Being 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 must be aware of and consider your emotional and financial situation.
So often, ego, misinformation, or stubbornness unnecessarily cost a sale. In most cases, one or both parties were not willing to consider the concern or objection of the other party. The negotiation process is to examine and agree on each party’s situation. Because both buyer and seller often have decidedly different needs and priorities, the ability to listen, relate, and ask questions to seek alternatives is the best way to create a fair “win-win” agreement between buyer and seller.
Seek To Understand—Then Be Understood
To understand the negotiating process, you should first appreciate the other party’s circumstances and look for ways to bridge the gaps. For example, let’s assume you are a seller, and you need 90 days after closing to move out because the builder still needs to finish your next home. The potential buyer needs to move in the day after closing. Instead of assuming it can’t work, discuss possible options together. There are several options in this situation for both parties. These options may not be free to implement, but you might find a way you can both live with.Get An Agreement With Your Agent—If You Have One
While some agents are accomplished negotiators, many need to catch up in this category. Agents will sometimes have a fixed idea of how to negotiate, which doesn’t include sitting down together. Suppose one agent thinks sitting down is a good idea; the other may not. If you are working with an agent, ask them if they would allow a face-to-face with the other party. As a caveat, remember that the common industry practice is to keep the buyer and seller apart.Point-Counterpoint
Here is an insightful look at what the buyer and seller are thinking when they first meet.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?
- Is the house worth what they are asking?
- Should I act firm or noncommittal about my offer?
- How can I start lower than asking but not so low as to upset them?
- Will my financing contingency, or occupancy needs, affect my ability to negotiate?
- When should I introduce issues that affect value?
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?
- Is their offer fair?
- 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 “undersell” my home?
- Can they acquire financing?
- Do they have enough earnest money?
- How urgent is the time of occupancy to me?
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