• Skip to primary navigation
  • Skip to main content
  • Skip to primary sidebar

Accessibility Statement

Follow Us on FacebookFollow Us on TwitterFollow Us on InstagramFollow Us on YouTubeRSS Feed

Kimberly Howell Properties

San Antonio Real Estate

office@kimberlyhowell.com
(210) 493-6888
  • Blog
  • About Us
  • Agents
  • Buyers
    • Neighborhoods
    • Relocation Information
  • Sellers
  • Listings
    • Available Rentals
    • Homes for Sale
    • McNair Custom Homes
    • Open Houses
  • Contact
  • Rental SearchHomes for Rent
  • REALTORS®Find an Agent
  • McNair Custom HomesNew Construction
  • Property SearchHomes for Sale
You are here: Home / Archives for negotiation

negotiation

Are Your Negotiations Killing The Sale?

March 11, 2019 by khproperties Leave a Comment

Negotiations

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. Why ask them when you can choose things as per your interest from better providers like Infinity Commercial Furniture for Office furniture Sydney or residential furniture providers. 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

Filed Under: Buying a Home Tagged With: advice, buying a home, negotiation

Real Estate Negotiation – What’s Reasonable and What’s Not?

February 9, 2016 by Dave Taylor Leave a Comment

Real Estate Negotiation

In simplest terms, a real estate negotiation is a discussion that generally takes place between two sides with an issue to resolve. Both sides attempt to use influence and/or leverage to obtain their respective goals, which are often not the same. The nature of these discussions can take on a “win-lose” or a “win-win” approach. According to Saul Alinsky, “…there is an art of how to take and how to give.” Regardless of your political views I think we can all agree, Mr. Alinsky’s notion seems like a good starting point for crafting a strategy on how to negotiate. And just for the record, even William F. Buckley thought Saul Alinsky was highly effective. See, even political polar opposites can find some common ground for agreement! It might be stretching it a tad to say those two figures were ever in total agreement, but total agreement is irrelevant to a successful negotiation. But how is Mr. Alinsky telling us to attempt to optimize outcomes for two sides with conflicts of interest in a real estate negotiation?

One can infer that Mr. Alinsky is telling us that “reciprocation” is an extremely influential motivator. One may further presume from his statement that in order to parley successfully, both sides must find a common ground along with understanding what the other side wants. Once you understand the desire of the other side you can begin to work toward reaching a reasonable solution that both sides can live with – the “win-win” approach. In residential real estate, the common ground involves a person who wants to sell their home and another person who wants to buy the home. The problem – the seller normally wants the best price the market will allow and a buyer normally wants to pay as low a price as possible. All too often, sellers and buyers tend to only focus on their own personal wants and needs. And as Stephen King explains, “I believe the road to hell is paved with adverbs, and I will shout it from the rooftops.” Obviously Mr. King is speaking about using too many adverbs in writing, however, in our case, one adverb, “only,” can derail the sales process and make everybody’s life a living hell. How do we prevent that? Understanding what is reasonable and unreasonable to a seller or buyer in any given situation will go a long way to solving the dilemma! There are typically two main items that come up in any real estate negotiation. The first involves getting a home under contract and the second, and often most difficult, is resolving the option period during which most buyers will inspect the property and look for repairs to be made.

The First Real Estate Negotiation

There is an old saying, “the buyer gets two bites of the apple.” The first bite (negotiation) in a real estate transaction involves a buyer and seller arriving at a reasonable sales price based on the location of the home, the condition of the home from a visual inspection or a Property Condition Assessment, and a review of the Seller’s Disclosure Notice (before an inspector looks at the home); and the terms involved. The written agreement based on these four real estate fundamentals (price, location, condition, and terms) is what we call an executed contract. But is the contract reasonable? Well, it’s reasonable to believe that homes in popular locations, with high quality amenities, and are not in need of any major repairs normally sell for a higher price than similar homes in the same or less popular areas, with standard amenities, or that require some major repair work. It’s also reasonable to believe that terms of a sale like cash and a quick close, where the buyer is not asking for assistance with closing costs, can generally bring a lower sales price. Just as it’s reasonable for a seller to ask for a higher sales price when the buyer is financing the sale with an extended closing date and has requested seller paid closing costs. In the former example, the buyer using cash and a quick close is providing favorable advantages to a seller. Consequently, a seller may be more inclined to give the buyer a more advantageous sales price. In the later example, the seller is assuming some risk by taking his home off the market for an extended period of time while the buyer completes his financing requirements and in addition, they’re also helping with the buyer’s closing costs. Therefore, it’s reasonable for the seller to normally want a higher sales price based on the risk and the seller paid closing costs involved.

