The residential real estate market
is challenging, but buyers can often get a lower price and better terms if they
are a skillful negotiators.
1) Arm Yourself. This means hiring the best real estate agent you can get to
represent you in your purchase. This person should know what you want and how
much you can afford. He or she should be a person with whom you can
communicate, who inspires your trust, knows the area where you want to buy, is
ready to do research for you and can help you plan your strategy when you make
the offer. An added bonus to using an agent is that your offer will be much
better received when it comes through a third party, so let your agent do the
talking.
2) Don't be greedy. Here's good rule-of-thumb to follow: never make an offer
lower than the lowest price you think the seller might actually accept. Any
offer lower than that will only be considered an insult, and when you make an
insult instead of an offer, you end up having to overcompensate in your next
counteroffer, because the seller is now mad at you!
3) Buying a home is an emotional
buy. You are not buying stocks or bonds;
you're buying a home for yourself. But, in any case, it's a statement of who
you are and how you want to live. So, when you find yourself getting excited or
angry, get advice from your buyer's agent and from friends. Negotiations can
fail before they begin when a buyers lose their "cool".
4) Get the facts straight, and
compare apples with apples. Let's say
you are interested in a certain property. Your agent has access to the sales
and tax records for all the properties "for sale" and
"sold" in the area where the property is located. Pay the most
attention to the "sold" prices of similar properties that have
changed hands in the past six months. Drive by the houses, if you can, and get
the details on the interior features of each one. Compare like properties;
don't think you can get a house with a new kitchen for the same price as the
one that needed renovation.
5) Concentrate on the sale rather
than the sellers. Buyers are often tempted to assign
all kinds of attributes to the sellers, even if they have no idea of what the
people are really like. They might think the sellers are "cheap" or
"unreasonable" or "stubborn", and use up all their energy
second-guessing the sellers' motives, rather than focusing on how to get the
price and terms they want.
6) Explain yourself. If you are asking for an unusual term, like a late
settlement, make sure youexplain why. Buyers and sellers can agree on terms
more easily if they understand the otherparty's objectives and needs.
7) Let them know you love it. It may sound corny, but you may want to accompany your
offer with a letter telling the seller just how much you love their house and
why. Like buyers, sellers get emotional, and it won't hurt to let them know
that you really appreciate their home.
8) When you get an inch, don't go
for a mile. Most inexperienced negotiators
interpret any concession on that part of the seller as a total victory and end
up losing by making unreasonable demands and "turning off" the
seller. For example, earlier this year, certain buyers asked the sellers if
they could put off reviewing contracts an extra day to give them a chance to
sit down and write an offer. The sellers agreed and the buyers then asked if
they could see the house one more time. The sellers agreed and the buyers then
asked if the sellers would hold financing and include some of their expensive
furnishings as part of the list price! Needless to say, these buyers did not
get the house.
9) Stay in the game, and don't
overreact. If you get a counteroffer from the seller
that is higher than you expected, don't give up. A slight increase in price on
your part and a change in terms that pleases the seller can still allow you to
reach your target price range.
10) Be realistic; you never get
everything you want. If the house is priced at $900,000,
you won't get it for $750,000, no matter how clever you are. If the property is
over-priced, it may eventually come down in price, but as long as the sellers'
expectations are so high, you are not going to be able to pull them far enough
in your direction.
Set your sights on the properties
that are fairly priced, plan your strategy, stay calm and cool, and you have a
good chance of saving money on your new purchase.
-Donna Evers, Broker and President,
Evers & Co. Real Estate
