Do you thrive on a vigorous negotiation? Haggling for the deal brings most people either great pleasure or great pain. And to a significant majority of people, the heat of the negotiation is an uncomfortable and stress-filled process. Typically, American retail has removed the negotiation by setting fixed prices for products and services. One of the last bastions of classic negotiations is the buying and selling of real estate.After observing and engaging in hundreds of residential real estate transactions as a managing and selling broker, I have seen the gamut of strategies, tactics and tools that buyers, sellers and real estate licensees have employed in an effort to “win” the negotiation. Some strategies are unknowingly self-defeating, while others are effective in almost any circumstance.
How To Negotiate like a Broker
After observing and engaging in hundreds of residential real estate transactions as a managing and selling broker, I have seen the gamut of strategies, tactics and tools that buyers, sellers and real estate licensees have employed in an effort to “win” the negotiation. Some strategies are unknowingly self-defeating, while others are effective in almost any circumstance. For example, the whole mindset of win-lose creates a climate of defensiveness and fear. A more successful framework is the win-win mindset. The typical negotiation in real estate begins with a written proposal enumerating the details of the offer from the buyer to the seller. Unfortunately, many negotiations fail to move beyond this first draft. What stalls the negotiation at such an early stage?
For example, the whole mindset of win-lose creates a climate of defensiveness and fear. A more successful framework is the win-win mindset. The typical negotiation in real estate begins with a written proposal enumerating the details of the offer from the buyer to the seller. Unfortunately, many negotiations fail to move beyond this first draft. What stalls the negotiation at such an early stage?From the buyer’s perspective, their greatest fear is that they pay too much or that they end up owning “the money pit.” These fears are reflected in their written offer. They may come to the table with a very low offer price and many cumbersome conditions or contingencies concerning their expectations as to the condition of the home, asking to have the home in like-new condition.
The Homebuyer’s Perspective
From the buyer’s perspective, their greatest fear is that they pay too much or that they end up owning “the money pit.” These fears are reflected in their written offer. They may come to the table with a very low offer price and many cumbersome conditions or contingencies concerning their expectations as to the condition of the home, asking to have the home in like-new condition.
Some sellers will take offense to the lowball price and the suggestion that their home could be in substandard condition. Instead of personalizing the proposal, consider the message behind it. Find ways to give the buyer a “win” while protecting your own interests. It is a relatively small concession for you as the seller to be generous in access and information to the condition of your home. Offer to participate in getting experts on the scene to inspect the elements of concern on the home. Send detailed maintenance records you have kept on systems such as the roof or HVAC to assure them of your care for the home. Consider paying for a home warranty to the buyer’s benefit that offers protection during their first year of ownership. By making this effort to move toward them, you as the seller have stepped toward the buyer and set the groundwork for a productive conversation on price and remaining terms. Your posture for a “win-win” negotiation will move the buyer from the defensive to a more productive stance.
By making this effort to move toward them, you as the seller have stepped toward the buyer and set the groundwork for a productive conversation on price and remaining terms. Your posture for a “win-win” negotiation will move the buyer from the defensive to a more productive stance.