Negotiations Are An Important Key
So many times I have seen ego, misinformation or just downright stubbornness cost a sale unnecessarily. In most cases, one or both of the parties were not willing to consider the concern or objection of the other party.
Many critical concerns will be discussed and decided upon during the real estate negotiation process. Because both buyer and seller often have decidedly different needs and priorities, negotiations can become emotionally frustrating and confusing at times. I want to enlighten you regarding the concept of negotiation in an effort to guide you to a fair “win-win” agreement between buyer and seller.
To be informed is the best tool you can use during negotiations. Knowledge about the home’s condition, the range of value and the many other aspects that affect value will be helpful to your ability to negotiate with confidence. In addition to information regarding the home’s features and value, you need to be aware of and consider your own emotional and financial situation.
Seek To Understand – Then Be Understood
To understand the negotiating process, you should first appreciate the impact of different levels of interest or motivation. Consider how differently you would approach negotiating if you “had to sell” versus “you would sell if you could get the right offer.” These differences, whether large or small, can create a stressful environment for everyone involved. This is when all the effort you have invested to gain critical knowledge about what to learn and what to do up to this point will help guide you through this critical step in the process. This is a point in time when your past work through the steps of the process come to bear.
Get Agreement With Your Agent – if you have one.
A good agent can be a beneficial resource here. But, when no intermediary is involved, two people negotiating directly, instead of four, reduces the chance of miscommunication. While some agents are accomplished negotiators, many agents fall short in this category. The agent can pour more gasoline on the fire by offering inconsequential sidebars to the other agent that are transmitted back to their customer, instead of strictly communicating the facts. In some situations, if you use an agent, it is helpful for you and your agent to agree on the most favorable tactics to present the offer. As just one example, a personal note to the seller accompanying the offer that explains your logic for the offer, or a note from the seller back to the buyer explaining why they reacted as they did. Sometimes these notes help, sometimes not. Also, remember that although there are many styles and personalities which surface, both buyer and seller have the same goal – to protect their best interest. If you choose to send a note be very careful not to violate federal fair housing law.
At this stage of the game, there are many considerations and possible apprehensions that occupy the minds of both buyer and seller. Here is an interesting look at their points of view.
THE BUYER’S INTEREST
• Why are they selling?
• How was the price determined?
• Have they had other offers?
• How long has the home been for sale?
• Will they come down on their price?
• Should I act firm or non-committal about my offer?
• How can I avoid overpaying without starting so low that I am not taken seriously?
• Will my financing contingency, or occupancy needs, affect my ability to negotiate?
• When should I introduce other aspects like poor condition/ slow market/ etc. that affect price?
THE SELLER’S INTEREST
• How serious is their interest?
• How was their offering price determined?
• Have they made other offers?
• How long have they been looking?
• Will they go up on their offer?
• How long should I wait to lower my asking price/ if at all?
• If I get a full price offer within the first week or two, did I “under sell” my home?
• Can they acquire financing?
• Do they have enough earnest money?
• How urgent is the time of occupancy to me?
As you can see, both buyer and seller have similar questions and concerns. The answers to these and many other questions depend upon your individual circumstances. Your best negotiating results will occur if you have chosen a competent broker to help guide you through this emotional time. It is your representative’s job to provide you with accurate, timely information in order to answer all of your questions and to help you understand the other person’s position. We hope you ask yourself these questions and relate them to your particular situation. You will find that the knowledge gained from these answers can help you create a smoother negotiation process and contribute to your success as either a home buyer or seller.
Let’s Settle This
Our advice to you about negotiating is to be informed. If you understand the other party’s position and you have a good sense of the property’s true value, your chance of succeeding greatly improves. Keep in mind, it takes a mutual agreement before the home buying and selling process can be completed.
Our goal is to bring the buyer and seller together in an effort to reach a fair agreement.