Negotiations can be a subtle art in real estate, but skilled negotiators can usually find some common ground that satisfies all parties – the so-called “win-win” situation. On the other hand, using the wrong negotiation tactics can sink a deal pretty quickly and make even the most agreeable sellers quickly say no and shut down the process. Negotiations are both an art and a science and there are plenty of opinions on how to best handle them, particularly when it comes to real estate. Here are five of the most common negotiation tactics we see that buyers can resist to avoid killing the sale.
- Lowball offers. Going far below market value when you make an offer damages your credibility as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept and if you’re not even approaching the low end of that range, they won’t even consider the offer. While we encourage our sellers to look at all offers and counter even the lowest of them, sometimes the lowball offers backfire and no amount of change in the offer price will get the sellers back to the negotiating table.
- Incremental negotiations. Don’t continue to go back to the seller with small increases in your offer ($1,000 or less). The constant back-and-forth can grow tiresome and lead the seller to consider other opportunities. This can be especially true in hot market where multiple offers are common – someone is going to step up with a bigger, better offer quickly and you’ll find yourself left holding the bag.
- “Take it or leave it.” Try not to draw a line in the sand with your initial offer. The seller can get defensive and consider other offers if you immediately show that you’re unwilling to budge. Even if it’s true, don’t make a show of it. Remember, a seller spent their life in this home so it often means a lot more to them than just price.
- Nitpicking after inspection. Obviously if a home inspection reveals a major issue, it should be factored into the final sale price. But insisting on a lower price for every minor repair can put negotiations in a stalemate. Whether you’re asking for price concessions or the actual repairs, remember that most people are simply not going to fix everything.
- Asking for more, more, more. Some buyers will request that the sellers throw in add-ons like furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason to feel that they’re doing all of the giving. Give a little to get a little as they say…the more flexibility you show, the more flexible they will become.
image courtesy of rbrwr