Do you squirm at the thought of negotiating with sellers at garage sales, flea markets, and antiques stores? Even if you’re pretty confident (if you do say so yourself), the process of buying a house can be filled with real estate negotiation nightmares.
Here are some out-of-the-box negotiation ideas that can help turn a possible nightmare situation into a good deal for you.
1. Don’t shy away from a challenging deal
For example: Divorcing spouses don’t always agree — on anything, but especially not selling their marital home. But that doesn’t mean you should walk away. Instead, rely on the agent to guide the process. That way, “when the sellers don’t agree on terms, we have a less painful reaction [from buyers].”
2. Be realistic about repairs
You really want to sell your house as is, but the only acceptable offer you’ve received includes making repairs — and you don’t have the time to devote to the research, vetting, and oversight those repairs require. Don’t fret. You may be able to get the buyer to do the legwork for you.
“The buyer needs to carefully calculate the cost of doing the repairs,” says Susan Naftulin, CEO of Rehab Financial Group. The seller can then offer a credit for the cost of repairs at closing instead of risking a lost sale.
As the seller, you should carefully double-check the buyer’s numbers so that you’re not reducing your price by more than is absolutely necessary.
3. Keep stubbornness in check
Sometimes egos can ruin a home sale. When that happens, take a deep breath and remember your goal.
“I just had a deal where my buyers paid $300,000 over the asking price for a single-family home,” says Roh Habibi, a real estate broker with Coldwell Banker and star of the TV show Million Dollar Listing San Francisco.
But even so, the deal almost fell through because the sellers wouldn’t include a washer and dryer in the sale.
Note: Just erase a zero (or two) from this example and you’ll see that the advice applies no matter the budget. Don’t let a small setback become a deal breaker.
4. Look at the big picture
You’ll be more likely to win a negotiation battle of wills if you’re not stuck on a specific number.
Sellers and buyers often enter a stalemate over minimal sums, says Chris Leavitt, a broker at Douglas Elliman who also stars on the TV show Million Dollar Listing Miami.
When that happens, Leavitt suggests that sellers consider the monthly carrying costs. “Do you really want to be on the market for potentially a few more months?”
For buyers, it’s about whether they really want to lose their potential new home over a small amount of money.
“Almost 100% of the time, both parties will meet in the middle,” says Leavitt.
5. Understand the difference between prequalified and preapproved
When lenders prequalify buyers, they simply estimate how much buyers might be able to borrow, and they base that figure on what buyers reveal. Being prequalified is not a guarantee that buyers will get a loan.
However, being preapproved means buyers have a loan in place that they’ll probably get if they act within a specified time.
Both buyers and sellers save time and negotiation skills when the buyer comes to the table with a preapproval letter from a lender.
6. Be realistic about short sales
Negotiations don’t work the same way when you’re dealing with a short sale. In this case, sellers are considered to be in dire straits financially, which means they can’t afford to make repairs or provide a repair credit, so that one’s off the table. These sellers also might have outstanding liens on the property that they want or need their buyer to pay.
As a buyer, you’re under no obligation to take whatever the seller dishes out. But if you still come out ahead after calculating costs of repairs and liens, then you might want to go for it.
7. Prepare to walk away
Sometimes people become unreasonable and even resort to bullying as a negotiation tactic.
But when someone is unwilling to engage in a civil way, Ailion says, it’s time to walk away. “Life is too short to deal with difficult people. Some transactions are just not meant to happen.”
How have you avoided real estate negotiation nightmares? Share your tips in the comments below!