by:Samra Zulfiqar (zameen.com)
Determining the correct market rate for property often turns out to be an ordeal because very few people make an effort to do so. The rest, assuming that the asking price is higher, try to bring the rate down through bargain. Bargaining on real estate assets often works because property sellers almost always have a higher number in mind when it comes to deciding the selling price. But in order to bargain on rate and bring it down to the figures that match the market rate, determining the prevalent market rate is crucial.
Before you decide on bringing the rates down through bargain, you need to know few things:
The bargainable properties
In this regard, the official rate of property and plot files issued by the developer cannot be challenged because it’s the developer’s discretion to set these rates. The likelihood of property being tagged higher than market rates is often seen with plots, houses, and property files that rest with secondary buyers.
Owner’s right to decide on asking price
It is the property owners’ prerogative to decide on a price tag for his property but it seems more rightful in the case of built units than plots. The potential buyers, in all circumstances, try bargaining according to the market rate. So again, knowing the market rate is crucial.
Fluctuation based on circumstances
The selling price of a property depends a lot on owners’ financial situation or holding power. Someone may sell property out of need, and end up selling it at a far lesser rate than originally decided. The investors on the other hand are more reluctant on bringing the asking price down, essentially because they enjoy the liberty of waiting for the right buyer.
Keeping in mind the above mentioned circumstances, there is always room for the asking price to go down, but only if you know the correct market rate. Let’s find out how you can go about doing that.
Have a look at an FBR notified rate list
The Federal Board of Revenue (FBR) issues rates determining fair market value of property from around 21 cities across the country. These lists assess the fair market rates of property from major areas of these cities. You can compare the asking price of the property with rates mentioned in the list and have an idea about how real the asking price is.
These listings are available online at various domains and you can also find them on FBR’s official website.
Never rely on one agent when it comes to buying property, because the sellers don’t do that either. It has often been seen that several agents are working on a single property for sale in the market. These agents are also in touch with investors who could be interested in it. These potential buyers of course have different numbers in mind, and they offer a quote against the seller’s demand. Again, their quote is usually not fair and the real market rate is somewhere between the investor’s offer and the seller’s asking price.
If you speak to more than one agent about fair market value, your chances of getting a close figure are higher.
Determining bargain percentage
Depending on the selling platform, the seller might have tagged his property at 20% to 30% higher rates. A persistent approach backed with ample market research can help you present your case more logically. When agents mediate a deal, they also council the seller as well as buyer to bring them both to an acceptable rate. If you cannot speak directly with the buyer, you have to patiently present your offer to the agent and increase it at a small percentage to let both seller and the agent know that you are a serious and committed buyer.
Bargaining on property rates is a time-consuming task, and if the seller in not in a hurry, it might even take longer. So be patient!