You don't get what you deserve - you get what you negotiate for. If youve spent some time on homekeys.net, you probably noticed we generally dont carry a torch for tradition or conventional wisdom. Having said that, the well-worn clich above still holds true, especially in real estate transactions. Many buyers and sellers put in countless hours carefully searching properties or preparing their homes for sale, only to see their sweet deals vanish at the negotiating table. Even if youre not an experienced negotiator, there are steps you can take to improve results whether youre buying or selling property. Negotiation doesnt need to be a confrontational process if you set priorities, plan ahead and stay focused on issues, not personalities. By far the largest expense related to traditional real estate transactions is the agent/brokers' commission, and independent buyers and sellers should take advantage of this fact. Without the overhead of a 5-6 percent commission, both buyer and seller have a little more flexibility to come to an agreement thats acceptable to both parties. Here are some negotiation tips for independent buyers and sellers. Seller negotiating tips: Set realistic priorities before you start. When selling, be sure to outline realistic goals before negotiations begin. If youve decided that you need to sell your home for at least $250,000, expect to have very different negotiations than if your goal is to sell within 30 days. If money is your primary concern, be prepared to turn down some offers as you wait for the right buyer. If time is more important to you than money, be sure to include some flexibility in your asking price. Ultimately, the market sets the price. Set your price too high and your house may sit on the market, becoming less attractive to buyers (some sources estimate a monthly decline of 1.5 percent). Price too low and youve got less room to negotiate and may be leaving money on the table. Homekeys.net Subscribers can quickly obtain an objective estimate of property value using our online valuation tool before listing. Another option is to hire a professional property appraiser prior to listing. You may find the cost of either option to be modest compared to making an expensive mistake in your selling price. Take inventory and take advantage. Typically, property sales include anything thats installed or built in to the home. If youve got appliances, furniture or fixtures youre willing to part with, you may be able to entice prospective buyers by including them in the deal. Would buyers be interested in your BBQ grill or pool equipment? It cant hurt to ask. Buyer negotiating tips: Clean up your credit A great way to strengthen your case as a buyer is to demonstrate excellent credit. The time to check credit is well before negotiations begin so you can square away problems. Many credit issues are not difficult to fix and can be straightened out fairly quickly. Heres how to check your credit. Get pre-approved, not just pre-qualified Pre-approval is another way to flex your buyer muscles because it lets you demonstrate to a prospective seller that your lender is prepared to give you a loan. Many sellers will choose a lower offer from a pre-approved buyer over a higher one from one who hasnt been pre-approved. Pre-approval is free and can prevent that worst-of-all situation where a buyer successfully negotiates the purchase of his or her dream home and then cannot complete the purchase when financing falls through. Get pre-approved today. Look for areas other than price. Even though independent sellers can avoid some or all commission costs, there are still other fees that might apply: property and termite inspections, escrow or attorney's fees, a title search, insurance costs and applicable taxes. Even if sellers dont offer much flexibility on asking price, they may be more willing to make a deal with buyers who offer to share the costs of necessary repairs or transaction expenses. Be prepared to compromise. Approaching negotiations with a confrontational win-at-all-costs attitude is unlikely to yield positive results. Many professionals who teach negotiation skills to executives say a more realistic goal is to find a mutually beneficial solution in which both parties can win. This means being aware that you may have to sacrifice something to reach agreement at some point. In this case, be sure to identify in advance what you will and will not give up to ensure youre happy with the deal in the long term. Back up your offer When offering to buy a property, you dont have to explain how you arrived at a particular dollar amount. But you may fare better in negotiations if you have some objective basis, such as examining comparable sales. If you're a Subscriber, try Homekeys' ValueKey valuation tool for an objective estimate of value. If youve got a substantial down payment that youre ready to put into escrow, nows the time to mention it. All participants in a negotiation should be prepared to walk away from unacceptable terms. You may be reluctant to give up after all the time youve invested in the buying or selling process, but emotionally tense negotiations can sometimes benefit from a cooling-off period. Walking away (or watching the other party walk away) may be uncomfortable, but it is always preferable to accepting terms you cant live with. Finally, remember that theres often value in being direct. Dont be afraid to ask questions to learn more about the other persons concerns and objectives. What do you need from me right now? Whats making you uncomfortable? It seems we are stuck on this particular issue. Can we set it aside for a moment and see if there is somewhere else we can gain agreement? Questions like these can help signal your good faith and may help to restart negotiations that become bogged down in details. |
About Us
