(With Help from Your Realtor)
It’s not just up to the professionals to negotiate a good deal on a house. The seller or buyer also can learn how to work a transaction effectively, says Fred Roberts Jr., an Ocala real estate attorney and general counsel for Roberts Real Estate.
“Oftentimes, buyers and sellers want to negotiate in a dramatic fashion in hopes of enlisting a ‘spectacular’ response from the other party,” Roberts says. “In reality, for a buyer it’s often more practical to achieve the desired result by putting one’s best foot forward in the initial stages of the negotiation. This often tends to avoid potential standoffs or impasses. Similarly, sellers should be reasonable in order to achieve their desired results.”
“Your realtor can really serve as an intermediary to keep personalities from becoming a factor, which is often a big issue. Hurt feelings, bruised egos, and needless animosity can often serve as an impediment to the negotiation process. Furthermore, your agent can help you to determine when a small concession in terms might have a very small impact on your bottom line but a huge impact in the negotiation.”
The Better Homes & Gardens Real Estate Guide recommends that you plan ahead. Decide ahead of time what will be the lowest price you’ll accept, or offer, and then stick with it. Discuss several scenarios with your agent, so you’ll be prepared when it comes time to make a decision. Anticipate extra expenses that will occur, such as closing costs and other responsibilities.
If things aren’t going your way, be prepared to walk away, says Sheree R. Curry. Particularly when buying a home, if the seller doesn’t meet your maximum price or other concessions, even when the home meets all your criteria, it’s wisest to walk out rather than overpay.
Negotiating tips for the buyer:
Drive by comparable listings. It’s always a good idea to compare what the competition is offering. Don’t just trust in newspaper photos that can mask the flaws. You need to see the property up front.
Decide in advance how much “earnest money” you can put down. According Curry’s article in AOLrealestate.com, even when making a low offer, you may want to sweeten the deal by providing a larger amount in earnest money than the usual one percent. This will show the seller that you are committed to the deal.
Set an expiration date for your offer. You might want to put a limit on it, say, as little as 24 or 48 hours. This also will reduce the amount of time a seller can consider other offers. In a sense, you’re fending off competitive offers. Note: This strategy only works with regular home sales, not with foreclosures or short-sales.
Learn to negotiate financial concessions. Curry also recommends asking the seller to pay all the fees, including transfer taxes, inspections and appraisals. You also can ask for credits for any repairs you might anticipate after the sale. Some banks allow a credit up to 6 percent of the purchase price.
Negotiating tips for the seller:
Decide what you want to achieve. Business entrepreneur Christopher M. Knight says to let the buyer know up front what you require in the sale. Some things you might want to consider are your home’s current market analysis, property disclosures, title and survey issues, and resolution of necessary repairs. You also will want to set the closing time and date to fit your own schedule.
Know the buyer’s underlying interests. It will increase your own negotiating leverage if you notice that the buyer seems to love your house or if they are in a hurry to make a purchase. Conversely, be wary of an offer that contains a high risk contingency on the buyer’s ability to sell their own home.
Finally, maintain a cooperative demeanor. The goal is to avoid an adversarial style of negotiating, which can drive the buyer away. Don’t be defensive over negative comments on the part of the buyer or his agent. Allow your own agent, a professional negotiator, to come to the rescue, Knight says.
Buying or selling a home in Ocala, Florida? Roberts Real Estate specializes in personal service backed by a deep knowledge of the local community. We have professional, knowledgeable, and dedicated agents who follow through from the beginning to the end of the transaction. Call (352) 351-0011 to speak with one of our agents today.