You don’t get what you deserve – you get what you negotiate for.
Many buyers and sellers put in countless hours carefully searching properties or preparing their homes for sale, only to see their sweet deals vanish at the negotiating table. Even if you’re not an experienced negotiator, there are steps you can take to improve results. Negotiation doesn’t need to be a confrontational process if you set priorities, plan ahead and stay focused on issues, not personalities.
Listing Agent negotiating tips:
- Set realistic priorities before you start.
- Ultimately, the market sets the price.
- Take inventory and take advantage.
When listing a home, be sure to outline realistic goals before negotiations begin. If the sellers decided that they need to sell their home for at least $250,000, expect to have very different negotiations than if your goal is to sell within 30 days. If money is the primary concern, be prepared to turn down some offers as you wait for the right buyer. If time is more important to you than money, be sure to include some flexibility in the asking price.
Set the price too high and your listing may sit on the market, becoming less attractive to buyers (some sources estimate a monthly decline of 1.5 percent). Price too low and you’ve got less room to negotiate and may be leaving money on the table.
Typically, property sales include anything that’s installed or built in to the home. Appliances, furniture or fixtures the sellers are willing to part with, may be able to entice prospective buyers by including them in the deal. Would buyers be interested in the BBQ grill or 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
- Look for areas other than price.
- Prepare your buyers to compromise.
Pre-approval is another way to flex buyer muscles because it lets your buyers demonstrate to a prospective seller that your lender is prepared to give them a loan. Many sellers will choose a lower offer from a pre-approved buyer over a higher one from one who hasn’t been pre-approved. Pre-approval is free and can prevent that worst-of-all situation where a buyer successfully negotiates the purchase of his or her dream home and then cannot complete the purchase when financing falls through.
Even if sellers don’t offer much flexibility on asking price, they may be more willing to make a deal with buyers who offer to share the costs of necessary repairs or transaction expenses.
Approaching negotiations with a confrontational “win-at-all-costs” attitude is unlikely to yield positive results. A more realistic goal is to find a mutually beneficial solution in which both parties can “win.” Be sure to help your clients identify in advance what they will and will not give up to ensure long term happiness.
All participants in a negotiation should be prepared to walk away from unacceptable terms. You may be reluctant to give up after all the time you’ve invested in process, but emotionally tense negotiations can sometimes benefit from a cooling-off period.
Finally, remember that there’s often value in being direct. Don’t be afraid to ask questions to learn more about the other person’s concerns and objectives. “What do you need from me right now?” “What’s making you 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 we can gain agreement?” Questions like these can help signal your good faith and may help to restart negotiations that become bogged down in details.