Why A Negotiation Strategy Is Necessary
Whenever you step into a deal, you should always have a negotiation strategy ready. Moreover, your strategy should be flexible; it should consider the price of the property, when it was put on the market, and the current situation of the real estate market.
If you're dealing with a seller's market, where houses are sold very quickly and for their list price, you should start with your best offer. In a slow market, where it can take a few months to sell a house and there is a wide range of properties to choose from, your initial offer should be lower and your negotiation should start from there.
Before you come up with the actual offer, the first step you should take is find out how many potential offers are around. You should know if other buyers have a serious interest in the property, if the house is shown very often and if other written offers have been made. You will be making a completely different offer if there is competition for buying that house. The person who will give you all the details you need is your agent.
Your approach should be different in a slow market. After an initial low bid, you can raise your offer is more competitors appear. If you are interested in an overpriced listing, the negotiation may take a lot of time, so be patient and prepare for small raises with every counteroffer.
First-Time Advice: The give-and-take approach is probably the most used and useful strategy on the market. It involves splitting the difference between buyer and seller at a half way between their last offers.
No negotiation will ever succeed if those involved are not willing to do just that: negotiate. The ideal situation is when both the buyer and the seller come out of it feeling like winners. This is called a win-win.
You should do your best to be in a win-win situation. A home sale involves a lot of emotion and it's often very difficult to maintain one's calm when dealing with such a personal part of your life.
You must make sure that sellers feel good about what they're doing, as you will need their cooperation during the entire process. You may also want to negotiate more after inspecting the home or you could face unexpected problems after signing the papers. If you have already established a good relationship with the seller you will feel much better while working out all the aspects of the deal.
However, at the same time you will want to get the house for the best price possible and on very good conditions. Buyers can also experience emotional difficulty when negotiating for their future home. This is why people often choose to work with a real estate agent who will negotiate the contracts on their behalf. If don't have one, you can also hire a real estate attorney who will do pretty much the same job for you.
Even if you decide to go for it by yourself, you should bear in mind that you should avoid letting your ego interfere in the negotiations. Make your decisions in advance and establish the maximum amount you can afford to pay for the house. If the price gets out of your range, respect your decision to walk away. At the same time make sure you're not losing a good home because you're not willing to make any concessions.
The Closing: In a home sale you can negotiate everything, not just the price. So make a point in your favor by negotiating those elements which do not matter so much for you, but are essential for the other party.
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