Negotiate Well! – Buying and Selling Real Estate

Negotiate Well for Your Best Deal

A Real Estate Transaction is a Negotiation!  Every house will sell at the right price.  Sellers want to receive the highest price possible and buyers want to pay the lowest possible price.

Whether you are selling your house or buying a new house, it is good to have an experienced Realtor® with honed negotiating skills in your corner!

A Common Goal:  A successful real estate transaction involves a seller and a buyer both working toward a common goal.

A good Realtor® will represent your interests with skill and will always consider YOUR best interests above all others.    

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Negotiate An Attractive Home Purchase Offer

It’s easy to assume that negotiating is adversarial. You, the buyer, are on one side — the side that wants to buy a property for the lowest price possible. The opposition on the other side is the seller who wants to sell for the highest price possible. You’re locked in a tug of war to see which side will win.

Rather than being adversarial, it is more productive to look at a negotiation as a problem-solving process. You and the seller may have different ideas about what price the property should sell for. However, you’re united in a common goal of consummating a deal. The challenge is to resolve your differences through a process of give and take until you either reach your common goal, or decide to go your separate ways.

Of course, you have to arrive at a mutually agreeable selling price for a sale to go through. Sometimes this will happen quickly; sometimes it’s a drawn-out process that can last over days or even weeks.

HOUSE HUNTING TIP:  Patience can be your ally. Sometimes rushing the process can quicken its demise. In fact, you may be better off waiting before starting the process if you think that the asking price is too high.

For the first time in years, we are in a market where some home sellers — typically those who bought recently — won’t be able to sell their home for a profit. But, they may need to test the market to be sure.  Your real estate agent will prepare a Comparative Market Analysis (CMA) for any house that you are interested in.  The CMA will give you a good sense of an appropriate sale price. 

If a house that you like appears to be overpriced, the best negotiating strategy may be to offer nothing until the sellers are close to reducing their asking price. There can be a benefit to making an offer just before a price reduction is made. If you wait until the price is lowered, you could end up paying a higher price if other buyers suddenly become interested.

In order to make sure you are aware that the sellers are contemplating reducing the price, ask your real estate agent to talk to the sellers’ agent and make sure that the sellers are informed of your interest. Don’t be bashful about the fact that you are interested, but not at the current price. This way, you may receive a call when the sellers decide they’d like to see an offer from you.  (It will be important for your real estate agent to stay in contact with the listing agent. – TB)

When you make an offer and there’s no competition from other buyers, your initial offer price should leave you room to move up in price. But, it should not be so low that it’s insulting to the seller. Otherwise he or she might not respond at all. An offer that’s much lower than the market would give the seller the impression that you can’t afford more, so there’s no point in issuing a counteroffer.

Buyers often think that if they start too high initially, they’ll end up paying too much. Your initial offer price should be good enough to entice the seller into a dialogue. It’s a price to get the ball rolling. From there, you can move up in small increments, if necessary.

Don’t get so caught up in negotiating the price that you overlook other opportunities for consensus building.  Most good negotiations have a sense of fairness about them. During the process of your negotiation, you and your agent should brainstorm all the possible ways that you can accommodate the sellers. (Just a few of the possible accommodations that a seller would find attractive, and which may entice them to accept a lower purchase price, are:  a shorter escrow period, a shortened contingency and / or inspection period, an option to lease back after the close of escrow. – TB)