The thought of negotiating a real estate transaction can be enough to make most people’s palms sweat. Selling a home – especially a home in which you and your family have spent years or even decades – is almost always an inherently stressful process. But with a smart strategy led by an experienced real estate team, you can greatly reduce the stress of negotiations, saving time and money along the way.
If you’re preparing to sell – or buy – a new home, here are some key points that can give you a leg up when negotiating a deal.
Hire a skilled agent.
When interviewing a potential agent, pay attention to how much time they spend asking you questions about what your goals are versus how much time they spend telling you what they think your goals should be. You should expect some level of guidance from your agent, but an inquisitive mind is usually much more effective than a dictator.
Don’t hesitate to ask a potential agent about their negotiation style to ensure it’s a good match with your own. A strong agent should also be able to readily and happily demonstrate their contract knowledge. You may also want to ask about how they’ve recovered from past mistakes. Every agent has made a transactional misstep at some point; the best agents learn from those experiences to become better negotiators.
When choosing to sell your home, you may be tempted by the growing number of listing services that offer discounted commission. However, many of these services offer less representation, and inadequate representation could cost you more – in time, stress and money – than you’ll save.
Build your buyers’ trust.
While it may be impossible to entirely remove human emotion from real estate negotiations, keeping emotions balanced and in check is always the goal. It’s important to remember that the stress of buying or selling a home is directly correlated to the level of uncertainty either party feels.
Striving for the highest level of transparency by, for example, performing pre-inspections and providing the necessary disclosures, is a great way for sellers to build trust with potential buyers right off the bat. The more sellers can work with buyers toward a common goal, the more quickly and painlessly everyone can move through the entire process and avoid tricky or heated negotiations.
Forget about saving face.
It’s not uncommon for a real estate deal to fall through, simply because the sellers were more concerned with saving face than selling their house. When emotions run high, people tend to lose sight of the big picture and fixate on what they think is “fair” versus what logically makes sense for them in the long run.
While many transactions go smoothly, your agent should remind you to focus on the positives, especially if negative or stressful feelings about the process arise. As you work together to accomplish a mutually beneficial agreement, the individual personalities of buyers and sellers may not always align. One thing I tell my clients is that, whether you complete or terminate a home sale, your relationship with the buyers ends either way. It’s easy to lose sight of this in the heat of the moment, but your agent should help you distinguish between a knee-jerk reaction and a course of action that aligns with your goals.
Avoid jumping to conclusions.
Your agent should avoid making assumptions until they’ve obtained all of the necessary information. As you’re negotiating, it’s wise to ask the other party for more information and let them speak first, whenever possible. Asking questions is a great way to get a good feel for the other party’s negotiating style so you know what you’re up against.
A common mistake less experienced agents make is personally involving themselves in a transaction with their use of language. For example, instead of dismissing a buyer’s request by saying, “I don’t think that’s a fair request to make of my clients,” your agent should always defer to you by saying, “I appreciate you submitting your request; I’ll need to check with my clients about how they’d like to respond.”
As an agent, if I find myself up against a particularly forceful negotiator, I continue to ask questions and make sure I write everything down, so I can calmly and carefully review the information with my clients later. People who employ intimidation as a negotiating tactic tend to lay all their cards on the table, so when you step away from the discussion you can analyze the root cause of their ask and brainstorm how to approach it differently. Remaining patient and inquisitive throughout heated negotiations can put you at a strong advantage.
Focus on the facts.
Everyone has a primary motivation when buying or selling a home. For some, it’s a time deadline. For others, it’s a fixed price or adequate space to build an accessory dwelling unit for their in-laws. Your agent should clearly understand the one parameter that matters most to you and prioritize that goal throughout negotiations.
In addition, establishing a timeline of important dates in advance can make the process feel more like a series of rational decisions as opposed to a laundry list of high-stakes judgment calls. Anticipation is always the hardest part of a transaction, so focusing on small, easy-to-accomplish tasks can keep you moving on the best path forward.
Work toward a mutually beneficial outcome.
The most important thing to remember when negotiating a real estate deal is that, by completing the transaction, both parties should ultimately get what they want. The old school “take all” style of negotiation simply doesn’t work anymore – especially in a balanced market. Instead of pitting sellers against buyers, agents should always steer negotiations toward a mutually beneficial result. Though the process may, at times, seem complicated, simple values like transparency, courtesy and helpfulness go a long way – and can be your best negotiating strategy.