Negotiations is a critical aspect of any real estate transaction. If you don’t negotiate well you can leave a lot of money on the table or maybe end up with a bad deal. If you negotiate too hard you may end up being offensive and chase the buyer away (when you are the seller) or lose out on the property (when you are the buyer). Knowing the difference between the two and how best to navigate different personalities of parties on the other side of the aisle is an art form. In the many deals our team has done we have encountered all types of client types and all types of negotiating tactics. What we have learned works best is sticking to the facts and communicating these facts in a way that is very respectful of the other party.
When representing a buyer, we know that price is an important aspect of the deal, but this is only one negotiating point to the contract. There are a number of other negotiable items in the contract, that if handled correctly, can make the offer be viewed more favorably. Sometimes, in a multiple offer situation, sellers will go with an offer that is not the highest price because it offers a free leaseback or a higher option fee. We have seen many multiple offer situations where it was the non-price items that were given a lot of weight when making the final decision on whose offer to accept. That is why as a team we always communicate with the seller’s agent before making an offer to determine what is it that is important to their client.
When representing the seller, we always start off by letting them know that once they go to put their house on the market it is no longer their ‘home’ – it is a house that is an asset they are divesting and should be viewed as such. Secondly, we educate them on the market and expectations so that when an offer does come in we can quickly gauge whether it is a serious buyer or someone just ‘fishing.’ Given our teams’ vast experience with home remodeling, our ability to successfully negotiate repair requests is unmatched. We are able to inform our seller clients not only what is reasonable vs. unreasonable, but approximate costs for items and whether it would be more beneficial to counter by doing the work or offering a dollar concession.
It is amazing the stories we hear from other agents of deals falling apart over minor stuff, such as parties not coming to an agreement on a $1.5 million home because of $5,000. At this point it generally isn’t about the money but more about neither party wanting to let the other get the better of them (or at least that is what they tell themselves).
From our experience in negotiating on 100+ deals, we recommend the following negotiations points:
1) When representing a buyer always find out from the other agent what is important to their client (is it a quick close, sales price, lease-back, etc.). Don’t assume – ask!
2) Never low-ball a new listing that is likely to have multiple offers (if you later revise your price upward it is likely the seller will ignore it because your first offer left a bad taste in their mouth)
3) Never list the seller’s personal furniture as part of the contract unless the seller’s agent has expressly said they are willing to sell it.
4) Focus on the big picture and don’t get hung up in a dispute over something small because of ego (i.e. major on the major and minor on the minor).
5) Be respectful of the other side and understand that they are people too with their own goals and objectives; be persuasive, not condescending.
6) If you are going to make an offer that is low, let that be your main negotiating point and make all the other terms of the contract what is standard in the industry. If you make a low offer and then also make every other term in the contract unfavorable to the seller (e.g. low option fee, long financing contingency, a high dollar home warranty, etc.) you will end up rubbing them in a way that they don’t even want to make a counter to your offer.
Working with an agent with a good reputation sometimes makes all the difference. There are certain agents in the industry that other agents will avoid showing their listings because they don’t want to ‘have to deal with their rude behavior.’ And agents many times will nudge their client towards one offer over the other when the buyer is represented by a well-respective agent, because they know the deal is less likely to fall apart due to unreasonable option period repair requests. One of our main strengths as a team has been our ability to negotiate the best deals for our clients in a way that helps them not only win deals but close them. Evidenced by our 100+ 5-star har.com reviews, our clients have seen first-hand that having a team with expertise in negotiating can make all the difference.
If you are looking to buy or sell and want to the Deveau Realty Team to negotiate for you send us an email to firstname.lastname@example.org.