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23 March 2016

5 Tips for Home Buying Negotiations

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Your client has found their dream home, it’s priced just right, and they’re in a strong position to complete the real estate transaction. However, when it comes down to making that offer, you and your clients need to be prepared to negotiate if presented with a counteroffer. Follow these five tips to make sure the negotiations go well:

1. Act Fast

As soon as a counteroffer is made, it’s crucial to act as soon as possible. Delays leave room for other buyers to step in, which can result in a bidding war. With other buyers interested, the seller will see that prospects are available who may be willing to pay closer to the asking price. If there is even a hint of a potential bidding war, an increase in possible selling price can occur, or worse, risk of losing the house. So, always act fast.

2. Let the Other Party Go First

However, if you have found yourself in a bidding war with another buyer, it could be beneficial to let them make the first move. Doing so allows you to set the mid-point in the negotiation, which will ensure that your client doesn’t pay more than they have to in order to seal the deal. The other bidder’s offer could also be better than what your intended counter, which could result in a loss of sale. So, if other buyers are placing offers, let them make the first move—and then come back with a counteroffer that surpasses theirs.

3. Start Listening

When it comes to negotiation, people often think the first thing to do is to start talking. However, one of the stronger maneuvers is to simply start listening. Understand the reason for the seller’s counteroffer, and evaluate your clients’ situation and reasoning for the offer they’re willing to send back. As a real estate agent, you can recommend what the next offer should be, but it’s your job to truly listen to your clients’ needs and proceed accordingly.

4. Valuable Information is Key

Whenever you head into negotiations, you want to retain as much valuable information as you can to increase your chances of walking out with a better outcome. Educate yourself on not only the reason of the negotiation but also the party you are negotiating with, as well as their motives. Sometimes, negotiations aren’t always about money. For example, a seller may want to close the sale as soon as possible and could be willing to take a lower price just to ensure that the house sells. In these situations, you have to be ready to make a move faster than other buyers in order to ensure your clients get the house.

5. Always Get the Last Concession

A concession is something the seller gives in the negotiation, whether it’s a price drop, better terms, etc. To ensure your clients get what they want, you always want to have the last concession. This allows you to essentially have the final say on what is provided, as the other party will learn to stop asking for things once they have obtained what they want from the negotiation. As long as the other party continues to counter your request, ask for additional concessions. It’s a direct and authoritative approach, and the seller will eventually “give up” once they have received the basics of what they need.

If a negotiation can end smoothly and quickly without causing too much friction, it’s usually a good one. With these powerful negotiating tips, you can get your client what they want at a price that’s right for them.

One thought on “5 Tips for Home Buying Negotiations

  1. As far as I am concerned and according to my personal experience in the field, the market can be really harsh when it comes to negotiations. The problem is that you are obliged to “believe” in the other party’s word and just trust in them. However, people some times act in bad faith, especially when the profit seems to be tempting. These rules might be simple and for some self-evident, though they are really important to keep in mind. However, being well informed should be on the top of the list, as it keeps you away from false steps, being befooled or misjudging an offer –negotiation is a whole science by itself and professionals in the market have a lot of experience to convert you in a simple marionette. Personally, I choose to make a whole research myself before any step forward. After all you can trust no one but yourself.

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