Let’s take a look at a basic scenario. If a seller has priced his home in line with the market for $300,000, it’s probably unreasonable for a buyer to expect the seller to accept a sales price of $290,000 based on the buyer being approved for a loan coupled with a request for $8,000 in closing cost assistance. In essence, the buyer is asking the seller to sell his home for $18,000 below market price. That is not a win-win solution. There are many other factors that come into play that may assist the buyer and seller in this example to reach an agreement. If the buyer absolutely needs the closing cost assistance than he should be prepared to go up on sales price. Other terms could be adjusted also. For example, the buyer could pay the seller’s title policy or allow a seller who needs more time to move to remain in the home on a seller’s leaseback. Every situation is different and one size does not fit all. However, these are examples of each side “giving something to get something.” Too often negotiations break down over minor details because one side or both are looking for an “I win – they lose” solution. Just think, how many times have we seen a difference of several thousand dollars lead to a transaction’s failure? As a general rule of thumb, when a buyer is financing a purchase, each $1,000 financed will cost a buyer $6 toward his monthly mortgage payment. So a $2,000 difference in sales prices is around a $12 a month on a monthly mortgage payment. Now let’s jump forward and look at how we resolve the option period and repair negotiations. This is usually referred to as the second bite (negotiation). And it’s usually the more contested of the two negotiations for myriad of reasons.

The Second Real Estate Negotiation

The general purpose of the option period is for the buyer to have the home inspected and, if required, have the seller and buyer renegotiate the price and/or repairs. Remember, initially the buyer and seller based the price of the home on the condition known from a visual inspection and review of the Seller’s Disclosure Notice and any other information delivered by the seller. Therefore, once an inspection has taken place, latent defects not known or disclosed can impact the price. If a buyer is going to have to replace a roof because the current one is not functioning as intended (not known at the time of executing the contract), then the buyer has a reasonable right to come back and ask the seller to remedy the situation. The roofer worcester acknowledges it.  A prudent seller will figure out how best to resolve the roof issue in order to keep the transaction on track to close. Unreasonable sellers fail to consider that if they let the current buyers walk away, the next reasonable buyer will probably ask for the same or similar repairs or resolutions. Tree damaged roof shingles, leaking air conditioner coils, a faulty septic system, a rusted air conditioner drain pan, plumbing leaks, and other items are not going to disappear upon the next buyer’s inspection. It’s very reasonable for a buyer to ask a seller to resolve safety issues as they have a high probability of causing injury. Or to correct water penetration issues that could lead to mold problems. And correct material defects that severely degrade the performance of major systems such as the foundation, roof, heating and cooling system, electrical system, plumbing system, appliances, pools, septic systems, or wells. On the flip side, it’s unreasonable to expect sellers to cure code items in older homes, when those items were not required at the time the home was built. For example don’t send the seller a laundry list of requested repairs for a home built in the 1970s which essentially represents a remodel and code upgrade of the entire home to present day standards. When a buyer chooses to buy an older home, he should know and accept this. Also, if the seller holds out for at or above full price on the sale at the beginning, it’s reasonable for a buyer to expect a seller to be a bit more flexible on the repairs. The buyer will want the house and land packages to be in “full price condition,” which means no major problems. Accordingly, if the buyer has absolutely beat the seller up on price right at the outset, you can’t usually expect to beat the seller up again on repairs and expect the deal to proceed smoothly.

Focus on what is reasonable. Clearly understand what the other side wants and articulate what it is you want. This will most likely lead toward a win-win solution when reasonable people are involved. And above all, remember real estate negotiation isn’t about egos – they only tend to get in the way of the solutions. It’s about finding the best alternative for all involved. There will be times when you simply can’t reach an agreement, but more often than not, you will.

image courtesy of US Mission Geneva

Filed Under: Real Estate Tagged With: real estate, negotiation, contracts, repairs

Multiple Offers on Your Home

March 11, 2013 by khproperties Leave a Comment

Multiples

This past week has been a busy one around the office, with several of our listings facing multiple offer situations. Many of our agents’ buyers were facing them from the other side of the coin. This time of year, real estate activity typically picks up in San Antonio, but this past week seemed to be especially hot. Is this an indication for the year or just a relatively good week? Only time will tell, but let’s talk a bit about multiple offers.

Multiple offers are exactly that, when several buyers make an offer on your home and you’re sitting in front of two or more of them trying to make a decision on how to move forward – counter them, take one, or take none. Anything is possible in this situation, but typically, your agent will advise all of the buyers’ agents that we are in a multiple offer situation and to make their highest and best offers. By asking for highest and best, your real estate agent is signaling to all the other agents that we’re ready to choose one, so you better be sure your client is making the best possible offer for them.

Once the call for highest and best goes out, agents will get with their clients and usually write out a new offer, this one being the best they can possibly do. Once your agent has gathered all of those, they will present you with all the offers and show you which ones have which advantages and disadvantages.

Weighing Multiple Offers

There’s a lot to consider when looking at multiple offers. The first thing is to not pick the offer to accept based solely on price. If you’re selling your home for $150,000 and you have two offers; one for $150,000 and one for $155,000 – seems easy enough right? The higher price is alluring, but it’s the details of the offer that matter most now. Because buyers can ask sellers to pay for different items or ask for closing cost concessions each offer needs to be weighed by the bottom line – which offer is going to give you the most money and accomplish your goals in the time frame you need. A cash offer at a lower bottom line might be ideal for you if you want to move out of your home quicker. These are the nuances that you and your agent will be discussing.

