If you’re in the market to buy a home, sooner or later you will be faced with the daunting task of negotiating the final terms of a deal. It is common knowledge that a seller’s goal is to walk away with the biggest profit possible while a buyer aims to pay as little as possible; this is where negotiations become crucial. Recognize that negotiation strategies are different than negotiation style. Some people will deliver their demands using a tough, pit-bull style while others will take a softer approach. Either way, it’s important that you understand the rules of the game when you’re ready to buy your home. Below are strategies and mind sets that will help propel you to a great deal.
Knowledge is Power
Find out as much as you can about the seller. What is motivating them to sell, and what are their needs? Use this information to your advantage. For example, if timing is important to them be as flexible as possible on that issue so you can fulfill your needs on another issue. And beware of handing out your own personal motivators as you can be certain the sellers are trying to do the same thing to you.
Don’t Wear Your Heart on Your Sleeve
Do you remember learning to hide your excitement when car shopping? No matter how much you wanted that car, you shouldn’t let on to the dealer? The same applies to real estate. Don’t allow a seller to know how badly you want their property. In fact, it may be wise to keep your level of enthusiasm from your own agent as well. While your agent would never deliberately “sell you out,” sometimes things just slip out accidently or the conversation overtones can shift inadvertently. Be honest about your feelings, but remain guarded. It may serve you well to adhere to the mantra “he who cares least wins.”
Negotiating is quite simply a game of leverage. The party with the biggest advantage will likely be the most victorious. But remember that when you’re buying a home, agreeing upon the sales price is only the first round in a series of other negotiations (think appraisals, home inspections, etc.). Maintaining an advantage in subsequent rounds of negotiations will help you win the war.
Negotiations will break down very quickly if one party is being unreasonable with their requests. Be realistic; nobody is going to get every single thing they want. Successful negotiations occur when both sides “give and take” proportionately. Both parties should walk away from the closing table feeling good about the deal. Both buyer and seller should feel as though they received as much of what they wanted as they could get.
Be Willing to Walk Away
This is the single most powerful stance when negotiating. If you have reached your spending limit and have no further room to negotiate but the seller wants to continue bargaining, simply tell your agent that you are prepared to walk away.
There’s no need to declare “this is my final offer” since that can be offensive to the seller. If the seller presents you with a counter offer that pushes you past your limit, just go back to them with the same offer you presented previously.
Explain in a friendly way that this offer is the very best you can do, and let them know you’re hopeful that they will reconsider. If not, it’s time to walk away. Tell your agent you’re ready to walk and they will quickly communicate that to the seller’s agent; it might just be the motivation the seller’s need.
This story was written by Monte Mohr, who has sold over 2,500 homes, making him one of America’s top Realtors for the last 25 years. This experience has given him a unique perspective on the Nashville real estate market where he can be found at http://www.tennesseedreamhomes.com. He is also a regular contributor of real estate advice to Nashville’s NBC affiliate station, WSMV Channel 4. To learn more about Monte Mohr’s experience as a real estate agent, to get free advice about your biggest real estate challenges or to request an interview, please contact him at Info@TennesseeDreamHomes.com