You don’t get what you deserve - you get what you negotiate for.
Many buyers and sellers put in countless hours carefully searchingproperties or preparing their homes for sale, only to see their sweetdeals vanish at the negotiating table. Even if you’re not anexperienced negotiator, there are steps you can take to improveresults. Negotiation doesn’t need to be a confrontational process ifyou set priorities, plan ahead and stay focused on issues, notpersonalities.
Listing Agent negotiating tips:
- Set realistic priorities before you start.
When listing a home, be sure to outline realistic goals beforenegotiations begin. If the sellers decided that they need to sell theirhome for at least $250,000, expect to have very different negotiationsthan if your goal is to sell within 30 days. If money is the primaryconcern, be prepared to turn down some offers as you wait for the rightbuyer. If time is more important to you than money, be sure to includesome flexibility in the asking price.
- Ultimately, the market sets the price.
Set the price too high and your listing may sit on the market,becoming less attractive to buyers (some sources estimate a monthlydecline of 1.5 percent). Price too low and you’ve got less room tonegotiate and may be leaving money on the table.
- Take inventory and take advantage.
Typically, property sales include anything that’s installed or builtin to the home. Appliances, furniture or fixtures the sellers arewilling to part with, may be able to entice prospective buyers byincluding them in the deal. Would buyers be interested in the BBQ grillor pool equipment? It can’t hurt to ask.
Buyer Agent negotiating tips:- Make sure all potential buyers looking at a home with you are pre-approved, not just pre-qualified
Pre-approval is another way to flex buyer muscles because it letsyour buyers demonstrate to a prospective seller that your lender isprepared to give them a loan. Many sellers will choose a lower offerfrom a pre-approved buyer over a higher one from one who hasn’t beenpre-approved. Pre-approval is free and can prevent that worst-of-allsituation where a buyer successfully negotiates the purchase of his orher dream home and then cannot complete the purchase when financingfalls through.
- Look for areas other than price.
Even if sellers don’t offer much flexibility on asking price, theymay be more willing to make a deal with buyers who offer to share thecosts of necessary repairs or transaction expenses.
- Prepare your buyers to compromise.
Approaching negotiations with a confrontational “win-at-all-costs”attitude is unlikely to yield positive results. A more realistic goalis to find a mutually beneficial solution in which both parties can“win.” Be sure to help your clients identify in advance what they willand will not give up to ensure long term happiness.
All participants in a negotiation should be prepared to walk awayfrom unacceptable terms. You may be reluctant to give up after all thetime you’ve invested in process, but emotionally tense negotiations cansometimes benefit from a cooling-off period.
Finally, remember that there’s often value in being direct. Don’t beafraid to ask questions to learn more about the other person’s concernsand objectives. “What do you need from me right now?” “What’s makingyou uncomfortable?” “It seems we are stuck on this particular issue.Can we set it aside for a moment and see if there is somewhere else wecan gain agreement?” Questions like these can help signal your goodfaith and may help to restart negotiations that become bogged down indetails.