The Negotiating Process: Some Things to Watch Out For

by : Matt Barker

While we all hope that a sale closes smoothly and the outcome is fair to both parties involved, the truth is that when a home is being sold, both the buyer and the seller want to get the best deal possible. Unfortunately, it usually just isn't possible for the seller to get the most they possibly can for the home and a buyer to also be getting a great bargain. During negotiations, both parties will be observing their own agenda. Knowing the common negotiating tactics will help you keep the outcome fair, whichever side of the deal you are on.

For a buyer, price whittling can lead to a lower sale price, but it can also mean a missed opportunity. If you keep grinding the seller with a low offer, and expect a whole bunch of "extras", don't be surprised if they go with another offer. For sellers, be aware that accepting a lower offer that has no strings attached may in fact make you more money in the long run than a higher offer that requires you to pay closing fees or finish renovations.

If a couple is buying or selling a home, they may play off each other to move the transaction in their favor. For example, one spouse may convince the seller the sale is imminent, then request more time to talk to the other spouse. After a time, a lower offer may be presented on the excuse that the other spouse isn't as sure. The fact is, if someone wants a house, they will buy it. If they don't want it, why would $5000 less make it any more appealing? To avoid having spouses play off each other in negotiation, be sure to present offers to both of them simultaneously. If only one spouse shows up at a meeting, assure that they have decision making authority. If they don't then the meeting won't be as productive. Try to avoid this scenario as it delays the process.

Sometimes, a third party must be consulted before any decision making can be done. Parties such as investors, loaners, co-signers or even advisors may be required to give the Okay before a buyer will make a decision. Be sure to determine this early on. If a third party is genuinely necessary, this will be a factor that slows down the negotiation process quite a bit. If one is not really necessary, a buyer may be using it as an excuse to manipulate negotiations.

If a seller is stalling on accepting your offer, you need to remember that you have the right to revoke your offer. While this is usually a last resort, if your finances require a speedy closing, there is no need to get stuck in one offer. If you let them know you don't have time for it, and are willing to back out of your offer, they may just change their minds and accept what you've offered them.

Both parties in a real estate transaction need to recognize what is fair and just be honest about it. While no one party can win it all, a fair price can easily be agreed upon if one knows how to avoid manipulation and maintains an honest negotiating style.