Negotiating a purchase agreement may be the trickiest aspect of your real estate transaction. Negotiating is not all luck or natural talent. Being successful in the negotiation process encompasses the learned ability to use certain skills and techniques to arrive at a win-win agreement for sides of the agreement.
Most home buyers and home sellers want to arrive at a win-win agreement, but that’s not to say either side would regret getting a bigger “win” than the other. Successful negotiating is more than a matter of luck or natural talent. It also encompasses the learned ability to use certain skills and techniques to bring about those coveted win-win results.
- Be acquainted with transaction costs and who customarily pays for what. Typical costs include fees for broker services, property inspection, termite inspection, appraisal, attorney and title work, transfer taxes and recording fees, escrow services, commitment fees, and tax pro-rations. Who pays for what is a matter of both negotiation and local custom.
- Start with a fair price and a fair offer. There‘s no question that significantly overpricing your home will turn off potential buyers. Likewise, making an offer that’s far lower than the asking price is practically guaranteed to alienate the sellers. Asking and offering prices should be based on recent sales prices of comparable homes.
- Respect and get to know the other side. Understanding your counterpart’s motivation to sell or purchase can help you determine their priorities. If you know what is important to them, you may want to make concessions on those issues, in order to encourage major concessions that are important to you.
- Be prepared to compromise. “Win-win” doesn’t mean that everyone gets everything they want. You need to be able to focus on your top priorities and be prepared to make concession on other items. Don’t let your emotions overrule your better judgment. Splitting the difference is a time-honored and often successful negotiation strategy. Be prepared to meet in the middle.
- Don’t sweat the small stuff. Many negotiations break down over minor details before the major issues have been agreed to. It is the major issues that are going to decide the success or failure of the negotiation. Once the big issues are settled, the little ones seem less urgent and are quickly settled.
- Ask for advice. Your REALTOR® is an experienced negotiator. They’ve seen what works and what doesn’t. Consult your REALTOR® about strategies, win-win compromises and creative alternatives.