Negotiation is part of life.
Children negotiate, couples negotiate, companies negotiate, nations negotiate: negotiation is how parties with different needs work out an agreement to satisfy both sides.
Negotiation can be simple or complex but getting to the point where both parties can say "Yes" usually requires a series of steps where each side acknowledges the other, makes its needs known, puts forth a position, modifies the position where appropriate, and finally decides to accept (or reject) the offer.
Here are seven tips for how to negotiate real estate well:
1. Build trust through respect
Trust is the foundation of negotiation—the higher the trust factor, the more likely negotiations will bear fruit, since each party must be confident that the other will keep "their end of the bargain." Trust begins with respect, so look for ways to acknowledge the other party and find something of value. When negotiating real estate, pointing out some of the good features of the property will not weaken your position; on the contrary, it should strengthen it, as it shows your ability to appreciate the property (and thereby the owner). From this positive basis, it is easier to negotiate how to remedy problems and achieve a deal acceptable to all.
2. Know your facts
Every property has flaws but not all flaws are equal. Knowing what is wrong and how much each flaw is worth are critical to good negotiating. This is where your REALTOR®, armed with a house inspection report, can advise you. If the roof is damaged, find out how much it would cost to repair it before entering negotiations; this way you can work out an allowance based on facts, not conjecture.
3. Think Win-Win
The secret to successful negotiation is to enable each party to leave the table feeling they have won something. If you approach the negotiation in a way that is perceived as "take, take, take," human nature will kick in and you will likely be rebuffed. Remember: it's not a great deal if you don't close the deal—and no deal will close if the other party thinks they are losing everything. So look for ways to structure a win-win situation. For example, time and money are often interchangeable, so if driving the cost down is important, offer to be flexible with time. If moving in immediately is important, perhaps let go that last allowance for the spot on the carpet. Sometimes it's worth asking the other party directly: "What is most important to help this deal go through?"
4. Build reasoned positions
REALTORS® have seen deals fall through after the parties haggle over absurdly small amounts. Or they may not even get that far if a "bargain-hunter" presents an offer that is ridiculously low: the seller simply does not respond. While occasionally a dramatically low offer generates a response, more than likely it will have no impact or be treated as an annoyance. The better strategy for both buyer and seller is to define value clearly ahead of time. What is the property worth? What is a reasonable starting point? What is your bottomline position above or below which you won't budge? Define these before you begin negotiating." Reasoned" doesn't mean you can't get a great deal or make a solid profit – reasoned means that the figures have a logical basis (not plucked out of thin air) and that you have a plan to adjust the numbers sensibly, if required.
5. Evoke confidence
Experienced negotiators talk about the importance of confidence. But confidence is not about projecting an image: confidence comes from being well prepared. Know the property you are dealing with, its strengths, weaknesses, and value. Your REALTOR® can provide you with extensive information and guidance.
6. Know when to be quiet
One of the best ways to negotiate is to know when to say nothing. Too often people talk away their advantage. Do your homework, present your offer, and be prepared to remain quiet while the offer is being considered and absorbed.
7. Retain your integrity
What's the difference between a scam and a deal? Simple: one pretends to offer value but does not, the other fairly exchanges value between the parties. Ultimately, every negotiation is about an exchange of value and the most solid negotiating position is that which is grounded in truth. While there are many techniques that can enhance one's negotiating effectiveness, at the end of the day, the real deal-makers can always demonstrate a true exchange of value that benefits both sides.
EXIT Trinity Realty retains REALTORS® with many years of experience. We would be pleased to represent you—call (614) ANY-HOME or contact us here.
