Home Negotiation tips to close the deal
There is no simple formula for home negotiations. There is no if C happens then you should go to counter F. It’s not that simple. Some of it comes with past experience. Some if it comes with being able to read the opposite party and to read between the lines. This home negotiation tip is for both buyers and sellers. Negotiating the sales price or repairs on a home is so different than many other types of sales negotiation. That is what confuses people. Here in Detroit we have many Tier 1, Tier 2 and 3 negotiators that deal with Ford, GM, and Chrysler. These negotiators are hard nosed and good at what they do, and they wonder why the tactics they use everyday do not work with home sales. In most cases you cannot be a hard nosed negotiator and expect the other party to succumb to your demands or to close the deal.
There are a few reasons why hard nosed negotiations do not work and why some negotiators end up frustrated and not at the closing table. After all the ultimate goal is to get to the closing table.
1.) There are emotions involved. Sellers have an emotional attachment to the house because they have remodeled the home, or raised their children there, or think the house is the greatest in the world even though it needs major updating. Seller’s sometimes have the rose colored glasses on. Buyers are usually less emotional about the house, but they too get emotional sometimes when the negotiations get tough. In car sales, equipment sales, and many other types of sales and sales jobs there is no emotions. It’s about product and price. Not so with all home sales.
2.) In equipment sales or negotiating with the big auto companies both sides want to make the deal work and work hard to come to an agreement. They are negotiating to meet in the middle because there are a limited amount of companies to deal with. There is may be prior relationships between the companies. In house sales that is not always the case. Seller’s usually DO NOT HAVE TO SELL THE HOUSE, nor DO BUYERS HAVE TO BUY. The buyers can move onto the next home, and the sellers can keep turning down offers as long as they want. In equipment sales there are usually only a few companies to choose from. Not in real estate there are always more homes coming to the market. They may not be as nice, or as updated, but there will be more homes coming to the market if you are willing to wait. They can put up the house for sale next year, or wait until spring to buy.
It is the same with sellers. I just heard yesterday about a seller that has turned down 5 offers. After 5 offers you should get an idea of what a buyer is willing to pay for your home. Yet there are some unreasonable sellers that will still want more after multiple offers on their house. The seller just rejected my clients offer that was higher than the previous 4 offers. Sellers and buyers do not have to close the deal. And it is common for buyers or a seller to quit negotiating and walk away from the deal. Sometimes they just don’t care or are unreasonable in their demands and wants. It is common for one party to base their price in reality and the other party in the transaction living in dream land.
So when negotiating on a sales price you want to be the one grounded in reality. You want your agent to look at the recent solds in the neighborhood. That way the agent or you can look at the recent sold prices of comparable homes and be able to give a range of what the home is worth. That is so important whether you are the seller or buyer. Know what the current market value of the home is your priority.
Having the knowledge of the range of what the home is worth gives you a basis of what to offer (if you are the buyer ) or what to accept (if you are the seller). If you are unreasonable in what you want then do not be surprised when the other party stops negotiating or walks away. It is the same way for you. If the other party is unreasonable in their demands then it is smart for you to walk away. The other party has an incentive to close on the home, but they cannot be forced to accept what you think or what you want. Even if you are right on, they may be the unreasonable one. There is nothing you can do about it. Many buyers do not have to buy the one house or the seller does not have to sell. That is the difference in home sales in most cases…. they do not have to. If you are a hard nosed negotiator you may learn the hard way and lose the house. So the key is how bad do you want to buy or sell?
I hope this negotiating tip of understanding the mind set of the opposite party, and what has to be done in the home sales process will help make your home sales negotiation more fruitful. It will save you aggravation if you understand this up front. It does not matter if it is waterfront home for sale in Oakland County or any home in Mesquite, NV. …..realize that many times hard nosed negotiations fail in the real estate business.
The goal should always be to find a win win for both parties.