December 28, 2011
On either side of a transaction, the home buyers or sellers may find themselves facing a more experienced or knowledgeable negotiator. While buyers and sellers can turn to their real estate agent for help, understanding how real estate negotiations work can make it easier to understand and accept advice that may run counter to their own instincts.
Ultimately, the buyer or seller who is unwilling to walk away from a deal is
likely to find himself or herself giving up more than intended in order to close. When entering negotiations from either side, committing at the beginning commonly results in inferior terms.
Experts note one common strategy negotiators use is to come to an agreement, then inform the other party they have to allow someone else to examine the agreement before finalizing it or making it official. This individual might be a professional, a spouse or family member, a friend or any trusted advisor.
Used sincerely, this can be a sign of caution. It can also be employed, however, as an excuse for returning to the negotiation table and requiring one more concession to make the deal go through. By waiting until there is an agreement and indicating it is near being finalized, the tactic can cause the other side to commit fully to the deal and possibly give up more.
According to experts, the only way to prevent this strategy from being used successfully is to stand firmly by the deal as agreed to. Politely declining to give up any more may secure the deal. If not, then the home buyer or seller must consider how valuable the agreement, and the concession, are. Experts note it may be possible to preempt this strategy by inquiring at the beginning if all parties who need to agree to the deal are present.
Preparing for negotiation
When deciding on a negotiating position, home buyers and sellers should go into the process knowing what is important to them and having those items prioritized. Price is an obvious concern, but repair issues, the timing of the closing and other factors may vary in importance for different individuals and households. Experts note it can be difficult for home buyers and sellers to stay objective.
They note that, while the property in question is a home, the transaction is still a business deal. As a result, home buyers and sellers will likely see better results and have better experiences if they do not take low offers, high asking prices and other interactions too personally.