It’s easy to assume that negotiating is adversarial. You, the buyer, are on one side — the side that wants to buy a property for the lowest price possible. The opposition on the other side is the seller who wants to sell for the highest price possible. You’re locked in a tug of war to see which side will win.
It’s more productive to look at a negotiation as a problem-solving process. You and the seller may have different ideas about what price the property should sell for. However, you’re united in a common goal of consummating a deal. The challenge is to resolve your differences through a process of give and take until you either reach your common goal, or decide to go your separate ways.
Of course, you have to arrive at a mutually agreeable selling price for a sale to go through. Sometimes this will happen quickly; sometimes it’s a drawn-out process that can last over days or even weeks.
HOUSE HUNTING TIP: Patience can be your ally. Sometimes rushing the process can quicken its demise. In fact, you may be better off waiting before starting the process if you think that the asking price is too high.
For the first time in years, we are in a market where some home sellers — typically those who bought recently — won’t be able to sell their home for a profit. But, they may need to test the market to be sure.
If this is the case, the best negotiating strategy may be to offer nothing until the sellers are close to reducing their asking price. There can be a benefit to making an offer just before a price reduction is made. If you wait until the price is lowered, you could end up paying a higher price if other buyers suddenly become interested.
In order to make sure you know that the sellers are contemplating reducing the price, ask your real estate agent to talk to the sellers’ agent and make sure that the sellers are made aware of your interest. Don’t be bashful about the fact that you are interested, but not at the current price. This way, you may receive a call when the sellers decide they’d like to see an offer from you.
When you make an offer and there’s no competition from other buyers, your initial offer price should leave you room to move up in price. But, it should not be so low that it’s insulting to the seller. Otherwise he or she might not respond at all. An offer that’s much lower than the market would give the seller the impression that you can’t afford more, so there’s no point in issuing a counteroffer.
Buyers often think that if they start too high initially, they’ll end up paying too much. Your initial offer price should be good enough to entice the seller into a dialogue. It’s a price to get the ball rolling. From there, you can move up in small increments, if necessary.
Don’t get so caught up in negotiating the price that you overlook other opportunities for consensus building. Most good negotiations have a sense of fairness about them. During the process of your negotiation, you and your agent should brainstorm all the possible ways that you can accommodate the sellers.
Do they need a quick close? If so, they might be willing to give more on price for a speedy close. However, you might want to hold up offering this information at the beginning of the dialogue. That way, you have something more of value that you can offer the sellers in exchange for a further price concession.
THE CLOSING: When you get close on price, offering to split the difference can put a seal on the deal.
Dian Hymer is author of “House Hunting, The Take-Along Workbook for Home Buyers” and “Starting Out, The Complete Home Buyer’s Guide,” Chronicle Books.