Negotiation in Real Estate
You might have heard the expression, “everything in real estate is negotiable,” and it is true! Nearly every part of the purchasing phase of a real estate transaction is negotiable. Understanding more about the negotiation process creates additional options, and confidence increases the chance of getting the outcomes you desire.
Negotiating is the process by which two or more parties with different needs and/or goals work to find a mutually acceptable solution. Because negotiating is a process, each negotiating situation is different and influenced by the process and what compromises are available. We often look at negotiating as unpleasant because it implies conflict, but negotiating need not be characterized by bad feelings or angry behavior.
If you do not think you are good at bargaining, just reflect on how much we all negotiate in our daily personal and professional lives. Everything from when a project is due to when a meeting is scheduled is negotiated.
Sometimes it is easy to negotiate; however, if there is a great deal at stake or we are anxious about getting a particular property, then it seems more daunting and even difficult.
Here are several tips to improve your effectiveness in negotiating:
There are good times to negotiate and times that limit a deal. In real estate, the longer the home has been on the market, the better! If someone has just listed a home, then they are far less likely to negotiate. Additional considerations include: Does the listing say it must sell fast? Is the home already vacant? Gathering additional data and choosing when to make an offer is critical to your ability to time the offer.
Evaluate the Data
Negotiation includes doing research and, ultimately, both parties are trying to find a solution acceptable to close a deal. Ideally, one needs to understand the other person’s needs and wants, with respect to the listing. How much did they previously pay for the home? What is the condition of the property? What data do you have about the listing? Is the home vacant?
It is normal to become emotional during the negotiation process. However, if one gets more emotional, they are less able to channel their negotiating behavior in a constructive way. It is important to maintain control and not let pure emotions control the deal. There are also times that the purchaser gets to emotionally attached to a property.
Before entering into a deal, prepare some options that you can suggest if your preferred solution or price is not accepted. Anticipate why the other person may resist your offer, and be prepared to counter with an alternative.
No Need to Argue
Negotiating is about finding solutions and arguing is about trying to prove the other person wrong. When negotiating shifts into an effort to prove the other one wrong, no progress is gained. Do not waste time arguing. If you disagree with something, state your disagreement in a gentle but assertive manner, emphasizing what you want to achieve.
Negotiating is a complex process; however, it can be mastered. If you focus on what you want to have happen, practice these suggestions and utilize the professionals on your power-team, you will be a strong negotiator and win over the deals you desire.