by Dian Hymer
You should have a negotiation strategy. It should depend on the how well priced the property is for the market, how long the property has been on the market, and the state of the current real estate market.
In a seller's market, where houses are selling quickly for the list price or more, you may want to start out with your best possible offer. In a slow market, where houses may take months to sell, and there are plenty of houses to choose from, you may want to make a lower offer and negotiate from there toward a mutually acceptable price.
Before you sit down to write up your offer, find out how much interest there is in the property. Your agent should be able to find answers to these questions: Are other buyers considering making offers? Have other offers already been written? Is the house being shown often, or barely at all? If you are making an offer without the threat of a competing offer, you will adopt a very different negotiation strategy than you will if other buyers want the house.
In a slow market, you might bid low initially, and then jump up in price if necessary. If you're trying to buy a listing that's over-priced, the negotiations may take time. You may have to inch along, moving up a little in price with each counteroffer.
First Time Tip: The split-the-difference approach works more often than you would think. This occurs when the buyers and sellers agree on a price that is half way between their last prices.
Successful negotiations usually involve give and take on the part of both parties. The ideal negotiation is when both the buyers and sellers come away feeling like winners. This is called a win-win situation.
It's important to strive for a win-win negotiation. There's a lot of emotion involved in a home sale transaction. And, it 's often hard for sellers to be unbiased and detached when selling something as personal as their home.
You want the sellers to feel good about selling their home to you because you will want their cooperation during the transaction. You may need to have further negotiations with them after the inspections are done. Problems could arise, even after closing. If you have built a good rapport with the sellers, you'll have an easier time working out all the issues related to the sale.
But, you also want to buy the house for the best possible price, and on the most favorable terms. Buyers, like sellers, have a difficult time maintaining a detached demeanor when negotiating a home purchase. This is one reason that so many people use real estate agents to present their offers and negotiate their home purchases. If you don't have an agent, you might consider hiring a real estate attorney to negotiate on your behalf.
Even if you do have an agent or attorney helping you, it's important to keep your ego from interfering with the negotiation process. Decide in advance what you want to accomplish. Determine the top price you can pay for the house. Resolve to walk away from the house if you have to overpay to get it. But, promise yourself that you won't lose out on the house if a minor concession on your part will make the deal work.
The Closing: All elements in the purchase contract are negotiable, not just the price. Use those elements that are less important to you, but which are important to the other party, to bargain for what you want.
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