The art of negotiation
All aspects of a real estate transaction involve negotiation. Depending on your tolerance for the give and take of making a deal, this part of selling or buying property will excite or terrify you. Sure, you could grab top dollar for your home—or you could be talked into a boatload of reasonable-sounding concessions.
Two sides of the same coin
Negotiating comes into play whether you’re buying or selling. If you’re selling, the buyer makes an offer and you accept it or counteroffer. If you make a counteroffer, the buyer can accept it, counter your counteroffer, or restate his original position. On the buying side, you reverse the roles but the process unfolds pretty much the same way.
Don’t forget about the negotiations that may alter the original agreement after an inspection of the property has been done. The buyer may ask the seller to fix everything from a leaky faucet to a termite infestation. Both sides agree on what will or won’t get fixed—or someone walks away.
It’s not personal
Perhaps the most important rule of negotiation is to leave your emotions out of it. Don’t get angry when a buyer presents a low-ball offer for your lovely home. He’s not insulting you, and he doesn’t think your house is a poorly maintained shack. The buyer needs to start the negotiation somewhere. After all, if he doesn’t ask for a price reduction, he’ll never know if he can get it.
On the buying side, don’t get bent out of shape when a seller rejects your offer. You may have determined that you presented a very fair price for the house. Good for you. Try again or move on. It’s not personal.
Not your problem
Keeping emotions out of a deal also means not feeling sorry for the other side. Everyone carries his own burdens. Don’t allow others to dump theirs on you. If the seller rejects your fair offer based on “needing more money for my retirement fund,” ask for a real reason; the negotiations pertain only to the property.
Set your limits
Maybe you do need to fund your retirement with the sale of your house. Just because that’s not relevant to a buyer doesn’t mean it shouldn’t affect what price you choose to accept. Decide what you’re willing to sacrifice—in price and other concessions—in order to make a sale. As a buyer, identify the absolute limit of what you’re willing to pay for the house you want in the neighborhood you want. You can always choose to walk away from negotiations.
Don’t always settle for half
Meeting in the middle doesn’t mean that both parties get a fair deal. If a buyer offered $70,000 for your $100,000 home, you countered with $90,000, and the buyer offered to split the difference at $80,000, would you feel like you both won? Whether you’re buying or selling, don’t allow an extreme offer to affect your counter.
Timing is everything
Do you know if your area is considered a buyer’s or seller’s market? That will greatly influence your negotiating tactics. Buyers shouldn’t rush to raise their price if the seller hasn’t seen an offer in three months. Likewise, sellers won’t want to budge from their asking price if offers from buyers are piling up. Your Realtor can help you analyze the current market, determine what your limits are and identify the buying or selling strategy for you. For more tips on purchasing a home, I invite you to visit TexasRealEstate.com or HAR.com.
For all of your Pearland Real Estate needs, contact Danny Frank or vistit www.danfrankrealty.com
This column was published in the 17Feb08 edition of the Galveston County Daily News.