Let the negotiating game begin!
Buyers and sellers both struggle with negotiation. Many think that because they spend eight hours a day negotiating contracts in their business that they are experts. Wrong! Negotiating the sale of your home is completely different. It is personal. It is your home. There is emotion that does not exist if you are buying or selling products in your workplace. Even the most unemotional people will become emotional when you start talking about the value of their home.
The first thing to consider is your market. Low inventory means buyer’s have to compromise more. High inventory requires seller’s to compromise. How is the home priced compared to the other homes in the same market? It is great to be in a position where the market is on your side.
You have to consider the improvements and if you are willing to pay for them. As a seller you can not expect to get the value invested for personal improvements. The steam room may have been worth a million dollars to you but to buyer it might only be a nice feature that they had never considered.
Another thing to consider is who has the most clout in the process? The seller who has just lost his or her job and must sell immediately or the buyer who has all the time in the world to buy a home. Which one will be the most willing to negotiate.
Make sure you gather as much information about your buyer or seller as possible so that you know how to position yourself in negotiations. If you are represented by a Realtor you can be sure that this is being done for you.
Financing also plays a role in negotiating. What are buyers and sellers position on closing cost? Some loans require seller to pay closing cost or some portion of of it. Have other homes in area paid closing cost? If not, can a buyer expect a seller to negotiate price and closing cost?
Is a seller paying for improvements? Many things factor into the price. Price alone will not reflect the best deal.
What the neighbor thinks, and what your friend at work thinks about the price of a home does not determine the value of the home. It may influence a buyer’s decision to buy or not buy and it may influence the seller’s decision to sell or not to sell but it has no relation to the value of the home.
The best price may not be the best deal. Just because your neighbor sold their home higher than the average market price may not mean they made the most money. They may have spent twice what you have on improvements. They may have agreed to $10,000 decorating allowance and so they may have walked away with much less. Every transaction is different.
When the the buyers agent brings an offer, all the buyer has done is open the door. They have said, “We like your home but the amount we are willing to pay is not what you are asking for the home.” This is the starting point in the negotiating. As a seller, know that the buyer did not send you the offer to insult or to inflict pain. They are simply looking for your bottom line. The first offer is usually asking how low you will go. The National Association or Realtors makes it very clear that your first offer will usually be your best. Try to make it work.
As a buyer how your first offer is structured will set the tone for negotiations. Be careful that your desire to get a great deal does not create a hostile environment for negotiations. Make sure you remember the whole picture. Asking the seller to pay $10,000 in closing cost is asking the seller to negotiate off the price by $10,000.00 . You cannot ask the seller to pay closing cost and drop the price and pay for your new roof, unless the home is priced to accommodate these extras. In the same vein a home that is a super value in the marketplace may not have room to give you all the closing cost and a repair allowance you might want. Make sure you are negotiating with all of these things in mind. If price is most important to you just remember that getting the best price may mean giving up something such as closing cost.
A few years ago I read a great article on negotiating in the real estate world. The statement made was, “Never let the ball land in your court. Never turn your back on a counter or tell the buyer or seller to forget it, we are too far apart." Always search for items you can agree to.
If this is a home you want to buy or you want to sell, then look at what the seller or buyer is telling you with their offer and compromise on one point. For instance the seller counters to the buyer at a price that is higher than buyer wants to pay, but with a closing date the buyer does not like, but could live with. Let the closing date be your response and send the ball to the seller.
The last thing to do is know your agent is on your team. The agent will tell you how the other party sees your offer. Not because they are on their side but because they are trying to help you achieve your goals. I know as a buyer or seller it may appear that the agent is not working for your best interest.
It is difficult to make a buyer/seller aware of why a counter may be very reasonable based on the facts they have. The above is true only if you have hired the agent to represent you in buying or selling a home. You will have more clout in negotiation if the agent knows the area and has the wisdom of past transactions. The agent can also set the tone of negotiations by creating a cordial environment and helping you to see what the other party is thinking. This helps you separate emotion and use the skills you need to achieve your desired result.
I love negotiation and can predict responses based on experience. It is a bridge game and finesse may be required. Be excited and trust your agent with their recommended response.
If you would love to negotiate the buy or sell of your home then start by visting PeachtreeCorners.com and find your dream home.
Open Houses this week include
4031 Grove Hill Court Open House 2 p.m. to 4 p.m. Sunday, Sept. 23
6125 Courtside Drive Open House 2 p.m. to 4 p.m. Sunday, Sept. 23