SAVE 700,000 AED USING THESE TACTICS

How to Negotiate like a Pro (my client saved AED 700,000 Property Purchase)

Do you want to make a profit from your property purchase?

Well, the No. 1 rule is to negotiate a lower price when you buy it. Negotiating like a pro isn’t an option, it is an absolute must. Below are a few tips to consider;

Knowledge is power

You’ve heard it said before, so don’t be shy. The main aspects when you’ve identified a property is to seek a decent understanding on historical pricing of that property or comparable pricing of similar properties in the area.

You should also seek transactional data (the price that a property actually sold for), through the Dubai Land Department or your trusted Agent, preferably the last 3 or 6 months.

Please note that the prices of listed properties on property sales portals are not a good indicator as these are generally 15% to 30% higher than the actual closing price.

I would add here, that while knowledge is power, Knowledge Properly Leveraged is Greater Power.

So how did I help my clients save AED 700,000 on their property purchase?

Simple - as their trusted advisor I handled ALL negotiations for them.

While you’ll become a semi-expert with your online search, there will be some variances that your Agent can help you leverage better.

For example in my client’s situation it was critical to know the seller’s situation, i.e. how quickly does he want to close the transaction. How long had the property been on the market? What other offers did the seller receive on this property? Did they accept them or negotiate on them? How many other similar properties are available?

Your experienced tactful Agent can speak to either the Seller (or his representative Agent) and assess this very easily. The Seller (nor his Agent) will disclose such details to you. They consider you the enemy.

The pen is mightier than the sword

This holds true in any negotiation. The spoken word and the verbal offer is not worth the air that carries these words. Any and all offers must be inked.

I can’t emphasize enough and am ashamed to say that this negotiating tactic is not frequently used in the Dubai market; whereas it is standard practice in other developed markets.

All Offers Should be in writing. In my client’s case, I successfully used a document called the “Offer to Purchase” that allows the seller to see a written binding offer in front of them (preferably with an original cheque of a 10% deposit) to underscore seriousness. (The cheque is never handed over and always should remain with the Agent).

You must submit a written offer, and then allow the seller a 2 to 3 day window to make a written counter offer.

In my client’s case, we had several rounds of written offers and counter offers go back and forth. Remember this may take time, sometimes weeks. Your patience will pay off.

Test them to their limits

This is an age old negotiation tactic and one everyone is familiar with, however applying it needs tact and elegance. Remember wringing a cloth and hanging it to dry. Well best practice is once the last drop has been squeezed, you give it one last twist and wring it again to make sure there is no more water left.

Negotiation can be a bit like this, and testing for the last bit is difficult and sensitives can get tested.

Have a professional Advisor guiding you through the process and negotiating on your behalf. He knows how to do it the right way and may have access to the other information that allows him to know if the best bottom price at this particular time in the market has been reached.

I hope the above helps you save money from a few thousand to hundreds of thousands of dirhams (and dollars). As you learn and practice these, you’ll only get better and with every property purchase you’ll save more.

Now, as for how to end with a bang? Well, that's another blog post for another time.

Fahd Dawood 

CEO | FD Global Properties

+971 55 421 8943

Author: “The Intelligent Real Estate Investor”

YouTube: Fahd Dawood