back off or accept?
C) Counter offers
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Respond to lowball bids with justified adjustments, anchored with data.
- If someone has made an effort in with offer, they would most likely go through your counter offer as well
- Mutual Value exchange - It has to be a give an take, if the counter offer asks for more, negotiate by reciprocating something away.
D) Cash is king
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Cash vs Financing - Cash offers expedite closings and reduce contingencies, often justifying a x% price discount for sellers. Buyers with pre-approval letters demonstrate financial credibility, easing seller concerns
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Seller financing - In niche markets, offering to finance part of the purchase can attract buyers lacking traditional financing. This requires expert drafting !
D) Contingencies
- Strategic tradeoffs!
| Contingency Type | Buyer Strategy | Seller Strategy |
| Home Inspection | Waive to strengthen offers in bidding wars | Accept to avoid post-deal disputes |
| Financial | Keep if uncertain about loan approval | Request proof of pre-approval to filter serious buyers |
| Sale of current residence | Avoid unless necessary; sellers may reject | Allow but retain right to continue marketing |
| HOA / POA Resale Docs | Always read them but also know it does effect some sellers as they know its reason for Buyers to cancel the contract as per law |
Depending on situation, see if you can share HOA docs in advance to read and submit them asap after offer is rattified
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E) Timelines
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Closing dates - Buyers seeking speed might pay a premium, while sellers needing flexibility could lower prices for extended timelines
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Deadlines: Set 24–48-hour counters to maintain momentum and prevent delays.
F) EQ & IQ
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Buyers should avoid overpaying for a “dream home,” and sellers must resist undervaluing reasonable offers
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Strategise: Identify motivations (e.g., a seller relocating for a job may prioritize speed; a buyer planning a family may value move-in readiness) to tailor concessions
G) Communications
- How, what and when you communicate is important aspect of negotiation.
- Information - How much to share and when to share it is key. The reason for selling/buying a house may effect the negotiation skill.
- Cover Letter - A small way to connect with the owners directly since communications are filtered through the agents
- Offers status - Deciding whether to disclose the current status of offers should be an integral part of your negotiation strategy. Consider how much information to reveal based on your expectations for the sale process and the unique dynamics of the property.
Overall
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Anchor Negotiations with verifiable data, not emotions.
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Bundle Concessions - Offer a higher price in exchange for seller-paid closing costs or vice versa
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Stay patient but know that people might move on with other offers
By aligning financial incentives with empathetic communication, both parties can secure favorable terms while building rapport for future transactions
