Real Estate Negotiations: How to be on the “Winning” Side
The word “negotiation” itself has such a negative connotation, but it doesn’t have to be that way. It is a stress-ridden part of the buying process, but there are ways to come to a fair agreement without losing your sanity. Think of it instead as mutual compromising. The seller wants to sell and the buyer wants to buy—and both will likely have to compromise on something to get to the closing table.
Of course, the price is usually the biggest part of negotiations. However, there are many other factors in the transaction, such as: financing details, amount of earnest money deposit, length of option period for inspections, repair allowances or repair requests, non real-property that conveys with the sale, closing date, any relevant contingencies, title company choice and closing costs.
Negotiation is often more akin to problem solving, but if you don’t know the problem, it will be much harder to find the solution. Each side has priorities that are important to them. What is their main concern? Is it price? Is it time? Is it an 8-tier chandelier? The most important thing to them may not even matter to you at all! A little communication can go a long way.
Understanding the motivation behind any requests can often open a successful dialogue, which leads to a solution that is great for all parties. Sometimes, other issues are as important as price—and time is often one of them. For example: Mr. Bob is selling his home to move out of state and needs a quick sale so he can purchase a new home in the new city. Time is a major factor for this seller and he may prefer to accept a lower priced offer with a 2 week closing vs. a full price offer with a 45-60 day close date. Another example: Mrs. Buyer is currently renting a house but has to move out of her rental 25 days before she can close on the house she is buying. Mrs. Buyer may be willing to pay a higher purchase price if she can take possession of the property before closing because it will save her extra moving/storage fees and oodles of stress. As you can see, the life situations of both parties absolutely play a large role in real estate negotiations.
Every situation is different. Be open minded—the best solution will work out where everyone is happy, if you are open to a bit of give and take. Yes, negotiations are inherently adversarial and it is easy to get caught up in the flurry of it all. Don’t lose sight of the end goal by majoring in minors and letting emotions make the decisions—look at the big picture. If no deal is struck, then everyone loses. A “win-win” negotiation is when each side is satisfied with the terms and each side will likely have to give a little to get their higher priority items. Everyone has the same goal in mind, no matter what side of the deal. The only time you’ll “win” a negotiation is when the other party wins too.
Lisa E. Priest can’t seem to turn the A/C on high enough and is a Texas REALTOR® with Picket Fence Realty, Inc. You can reach her via phone or text at 903-948-3343 or read more at BuyPalestine.com.