No one wants to lose in any real estate negotiation situation. The buyer would love to buy for as low as possible, whilst the seller would rather sell at the highest possible price he can get.
Feeling comfortable with a real estate transaction is the easiest way to ensure that you have a positive experience, whether it be as buyer or seller.
Knowing what is going on and taking an active role in the proceedings of your real estate transaction will give you the peace of mind necessary to erase some of the worry and doubt inherent to any real estate deal.
With the aforementioned in mind, while it is important to rely on your real estate agent, it is also important to take ownership of the process of either home buying or selling to truly understand what is going on.
The negotiation of your home’s sale is one area where that extra knowledge will not only help you understand the methodology your real estate agent is using to get you the best possible purchase price, but also understand what can be done to turn a real estate negotiation in your favor.
- 1 Be Honest and Fair
- 2 Be Well Prepared for the Real Estate Negotiation
- 3 Be Pleasant and Optimistic
- 4 Negotiate From A Win/Win Perspective
- 5 Learn What The Other Party Needs
- 6 Negotiate in person, rather than on phone.
- 7 Detach Your Emotions in the Negotiation Process
- 8 Play the Extreme Game
- 9 Make The Deal More Attractive
- 10 Conclude Negotiations on a Good Note
Be Honest and Fair
Winning a real estate negotiation doesn’t require you to be mean or manipulative. People should treat others like how they want to be treated, and honesty breeds honesty. Manipulation may win in a real estate negotiation but you risk burning bridges or wreaking your reputation at the end of it.
Be Well Prepared for the Real Estate Negotiation
Preparation is the key to success. The person who is best prepared is the one who gets what he/she wants from a negotiation. To prepare, you need to learn the facts of the situation, gather data and find out what the other party’s wants and needs are. Remember, information is key!
Be Pleasant and Optimistic
Except for few extreme cases where parties can’t come to an agreement, most real estate negotiations end diplomatically with desirable results when parties come with an open mind and many options. The key to obtaining good end results to for both parties is to think of negotiation as a win–win rather than a win–lose process.
Negotiate From A Win/Win Perspective
Many new agents make the mistake of starting every real estate negotiation process as if they are going into battle. Not only will this annoy the listing agent that they will likely need to work with again, but it can actually hurt you (the client’s interests) as well.
Instead, learn how to take issues and focus on solutions, instead of turning everything into an adversarial crisis.
Learn What The Other Party Needs
Learn what the other party needs….not really why they are selling or buying, but what will satisfy them that they have a win-win sale. Ask questions of the agent and praise the good points of the property or the nice character of the buyers if you’ve met them. Put together the best deal so that the closing is smooth and successful.
Negotiate in person, rather than on phone.
We react more to other people’s voice tones and body language, both consciously and subconsciously, than to their spoken words. When using email or texts to negotiate, tones and intentions are not easily understood. Someone may be offended by a typed comment which was truly benign, neutral, or even meant to be funny.
Detach Your Emotions in the Negotiation Process
Even if you desperately need the money (or commission) from this one real estate deal, please don’t act out of reactive fear.
Ironically, the fear of losing the deal can be sensed by others in the room, and, in turn, can push them away. Deal with the facts of the real estate transaction as opposed to the emotions.
Play the Extreme Game
One of the tactics often used in real estate negotiation is to take an extreme position and bargain down from that position, hoping to get the price you really want after offering something extremely low or high to begin with.
There is certainly merit to that stance, but the nuance of the tactic comes in when deciding just how extreme a position can be without scaring off your potential partner in the real estate transaction.
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For example, offering to purchase a 2 bedroom bungalow in Akure for N10 million (under its market price) is not taking an extreme position, it is taking a hyper-extreme position sure to get you laughed at. What you’re shooting for is not a number that is obviously too high but one that will get you to the negotiating table where your real estate agent can work at hammering out a price you can live with.
Although playing the extreme game has the potential to anger or discourage a potential buyer, it could also slow the rate at which you drop your price, netting you a better deal in the end for your piece of real estate.
Make The Deal More Attractive
Finally, think about throwing in tangible benefits that may not be important to you, but sound impressive to your buyer. Perhaps instead of dropping the price of the home by a certain amount, offer to waive a particular fee or offer to pay a particular closing cost. Maybe they want something within the home or want you to replace a particular item.
Use these desires as bargaining chips and sometimes you can save money through offering services over hard cash. This tactic is effective and can sometimes net you benefits in getting a compromise on your terms.
Conclude Negotiations on a Good Note
Before walking out of the room, make sure everyone feels positive about the outcome of the real estate negotiation that have just taken place. Shake hands, thank each side for their participation, and talk about the next positive steps in the process.
No matter what your tactic, implementing these negotiating tips can not only help you net a better deal for your efforts, but also keep both sides of the deal happy at the end of negotiations. Real Estate Negotiation is all about long term relationships and cultivating a good reputation.
If the other side is smiling just as you are too, then that is a sign that the transaction was profitable.
It could only mean one thing; you have perfected the art of real estate negotiation.