The negotiation can be one of the most intimidating aspects of any real estate transaction.
Whether you are buying or selling the property, you want to push to get the best possible deal, but you also don’t want to drive too hard of a bargain and end up losing the prospect.
Great negotiating is often a mix of strategy and gut feeling, and can be very intimidating for someone who doesn’t have much experience. However, if you take a few minutes to review your goals and establish a plan before heading into a negotiation, you are far more likely to come away with a positive result.
Here are some great pointers for negotiating your next real estate deal.
Understand the Situation
Just as you have certain reasons and motivations behind your desired outcome for the transaction, so does the person you are negotiating with. Making an effort to understand exactly what is motivating them can be a huge help in finding where they might be more flexible and where they are not going to budge.
There is no point in holding out for a higher price if the potential buyer simply cannot afford it, but that same buyer might be flexible on other factors that would make the transaction a win for you in other ways.
Do Your Homework
One of the best ways to increase your confidence during a negotiation is to have done a really good job on your homework prior to the negotiation. This means understanding what comparable homes in your neighborhood have recently sold for and having an argument ready for where your home should fall in relation to those comps.
Having concrete examples of similar homes and the prices they have sold for is a great way to use evidence to support your offers, provided that evidence actually does support your arguments.
Focus On Value, Not Asking Price
It is important to remember that the asking price is a completely arbitrary number set by the seller. It does not necessarily have to influence your negotiation efforts in any way.
With that in mind, you should understand that the person you are negotiating with is likely using the asking price as an anchor point. This could be a good or bad thing for you, so make sure you are aware of it.
You should be focusing on what you feel the home is truly worth and using that anchor point to your advantage if possible.
Expect to Compromise
You shouldn’t expect to come out of a negotiation getting everything you ask for. There is going to need to be some level of compromise to get a deal done.
If you are going to have to compromise on some points, you should prepare yourself for what those concessions might be and what type of value you are going to place on them.
Ask Your Agent for Advice
The typical real estate transaction involves two parties that only participate in real estate transactions a few times in their lives. But each of those parties is usually represented by an agent that is involved with these types of transactions on a daily basis.
Your agent has a vast amount of experience with real estate negotiations, so you should establish a game plan going in and then utilize their expertise by asking for their advice throughout the negotiation.
Don’t Haggle Over Pennies
You never want to be accused of tripping over dollars to pick up pennies. That means that you need to be conscious of how strongly your negotiating partners feel about particular issues.
If the only thing holding up the sale of your house is the fact that the buyer wants you to leave the custom living room curtains, you are almost always better off to leave the curtains.
It is impossible to know whether you ever get the best deal possible or not, but with this extra knowledge on your side you will still be in a much better position to get a great deal!