Navigating the world of real estate can often seem like a daunting labyrinth of terms, numbers, and decisions. The delicate art of negotiation lies at the heart of many real estate transactions. It's entirely reasonable to propose an offer that is as much as 20% below the sales price of a home. A successful negotiation could be the difference between securing your dream home and walking away disappointed.
Fast facts about real estate negotiation
- Approximately 12% of prospective buyers primarily desire their real estate agents to assist with negotiating prices.
- Of all homebuyers, 44% believed their real estate professionals bettered sales contract terms and enhanced their understanding of search areas.
- Some 95% of buyers asked for a home inspection.
- Following inspection findings in the same study, most home sellers discussed repair issues with potential buyers.
Strategies for effective real estate negotiation
Wait before revealing your hand
It’s essential to listen more and talk less in the negotiation process. Waiting to understand the other party's position before revealing your own can give you an upper hand in real estate negotiations. This approach ensures you're not underestimating or overestimating the value or the other party's needs. When you hold back, you can also gauge the seller's seriousness and flexibility, which is a significant advantage in real estate negotiations. Strategically timing when to reveal your cards can be the difference between mediocre and best deals.
While the purchase price is crucial, sometimes including other items, like appliances or furniture, can be a competitive advantage in real estate negotiation tactics. It's not just about the monetary value of these inclusions but the convenience they offer to potential buyers. For a seller, leaving behind certain items might be more cost-effective than moving or storing them. For the buyer, these extras could mean fewer upfront expenses after moving in. It's about understanding and leveraging the situation to sweeten the deal, making it appealing for both parties.
Employ positive phrasing
The words you choose can make a significant difference. Using affirming language can create a win-win situation, fostering a more collaborative atmosphere at the negotiation table. Instead of using confrontational or aggressive language, choose words that open the door to compromise and mutual understanding. Phrases like "I understand where you're coming from" or "Let's find a solution that works for both of us" can pave the way for smoother negotiations. Remember, it's not just about getting the upper hand but ensuring both parties feel valued and heard.
The power of non-verbal cues
Your facial expressions and body language often communicate more than words. Maintaining a friendly demeanor can set a constructive tone during real estate negotiations. A genuine smile, open posture, and direct eye contact can instill confidence and trust in the other party. Conversely, appearing disinterested, constantly checking your watch, or crossing your arms can come off as standoffish or unengaged. Awareness of these non-verbal signals and ensuring they align with your verbal communication can significantly influence the negotiation’s outcome.
Anchor your offers near market value
Starting with an offer close to the current market value, especially in a seller's market, can put you in a good negotiating position. Always consult a local real estate agent for a better idea of home prices in hot markets. The more you know about the property, the local market, and the seller, the stronger your negotiating power will be.
Prioritize direct communication
While emails are convenient, discussing directly over the phone or meeting in person can eliminate misunderstandings and build rapport with the other party. Moreover, a backup plan can relieve the pressure of making decisive financial decisions on the spot, especially when faced with multiple offers.
Recognize when to walk away
Sometimes, the best deal is the one you don't make. If the terms don't align with your priorities or the seller refuses to budge, it might be time to explore other options.
Elements open for discussion in a real estate transaction
While the price tag on a home can sometimes feel like a firm declaration, it's more of an invitation to bargain. Buyers and sellers go back and forth, trying to find a magic number while negotiating, ideally with the utmost respect and understanding.
Costs associated with closure
The journey's end, the final act — closing the deal often comes with its own set of costs. Yet, this finale can also have its own negotiations. Buyers might gently request sellers to bear a part, or sometimes all, of these costs, especially when the market sings a more favorable tune.
The date of closure
The closing date can be adjusted and fine-tuned. It's essentially a merging of calendars, ensuring both parties find a date that aligns with their timelines.
Repairs to the property
Every home tells a story, and sometimes, chapters of wear and tear surface during home inspections. Here lies another opportunity for negotiation. Buyers can voice their concerns, asking for repairs or a slight adjustment in the final price, ensuring their new story begins on a solid foundation.
The heartbeats of a home are the appliances. The refrigerator's hum and the washing machine's rhythmic spin can become pivotal points in negotiations. Will they stay, setting the stage for the buyer's new life? Or will they go, moving on with the seller's next chapter?
Beyond mere utility, furniture breathes life and personality into a space. Some sellers might offer these cherished pieces as part of the home's story, hoping to ease the transition for buyers. It's not just about convenience but about inheriting memories and stepping into a house ready to embrace its new occupants.
About The Sanderson Group
With a rich tapestry of entrepreneurial experiences and an active involvement in community endeavors, husband and wife duo Heather and Spencer founded The Sanderson Group
. With Heather’s 15 years of agent experience paired with Spencer’s hospitality and leadership background, they’ve crafted an impressive portfolio
that includes single-family homes in Pasadena
and nearby cities. Clients everywhere
testify to Heather and Spencer’s discerning approach to local real estate.
For inquiries on California's real estate landscape, do not hesitate to connect with The Sanderson Group
today.*Header photo courtesy of Shutterstock