The following article about Price Negotiation for Rental Listings is from one of our coaches at Rental Beast University, our online interactive learning platform.
What’s better than finding something you need— the newest electronics from Best Buy, a swimsuit for your big beach vacay, a perfectly stylish back-to-school backpack — at a great price? We all like a good deal, and (some of us) like to haggle to get one. Big purchases are no different. The price put on a home when it goes to market is sometimes not what it’s sold for. Price negotiations are a typical— albeit stressful!— part of home-sales. But, did you know that rental prices can also be negotiated? As a professional representing a qualified, ready-to-rent tenant, it’s important that you make sure your client is getting the best deal possible when they decide to rent. Follow this six step process to on price negotiation for rental listings.
Step 1: Let Your Client Know That Price Negotiation for Rental Listings is Possible
Perhaps an obvious first step, but it’s one that you can’t miss! If your client is humming-and-hawing over an apartment because it’s priced too high, let them know that there might be leeway. As with any interaction that you have with your client, make sure not to promise anything. It’s incorrect, and downright unethical, to make statements along the lines of “you’ll definitely be able to get the apartment,” or “I can certainly lower the price for you.” You know that there are no guarantees in real estate, so don’t let your client believe that there are, either. But, do let them know that price negotiation is something that— if appropriate for the property— you’d be very happy to do in their behalf.
Step 2: Figure Out How if This is An Apartment You Should Negotiate the Price
The second step of any price negotiation for rental listings is figuring out if the price is something that should be—not just can be— negotiated. Ask: how did the landlord get the price they’ve put on the listing? Did they scour the market and look at properties with comparable amenities in comparable neighborhoods? Does it seem like they just pulled something off the top of their head? Think, ultimately, if their price is appropriate for the property they are trying to sell. If the answer seems to be ‘no’, then get ready for some negotiation. Take notes with the specific prices of comp properties, and be ready to take them to the landlord. If you can use some solid facts and figures to explain to a landlord that their price is something that should be negotiated, then you’re probably going to get somewhere.
Step 3: Know If There’s Any Lee-way
Know who which individual will enter conversations about price negotiation for rental listings. If you’re coming to a listing agent, it’ll likely be easier to negotiate. Landlords tend to be stricter on the prices they have established than the agents they use to represent them. Unless, of course, if you’ve worked with this landlord before, and they’ve proved to be amenable to price negotiation.
The ability to negotiate price is one advantage of working with an agent. Of course, the big disadvantage is that you’ll be sharing the price of commission. (Quick reminder that all Rental Beast approved listings are gathered directly from property owners, so they’ll be no-broke attached! )
Think about the specifics of the listings. If the property has been on the market for a while, then the landlord is probably eager to get someone in the unit and paying rent. That means there’s going to be some lee-way. By contrast, if the property has been on the market for only a few days and it’s in an area where properties are getting snatched up quickly, then, understandably, there’s going to be less room for negotiation.
Step 4: Explain Your Thought Process
Remember— always go into the interaction feeling confident. The relationship between a landlord and an agent should be a win-win! They offer shelter; you offer a client ready to rent in their building. Because of your great qualification process, you can offer landlords the most qualified applicants for their opening. Also, because you have excellent knowledge of the real estate market in that area, they’ll appreciate your input on their pricing. Sometimes landlords— especially new landlords who aren’t using any dynamic pricing tool— can price their apartment incorrectly by mistake. Not only have you found them a client ready to rent, but by trying to negotiate a price, you’re alerting them to the fact that they’ve priced their apartment incorrectly. Share your thought process with the landlord. Go over the data you’ve acquired, and explain that you don’t think they’ll be able to find a tenant if they keep the price where they’ve put it.
Step 5: Counter With Something Better
From the research you’ve done on comp properties in the area, and from the conversations that you’ve had with your client, you likely have a number that you think is more appropriate for the listing. Also, talk with your client over ways you can sweeten the deal for the landlord and accept the new number. Will your client be willing to sign a two year lease if the price is reduced by a couple hundred of bucks?
Step 6: Keep Your Client in the Loop
This is a stressful time for your clients. Make sure that you let them know what’s happening and what stage of negotiation their facing.
Figuring out if the price the landlord is asking is fair is part of the due diligence you do on behalf on your client. After all, you want your client in the best rental unit at the best price. To negotiate the best price for a rental listing, you’re using lots of the skills you typically use with your clients— knowledge of the local area, knowledge of comp. prices, and flawless communication skills— just applying them in a different way.
Once you’re set with a correct price, make sure your client is ready to fill out a rental application. MLS services like MRED are using Rental Beast’s Apply Now for a quick, and FCRA secure application process.
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