Avoiding Sour Negotiations in Real Estate
- Author Dane Smith
- Published October 10, 2007
- Word count 700
Negotiating can be tough. It is more an art of applying techniques to each unique transaction rather than cut and dry responses. With home sales, each home has a person behind it with emotions that can be triggered either positively or negatively. Whether I am the agent for the buying or selling end, I try to advise my clients with facts rather than emotions. I have run into other agents who get quite emotional and defensive about a transaction, and I can understand that inclination because some deals can just become so frustrating, but as the agent, it is best to take a step back and provide professional consultation instead of escalating your client's emotions. These are some negotiating techniques to keep in mind as options rather than letting a negotiation go sour.
- Don't sweat the small stuff.
It is common that people will haggle or get attached to small things like refrigerators. I try to put these things in perspective for my clients. Would you rather convey a $1000 used fridge to these buyers who are ready to move forward with just this one concession, or do you want to put it back on the market and pay more mortgage payments until the next buyer is interested? A lot of times, if you look at the overall picture of how much it will cost to put something back on the market, including mortgage, taxes, and insurance, there will be a breaking point at which the seller understands it is not worth the money. From the buying perspective, if we take the fridge example again, is it really worth the fridge to spend more time looking and spend money on another inspection? Sometimes your client will say that it is worth ending the deal, and in that case, you will represent them as they want, but most people become rational after they get past the initial emotions of "wanting" something. And some clients will even thank you for helping them through the small things.
- Negotiating other issues.
Think creatively. Sales price is not the only issue in a transaction. Closing a couple weeks earlier may be the best for both parties and can be negotiated rather than concentrating only on sales price. One new home buyer offered her home to be on a property tour once a month in exchange for $5000 in closing costs paid by the seller. Basically, understand the other party's situation so that you can try to come up with something that might benefit them as well as who you are representing. That way, you can hopefully turn the negotiations into a win-win situation.
- Offering packages.
As a buyer, don't negotiate one thing at a time. When you present items to be resolved, for example repairs, always do this as a list.h That way, you can trade-off one thing for another. For one, negotiating one thing at a time is a waste of time when everything can be discussed at once. Everyone is busy with their lives, and no one wants to be pestered multiple times about one more repair item. This just makes the seller progressively more irritated and less agreeable to the next thing you ask for. Also, the list format forces the issues to be prioritized, and you can set your boundary of what can be left out and what absolutely must get resolved.
- Dealing with threats.
This does not happen often, but some people will threaten termination as a bargaining technique. I would not advise using this technique, but it is good to know how to deal with it because the typical natural reaction is to tell them to buzz off. One solution is to ignore it and just talk about the strong points of your property or client. You can also re-frame threats to show that it is not in their best interest.
- Knowing when bargaining zones do not overlap.
Sometimes the negotiations are just not going to happen. A buyer and seller are at opposite ends. In this case, rather than continue to make ridiculous demands (or at least seen as ridiculous by the other side) and creating a volatile situation, it is time to end the transaction and move on.
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