Hostile Negotiations in Real Estate
We all know that we are currently in a buyer's market. It's because of this shift in the real estate world that many home sellers are faced with a negotiation process that is much more difficult than we have seen in many years. I have posted some ideas here to allow you the ability to prepare yourself for the negotiation process as it pertains to real estate.
1) Never negotiate out of fear. Don't be bullied by a potential buyer because the real estate market isn't very strong right now. Utilize up to date market information to make informed decisions about the offer that is presented to you.
2) Win-win situation? I hate the prospect of a true win-win situation. The best scenario for you is a win-perceived win situation where you are winning and the person you are negotiating with thinks that they are winning. Make sure the other side of your negotiations get what they need, but maybe not what they want.
3) Keep an open mind. Try to think of different ways to package something that will be enticing to the buyer. Sometimes the craziest ideas stand to make you the most money in the end.
4) Remove personal judgments and feelings. This is very tough for home owners because they have lived and loved the property that they are selling. You may think that your house is much better than the other homes available, but realize that this can only be true for <50% of the people out there. Once again, rely on your real estate professional to give you sound advice in regards to current market data when making your decisions.
5) First offer is the best offer. I hate to say it, but this statement is probably true over 90% of the time. I'm not saying it's always the case, but do take you first offer very seriously when negotiating the sale of your home.
6) Buying your house back. Something to think about when rejecting an offer is that you are basically telling everyone that you would rather keep the property than sell it for a certain price. In essence, you are buying your house back at the price that the buyer offered.
7) Negotiate with the decision maker. Not only do you want to know a little bit about who you are negotiating a deal with, you also want to make sure that you aren't dealing with the wrong person. If you know that the wife "wears the pants" in the family, you need to negotiate with her. No offense gentlemen, but this seems to be the case more than not.
8) The perfect timing. Please realize that negotiations in real estate transactions can be extremely different depending on timing. A seller with a house new to the market will be able to negotiate much more strongly than one that has been listed for sale more than 6 months.
9) Don't just drop the price. If someone is telling you your house is worth $10,000 less because it needs a new roof, should you just give in to a price drop to sell your home? Or maybe should you look into replacing the roof and standing firm on price? The ultimate question you need to ask is what is easier on your pocketbook? If it only costs $5000 to replace the roof, you should probably offer that to a potential home buyer and stand firm instead of dropping to their price.
10) Not all negotiations end in selling your home. Just because you've gotten an offer, doesn't mean that you will end up selling your home. One of the first rules of real estate revolves around the phrase, "__________ happens." Please remember to always do what's in your best interests. Your real estate professional should always be looking out for your best interests, but keep an eye on them. Sometimes the dollar can be stronger than a person's morals, if you now what I mean. If a sale is not meant to be, then it's not meant to be no matter what anyone tries to tell you.
There are tons of other thoughts that I could put into this post, but I would be typing all night. Please post your questions, comments, or concerns in regards to negotiations in real estate here for answers and review. I'd also love to hear about any good or bad real estate negotiations that you have had in the past. Allowing others to hear the moral of your story may prevent them from making similar mistakes, give them great ideas, and/or could save them thousands of dollars. I do ask that you please keep your posts clean and don't use the names of anyone involved. We aren't here to bad mouth anyone, we are here to learn.
Jason Tangen
www.stcloudedina.com/blog - REAL ANSWERS for REAL ESTATE in St. Cloud, MN
