Selling a Home that Failed To Sell Series- Part 16-Winning Negotiation Strategies
Negotiations can be a scary part of the real estate world. After all, we are talking about one of the biggest investments you may ever make. It’s a lot of money on the line! Buyers and sellers both worry that they will get taken advantage of by the other side.
The good news is, by hiring an excellent agent, you are working with a skilled negotiator who has your best interest in mind. At Hoberg Homes we believe that every transaction should be a win-win or no deal.
What does Win-Win or no deal actually mean? We believe the most skillful negotiators are those who create win-win scenarios for both parties in the equation. Just because you are trying to score a deal, does not mean there’s nothing in it for the seller or vice-versa. For example, investors hoping to score an investment property for a low price may offer some concessions to the seller, like offering to cover moving costs. In the big picture, moving costs are a small expense for investors but could be a large gesture to the seller.
We look at the whole deal. In reality, smart investors never negotiate over just one issue: they always have topics in their queue ready to go. That way, we can make sure everyone gets a little bit of what they want.
Let’s take a look at some top negotiation strategies that help you achieve your goals and have a win-win deal.
STRATEGIES FOR SMOOTH NEGOTIATIONS:
1. Don’t Make the First Move:
Many buyers will flat out ask the seller what their bottom line is because they think they will be able to negotiate to an even lower price. Don’t fall for this! You have already set your asking price. Make the buyer make the offer, then negotiate from there.
2. Get Clear on your goals
Now, you might think this is obvious, but the reality is that most people who go into a negotiation haven't thought about what they want to walk away with.
To get clear about your goals, there are three key questions you should ask yourself:
· What's the best possible outcome? Let's say you're negotiating to sell your house -- what's the most you could realistically go after?
· What's your bottom line? This refers to the least acceptable offer. If you're the seller, what's the lowest offer you'd be willing to accept? And if you're the buyer, what's the most you'd be willing to pay?
· What's your plan B? Roger Fisher and William Ury, members of the Harvard Negotiation Project and the authors of Getting to Yes, call this your "BATNA" -- your best alternative to a negotiated agreement. What are you going to do if you don't reach an agreement?
Of course, you shouldn't broadcast your answers to questions A or B, but you need to know all of these things going in. Even if you're not totally sure of your answers, just having a sense of what they might be can help you. As you become clearer about each of these elements, negotiating will become easier.
3. Prepare for Compromise:
The next key to successful negotiating is compromise. As you anticipate how to create a win-win situation, look for areas you are willing to budge on within the contract. Perhaps you are willing to include the refrigerator instead of making a minor repair. Or maybe, you would be willing to give a carpet allowance. Just be sure to think through potential areas for compromise before you sit down at the negotiation table. This will help you avoid conceding too much or walking away from a deal unhappy. Compromise is key to real estate bargaining, but so is holding your ground where it matters.
4. Know When to Walk Away:
An extremely important factor is knowing when the deal on the table is not a good one. Remember, emotions can get in the way of your decision making. Maybe you have had the house on the market for a while and you haven’t had any offers and you have finally found someone interested. Ultimately, both sides need to remember to take their time before rushing into a decision. You do not want to accept an offer if it is going to end up hurting you in the long run. If you sold your home and you realize you’ve made a bad deal, you will be hurt financially. You must keep an open mind if it is a wise decision to walk away from a deal in search of a better one.
5. Research: Before putting your home on the market, we do extensive research on the market and the area you are in. You don’t want to go into negotiations with no knowledge of the surrounding area and your competition. Getting all of the information about the home and neighborhood will give you more ammo to use when negotiating an offer. It is also important to try and get some information from the other party. Why are the buyers moving? Why is the buyer looking to buy and how motivated are they? When you have knowledge of the other party it puts you in a better position to walk away with a winning deal, so make sure you do your research first!
6. Keep control of your emotions and don’t let ego get in the way:
During the negotiation process it is easy to get swept up in emotions. This is the time to keep your cool and keep your goals top of mind and remember why you are selling in the first place.
I have seen people kill a potential top- dollar sale simply because they didn’t like the buyer. Or because the buyer started negotiations with a low offer and the seller got offended. Most low offers can be negotiated up. I have also seen buyers, who think they are great negotiators, miss house after house because of their “take it or leave it” arrogant attitude.