Negotiating with the Seller

Unlike many countries and cultures, many Americans have limited experience with negotiating. Since a home may be the most expensive purchase of your life, presenting a good offer and working through the normal negotiating process takes on great importance. We work with clients to help them to achieve their goals and objectives – get the best possible home with the best possible price and terms.

The best negotiations are those that result in a win-win situation for both parties. Getting to that point requires special skills and strategies. There are a number of factors that can be included and modified when negotiating a mutually agreeable deal.

Key components of real estate negotiations

Price is the actual cost that you will pay for the property. While this is the most obvious and important item, the other components can also make or break a deal.

Closing costs consist of expenses incidental to the sale of real estate, including loan, title and appraisal fees.

Earnest money is the amount that is included with the purchase agreement and will be applied toward the cost of the home. More earnest money gives the Seller more assurances that the offer is solid and the deal will get done.

Closing date is important to both the Buyer and Seller. Reaching a mutually agreeable closing date can be an important factor in any negotiation.

Contingencies are conditions specified in a purchase contract, such as a satisfactory home inspection, ability to get financing or the sale of the Buyer’s home. While some contingencies are normally accepted (inspection), some contingencies may be rejected by the Seller (sale of Buyer’s home).

Tips and suggestions to successful negotiating

Begin with a fair offer. Although everyone would like to buy their home at a below market price, making an unrealistically low offer may not be productive – and may actually alienate the Seller and Seller’s Agent. There may be certain circumstances, such as a distressed Seller, that may call for a lower than normal offer. Your Agent will provide direction in this area.

Understand and respect the Seller’s position and priorities. While the Seller may be firm on the price, there may be other opportunities to improve the deal. For example, the Seller may be willing to compromise on the closing date or pay for some of the closing costs. These concessions may have the same value as reducing the price.

Compromise can be the best for both parties. While there is a certain amount of adversarial emotions that take place in a negotiation, it’s a good idea to remember that both parties can win by a willingness to compromise.

Split the difference. Whether the issue is the price or the closing date or closing costs, one of the best ways to reach an agreement is to split the difference. It appeals to a sense of equity and fairness for both sides.

Set the smaller issues aside. Sometimes, a small item like a light fixture or an appliance can threaten to derail a negotiation. If that happens, set it aside and focus on the bigger issues. Once those have been settled, come back to the smaller issues with a willingness to compromise to get things done.

Ask for advice from your AgentA good Agent knows from experience what works and what doesn’t in negotiations. Discuss different options and be open minded. There may be creative alternative solutions to overcoming obstacles that will result in a win-win conclusion.