Hello Investors.
Negotiation is a vital skill in real estate investing.
It can mean the difference between securing a high-return deal and overpaying for a property.
Whether you’re acquiring a distressed property, a luxury home, or a commercial asset.
A strong negotiation tactic will help you save money, maximize profit, and structure favorable deals.
In Nigeria, where factors like government regulations, inflation, and demand-supply imbalances influence prices.
Mastering the art of negotiation is crucial.
For this reason, investors must understand market trends, leverage seller motivations, and structure deals that align with their financial goals.
Here’s a comprehensive guide to help real estate investors in Nigeria negotiate effectively and secure the best possible deals.
Understand the Seller’s Motivation as Investors
Before making an offer, take time to understand why the seller is selling.
Their reason will influence their flexibility on price and terms.
Types of Motivated Sellers
- Distressed Sellers: These sellers may be dealing with financial difficulties, divorce, or debt, making them more willing to accept a lower offer.
- Relocating Sellers: A seller moving abroad for work or education may need a quick sale, allowing room for negotiation.
- Developers and Landlords: Property developers looking to liquidate units quickly may offer discounts for bulk purchases.
- Inherited Property Owners: If a seller has inherited a property they don’t need, they may prioritize a hassle-free sale over maximizing price.
Negotiation Strategy
If that’s the case, you can ask strategic questions such as:
- “Why is the owner selling?”
- “How long has the property been on the market?”
- “Are they in urgent need of cash?”
A seller desperate to sell will be more open to negotiation, giving you leverage to secure a better deal.
Conduct a Market Analysis and Research Comparable Sales
To negotiate effectively, you must know the true market value of the property.
In this case.
Many Nigerian sellers inflate prices, so knowing what similar properties have sold for helps you avoid overpaying.
How to Conduct a Comparative Market Analysis(CMA)
- Look at recent sales:
Find properties of similar size, location, and features that have sold in the last 6-12 months.
You can do this by checking online property platforms.
- Engage local agents:
They often have insider knowledge about market trends and actual selling prices.
- Factor in market conditions:
If the economy is slow, sellers might be more willing to lower their prices.
Negotiation Strategy
If the property is listed at ₦80 million but similar homes have sold for ₦70 million, use this data to justify a lower offer.
Tell the seller, “I’ve seen similar properties in this area selling for ₦70 million.
Based on market data, my offer is ₦68 million.”
This approach makes your offer logical and difficult to reject.
Build a Strong Rapport with the Seller or Agent
Negotiation isn’t just about numbers; it’s about relationships.
Sellers are more likely to accept a lower offer from someone they like and trust.
How to Build Rapport
- Start with small talk
Find common ground(e.g., their background, family, or business).
- Show genuine interest
Compliment their property and ask about its history.
- Be respectful
Avoid aggressive bargaining that may offend them.
Negotiation Strategy
- Frame your offer positively
For example, “I like this property. I’d love to make this work for both of us.
What’s the best you can do?”
A friendly approach increases your chances of getting a flexible deal.
Look for Off-Market Deals
Some of the best real estate deals never make it to public listings.
These are known as off-market deals, and they often come with better pricing and fewer competing buyers.
How to Find Off-Market Deals
- Network with agents like us
We have access to properties that aren’t advertised online.
- Directly approach property owners:
Some owners are open to selling but haven’t officially listed their property.
- Engage real estate investment groups
Many investors share exclusive deals in private communities.
- Talk to property lawyers:
They often handle transactions for distressed sellers.
Negotiation Strategy
Off-market deals allow you to negotiate from a stronger position since there is less competition driving up the price.
Never Reveal Your Maximum Budget
A common mistake investors make is revealing how much they can afford to spend.
This shifts power to the seller, who will resist lowering the price.
Negotiation Strategy
If your budget is ₦50 million, start negotiations at ₦40 million.
If the seller asks about your budget, respond with: “I’m exploring different options. What’s the best price you can offer?”
Keeping your budget vague ensures you don’t overpay.
Make an Initial Offer Below Your Target Price
Sellers typically expect buyers to negotiate.
So always start with a price lower than what you’re willing to pay.
Negotiation Strategy
If the asking price is ₦30 million and your target price is ₦27 million, start with ₦25 million.
This allows you to negotiate upwards while still landing below the asking price.
Use Cash Offers as a Bargaining Tool
Sellers prefer cash transactions because they are faster and more reliable than bank financing.
Negotiation Strategy
Offer a slightly lower price but with immediate cash payment: “I can offer ₦45 million cash today instead of ₦50 million with bank delays.”
This often convinces sellers to accept a discount.
Negotiate Payment Terms, Not Just Price
If the seller won’t lower the price, negotiate favorable payment terms instead.
Options to Negotiate
- Installment payments: Offer to pay in 3-6 months instead of a lump sum.
- Rent-to-own: Pay rent that eventually counts toward ownership.
- Deferred payments: Pay part now and the rest after a specific period.
Negotiation Strategy
Tell the seller, “I can meet your price, but I need a 6-month payment plan.”
This makes it easier to acquire high-value properties.
Highlight Property Flaws to Justify a Lower Price
Use property defects as leverage to negotiate a discount.
What to Look For
- Structural issues(cracks, weak foundations).
- Outdated plumbing or electrical systems.
- Need for renovations.
