Three Rules for a Successful Negotiation

When it comes time to buy or sell your house, I always tell my clients to first recognize that it will be an emotional process. It’s virtually impossible to avoid getting caught up in how it all feels—you’re putting a price on your home, which for a lot of people is their emotional center. A home purchase or sale involves one of the most valuable assets in your portfolio!

Throughout the process, it will be increasingly important to stay on track towards your financial goal, and that’s one of my favorite parts of my job: I help my clients stay focused on their needs, and I maintain a level head as we go through the emotional roller coaster together to help guide you.

When entering into the negotiating process, I start my clients with three key pieces of advice:

  1. Be honest about your must-haves. Coming clean about what you want out of a home purchase or sale versus what you need is a lot tougher than it sounds. Spend some time thinking about and talking over what you need out of your next home, and be honest! If you simply must have a hot tub in your next house, put that at the top of your list. If you value square footage more in your next home, or if you have a financial bottom line you must hit when selling your house, identify that at the outset. The important part is that we define your ideal, so that as your agent I know I’m truly representing your best interests.
  2. Stay away from nitpicking. When you’ve found the house that’s almost your dream home, it’s tempting to want to negotiate in all the little things that will make it perfect. While you certainly have the right to ask for concessions, remember not to overdo it. Every seller expects to have to make some home improvements, but every item you choose to bring to negotiations represents losing money for them.

    As a seller, you'll want guidance about how to handle requests from buyers. Sometimes, offers can come in with lender requirements that must be met; other times, we'll need to prioritize in the larger context of the sale. For example, I recently helped a seller rethink his plan to 'save' money by not using a licensed contractor on his home; he was gambling his $210,000 sale on a $3,000 'savings' that could potentially be an issue for future buyers.

    As your agent, I’ll work with you to prioritize your needs, and I’ll steer the negotiations to make sure you understand the offers you make—and receive—meet your goals.
  3. Know your audience, and design your offer (or counter-offer) for them. This is the most important advice I can give you on negotiating. If you’re going to make an offer to buy a house, take a moment to put yourself in the seller’s shoes. Would you feel comfortable receiving an equivalent offer? If you’re asking for a lot, do you feel you’ve made reasonable concessions? Although each party involved is interested in a successful outcome, remember that the whole transaction needs to feel OK to everyone. Make sure to pay attention to the factors that can help strengthen your offer—Is the seller in a hurry? Are the buyers easily discouraged?—and see what you can do to accommodate them without sacrificing your needs.

Many people are uncomfortable with negotiation, and that’s part of why I enjoy helping buyers and sellers; I know what it’s like to go through the turmoil, and being your level-headed advocate throughout is truly satisfying.

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