The great thing about multiple offers is that they will often push the price of the home somewhat higher than the original price it was listed at. This is not guaranteed, but it is definitely common. Some sellers will then ask “did we price the home too low” and worry that perhaps they should have set a different listing price. The key here is to remember that the goal was to sell your home for the most possible. Based on your real estate agent’s research into the market a list price was agreed upon. At any given moment however, the market is in flux (both up and down) and the true picture of the market value of a home is what a buyer is willing to pay for it. We must base our pricing on historical trends (recent sales), but buyers can push that price higher or lower if they decide – supply and demand. In the case of multiple offers, you have a high demand for a limited item (there’s only one house). This can push the price higher than its value because of the desire of one buyer over another to get what they want.

image courtesy of Luca Biada

Filed Under: Sell Your Home Tagged With: multiple offers, sell your home, negotiation

Primary Sidebar

Confused About The Housing Market?

Confused About The Housing Market? Lean On Your Realtor

If you’re thinking about buying or selling a home, you probably want to know what’s really happening with home prices, mortgage rates, housing supply, and more. That’s not an easy task considering how … [Read More...] about Confused About The Housing Market? Lean On Your Realtor

Homeownership Is An Investment In Your Future

Homeownership: An Investment In Your Future

There are many people thinking about buying a home, but with everything affecting the economy, some are wondering if it’s a smart decision to buy now or if it makes more sense to wait it out. As Bob Broeksmit, … [Read More...] about Homeownership: An Investment In Your Future

Ready for Homeownership?

What You Need To Know If You’re Ready For Homeownership

If you’re a young adult, you may be thinking about your goals and priorities for the months and years ahead. And if homeownership ranks high on your goal sheet, you’re in good company. Many of your peers are … [Read More...] about What You Need To Know If You’re Ready For Homeownership

Prioritizing Your Wants and Needs

Prioritizing Your Wants And Needs As A Homebuyer

There’s no denying mortgage rates are higher now than they were last year. And if you’re thinking about buying a home, this may be top of mind for you. That’s because those higher rates impact how much it costs … [Read More...] about Prioritizing Your Wants And Needs As A Homebuyer

Winter Selling Checklist

Your Winter Home Selling Checklist

As you get ready to sell your house, add these items to your to-do list. A real estate professional will also provide other helpful tips based on your specific situation. Have questions, let us … [Read More...] about Your Winter Home Selling Checklist

Search Our Site

Real Estate Topics

  • Buying a Home
  • Homeowner Tips
  • KHP News
  • Local Events
  • Local Laws
  • Miscellaneous
  • Mortgages and Financing
  • Open Houses
  • Real Estate
  • Real Estate Market
  • Renters and Landlords
  • San Antonio Places
  • Sell Your Home
  • Technology
Our real estate agents can help you with properties anywhere in Texas. If you need assistance finding agents in other parts of the country, please contact us.

Search Homes

Explore Cities

  • Alamo Heights 36 Listings
  • Bandera 385 Listings
  • Blanco 187 Listings
  • Boerne 712 Listings
  • Bulverde 419 Listings
  • Canyon Lake 465 Listings
  • Castle Hills 22 Listings
  • Castroville 94 Listings
  • Cibolo 376 Listings
  • Comfort 59 Listings
  • Converse 671 Listings
  • Fair Oaks Ranch 54 Listings
  • Floresville 238 Listings
  • Garden Ridge 11 Listings
  • Helotes 147 Listings
  • Hill Country Village 4 Listings
  • La Vernia 172 Listings
  • Lakehills 141 Listings
  • Leon Valley 23 Listings
  • Live Oak 81 Listings
  • Mico 123 Listings
  • New Braunfels 1530 Listings
  • Olmos Park 9 Listings
  • San Antonio 10789 Listings
  • Schertz 295 Listings
  • Seguin 638 Listings
  • Selma 75 Listings
  • Shavano Park 12 Listings
  • Spring Branch 422 Listings
  • Terrell Hills 17 Listings
  • Universal City 93 Listings
  • Windcrest 32 Listings
  • Hollywood Pk 2 Listings

Stay up to date with the latest from Kimberly Howell Properties.

San Antonio real estate and property information provided by Kimberly Howell Properties. Kimberly Howell Properties does not assume any liability or responsibility for the operation or content of any of the linked resources, nor for any of the interpretations, comments, graphics, or opinions contained therein. All information deemed reliable, but not guaranteed.

KJH Properties, Inc. is a licensed real estate brokerage in the State of Texas, Equal Opportunity Employer, and supporter of the Fair Housing Act.

TREC Information About Brokerage Services | TREC Consumer Protection Notice | Privacy Policy

All content © 2009-2023 Kimberly Howell Properties, unless otherwise noted.