Tactics and Strategies Can Make or Break a Home Purchase/Sale
In a perfect world, real estate closings would occur over night, sellers would keep every promise made, and both buyers and sellers would negotiate openly and fairly. Unfortunately, welcome to the real world where buyers whittle at the purchase price, closings are postponed, and both sets of players use negotiating gambits to win advantage.
No matter which side of the transaction you’re on, it’s vital to learn to identify various negotiating techniques and their respective antidotes to achieve a win/win real estate transaction.
Negotiating Tactic #1 – Nickel and Diming
As the seller, it’s not necessarily price but net proceeds that you should focus on. Some lower-price sales can actually put more money in your pocket than a higher offer that asks for various terms and conditions that you are not prepared to deliver. As the buyer, remember that everything is give and take; and in tough seller markets, you stand to lose the property to a higher offer if you play the nickel-and-dime game too long. If you really want the property (and can financially afford it) play the cheap card in moderation and give the seller a fair offer.
Negotiating Tactic # 2 – The Stall
This gambit occurs when a party wants time before making a decision (often on a counter offer) and/or wants to sway the direction of the sale.
If you’re working through a real estate agent, he/she will probably try to present the offer to both spouses simultaneously. If you’re working alone as a for-sale-by-owner, make the appointment to present for a time when both spouses are present. If only one of the parties shows up, ask if joint consensus is needed to make the final decision or if he/she is empowered to speak for both parties. Get signatures on all paperwork as soon as possible.
Negotiating Strategy #3 – Higher Authority
One or both of the players must defer to a third party for answers and/or approval. The higher authority could be a lender, an appraiser, a relative, or even a boss.
If you’re making an offer that requires a response, set short time frames for the other party to respond back unless unreasonable (i.e. out of town buyer). Communicating to the buyer that you know he/she is capable of making sound decisions, with or without a third party, will quickly tell you if a higher authority is needed. If so, consider it a necessary roadblock with a time frame that you’ll have to deal with.
Negotiating Strategy #4: – Can’t Make a Decision Buyer/Seller
The “Can’t make a decision” is a decision not to make a decision.
Ask the particular party to isolate their concerns about the offer. While you need to build the party’s desire to accept the offer, don’t forget that you have a powerful negotiating tool – revocation of the offer before acceptance. While this may seem like a dire measure, there’s no harm in communicating to the party that you understand this option – This may be just the nudge needed to precipitate a decision.
Negotiating Strategy #5: – Reduce-it-to-the-ridiculous
The idea is to make something you’re negotiating for seem so insignificant, that the other party would appear a fool to say no!
As the seller, turn the table and show the ridiculousness of a buyers comments without insulting them – i.e. equate a sum of money into cost in cents per day to buy the house.
The bottom line is that neither buyer nor seller gets to win all of the marbles; contrarily, no one should lose them all. Identifying negotiating gambits and more importantly, their antidotes, can help you structure a win/win transaction where all parties feel as though they’ve compromised, but won. Good luck with productive and fair negotiating!
For more information contact The Wilson Team or call 613-695-9250
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