Negotiation Strategy
Get repair estimates and subtract them from the offer price.
“The house needs ₦5 million in renovations, so I can only offer ₦40 million instead of ₦45 million.”
Create a Sense of Urgency
If a seller feels you’re their best chance at a deal, they’re more likely to accept your offer.
Negotiation Strategy
“I have another deal I’m considering, but I prefer this property.
Can we finalize this today?”
This tactic pressures the seller to act quickly.
Use Multiple Negotiation Channels
Different sellers respond better to different negotiation approaches.
Some prefer face-to-face meetings, while others prefer emails or phone calls.
How to Leverage Different Channels
- Face-to-face meetings: Build trust and read body language.
- Phone calls: Quick and direct for immediate feedback.
- Emails/official letters: Best for corporate sellers or legal documentation.
- Real estate agents: Some sellers prefer negotiations through agents rather than direct interaction.
Negotiation Strategy
If a seller is unresponsive via calls, send a formal email.
If a seller seems reluctant to reduce the price, meet them in person to establish rapport.
Using the right medium can improve your chances of closing a favorable deal.
Consider Bulk Purchases for Discounts
If you’re investing in multiple properties.
You can negotiate a better price by purchasing in bulk.
Benefits of Bulk Buying
- Developers often offer discounts for multiple-unit purchases.
- Buying multiple plots from the same seller can reduce the per-unit price.
- Bulk deals increase your negotiation power since sellers prefer large transactions.
Negotiation Strategy
If a plot costs ₦10 million, negotiate a lower price per plot by buying three or more.
“I’m willing to buy three plots if you reduce the price to ₦8.5 million per plot.”
This works well with estate developers and distressed sellers.
Be Patient – Great Deals Take Time
Desperation weakens your negotiating position.
If a deal doesn’t meet your terms, be ready to walk away.
Patience Tactics
- Monitor the property over time, prices may drop.
- Follow up after some weeks to check if the seller has changed their stance.
- If the property remains unsold, the seller may reconsider your previous offer.
Negotiation Strategy
“I understand your asking price, but I need to explore other options.
Let me know if you’re willing to reconsider my offer later.”
Patience can save you millions in real estate transactions.
Work with a Skilled Real Estate Agent like us or a Negotiator
Having a professional negotiator or experienced real estate agent on your side can significantly improve your deal.
Why a Good Agent like us matter?
- We know market prices and can detect overpriced listings.
- We have experience in structuring creative deals.
- We can negotiate professionally without emotional involvement.
Negotiation Strategy
- Ask your agent to request price reductions based on market data.
- Have them negotiate additional benefits like extended payment terms.
Investors who use skilled negotiators often get better deals than those who negotiate alone.
Include Contingencies in Your Offer
A contingency is a condition that must be met before the sale is finalized.
It protects you from unexpected risks.
Important Contingencies to Include:
- Inspection Contingency: Allows you to withdraw or renegotiate if serious issues are found during the inspection.
- Title Search Contingency: Ensures the property has a clean title and no legal disputes.
- Financing Contingency: If you’re using a mortgage, this clause allows you to back out if your loan isn’t approved.
Negotiation Strategy
“I’m ready to proceed at ₦45 million, but I need a property inspection before finalizing.”
Having contingencies in place prevents costly mistakes.
Research Government Regulations and Taxes
Unexpected government fees and regulations can impact your investment.
Before buying, research the legal requirements for real estate transactions in Nigeria.
Key Areas to Investigate
- Title Documentation: Ensure the property has a proper Certificate of Occupancy(C of O) or Governor’s Consent.
- Land Use Laws: Some lands are designated for specific purposes and may not suit your investment.
- Property Taxes: Lagos, Abuja, and other states have different tax requirements.
- Building Approvals: Ensure there are no demolition risks or zoning issues.
Negotiation Strategy
If a property lacks a valid title, use this as leverage to negotiate a lower price.
“Since the property doesn’t have a C of O, I’ll need to handle the paperwork.
Can we reduce the price by ₦3 million to cover the costs?”
Being well-informed about legal requirements prevents costly disputes later.
Negotiate Additional Perks Beyond Price
If a seller refuses to lower the price, consider negotiating for additional benefits instead.
What You Can Negotiate For
- Furniture & Appliances: Request that items like air conditioners, generators, or kitchen cabinets be included in the sale.
- Agency or Legal Fees: Ask the seller to cover part of the agent’s commission or legal paperwork fees.
- Extended Payment Terms: Request a flexible installment plan.
- Renovations or Repairs: Ask the seller to fix issues before closing the deal.
Negotiation Strategy
“I’m willing to meet your price, but I’d like the generator and furniture to be included.”
“I’ll proceed if you agree to cover 50% of the legal fees.”
This approach can save you significant costs while keeping the seller happy.
Always Have a Backup Plan
The most powerful negotiation tool is your ability to walk away.
Never get emotionally attached to a single deal.
Why You Need Backup Options
- If one deal fails, you won’t feel pressured to accept unfavorable terms.
- It gives you leverage sellers are more willing to negotiate if they know you have alternatives.
- It prevents you from overpaying due to desperation.
Negotiation Strategy
Always have 2-3 properties in mind.
Let the seller know you have other options:
“I’m considering another property, but I’d prefer this one if we can reach a fair agreement.”
This keeps the seller under pressure to close the deal on your terms.