Learn how you can not only play the negotiation game, but also win. When my husband and I were buying our first house in Georgia, I cringed at the tough negotiating he was doing, as did our agent. "You sound like a fast-talking big city businessman," she said to him in her smooth drawl. But as cringe-worthy as it seemed at the time, he was just engaging in some tried-and-true horse-trading — trying to make a deal that both sides could feel good about. You might be the type of person I was, the kind who never questions the price of an item. (I didn't exactly shine at garage sales.) But once you learn how to handle negotiation encounters, you can prosper. When selling your home, your first reaction might be a big "oh heck no" when you get a low offer on your asking price, but take a deep breath and at least consider your options. Here are six tips for not only playing the negotiation game, but also winning. 1. Price it right There's a difference between the price you want to get (or what you think the house is worth) and what the market will bear. "Pricing is not based on how much a seller needs to net," says Brian Horan, a Los Angeles real estate broker. "Sellers always seem to need a certain amount, but that has nothing to do with the price of tea in China." Look at neighborhood comps to give you a more realistic idea. Find a savvy real estate agent; she should be able to provide a benchmark for asking prices that reflect market valuations. 2. Consider the first offer Chris Leavitt, star of Million Dollar Listing: Miami, says, "Really pay attention to your first offer because that will probably be your best one." Leavitt, who once sold a Miami Beach condo for $34 million, the highest condo sale in Florida history, knows a little something about negotiations. "Your best offers usually come at the beginning, so it would be a mistake to not listen to those offers, regardless of what they are," he says, adding that sellers "shouldn't be insulted because that offer might actually be the right price, the market price." 3. Think like a salesperson Patrick Malone, senior partner at The PAR Group, says, "All home sellers should establish their BATNA before listing their house for sale." No, he didn't say you need to become Batman. "BATNA" stands for "best alternative to a negotiated agreement." This is a negotiator's fallback option in case there's no deal. Having a BATNA puts you in a stronger negotiation position. Maybe you've decided that if you don't get your bottom line, you'll rent the place and try again later, or maybe you'll renovate and stay. Keeping your BATNA in the back of your mind can help prevent you from agreeing to a bad deal out of desperation. 4. Don't get emotional It's probably best not to listen to Miranda Lambert's "The House That Built Me" before you enter negotiations with a potential buyer. Garratt Hasenstab, managing broker with the Verdigris Group, says you need to stay levelheaded throughout. "This is business, simple as that. There is no call for emotion. Rational thinking, business skill, and negotiation skill are what it's all about." Hasenstab also recommends your real estate agent find out the buyer's prequalification amount from the bank or what the buyer's desired purchase price is. The more information you have about a buyer's financial situation and needs, the better you can bargain. 5. Be realistic Being stubborn is usually not the best strategy in any negotiation. If your goal is to sell, taking less than your ideal price is better than not selling at all. Glenn S. Phillips of Lake Homes Realty says, "Sellers must account for the real cost of not selling — not just a monthly mortgage payment — but utilities, insurance, maintenance, yardwork, and risk of vandalism or theft." Once you know the total cost of keeping your home on the market each month, it might put offers, even the lower ones, in better perspective. 6. Embrace creativity If you and the potential buyer are at a stalemate regarding price, it might be time to entertain some out-of-the-box ideas. Chris Leavitt suggests you offer to throw in the furniture. Glenn Phillips asked for some extras when buying his first home: the riding lawn mower, the window treatments — and even the dog. And it paid off: "Mikey the Mortgage Dog has been one of the best dogs ever."
Power your marketing with great writing. – Start your 30-day free trial today! GET STARTED