You’ve heard that everything is negotiable when it comes to real estate: price, closing date, who pays for new carpet in the bedrooms, whether the patio furniture comes with the house. Any of these can be part of the deal.
Just remember that whether you think negotiating in a real estate transaction is exciting or terrifying, you won’t get the things you don’t ask for. If there is something special you want, speak up. Your Realtor is an expert at hashing out contracts so both parties are content.
Whatever your opinion of the process of reaching consensus may be, here are five mistakes to avoid when negotiating a deal.
Too many people let emotion dictate their negotiations. Don’t get angry when a buyer presents a low offer for your home. He’s not insulting you, and he doesn’t think your house is a poorly maintained shack. The buyer needs to start the negotiation somewhere. They may be testing the waters to see how low you’ll go. Or their negotiation tactics could have been formed in a country where negotiating is handled differently. Whatever the case, if you see the offer as an insult and choose not to counter, you may be cutting off the process that would have resulted in a sale.
On the buying side, don’t get bent out of shape if a seller rejects your offer or counters with his original asking price. You may have determined that you presented a very fair price for the house. Good for you. Try again or move on. It’s not personal.
Keeping emotions out of a deal also means maintaining a business relationship and not feeling sorry for the other side. If the seller rejects your fair offer based on “needing more money for my retirement fund,” ask for a reason that’s relevant to the property sale. On the other hand, if a buyer says they can’t afford your asking price, but you believe you’re asking fair market value, stick to your guns. Maybe yours just isn’t the house for them.
What’s the lowest price you’ll accept for your home? What concessions, if any, will you make? Answer these questions before you put your home on the market and revisit them if your home isn’t seeing the activity you hoped for. And for buyers, what’s the absolute most you can afford? How close are you willing to come to that number? Whether you’re buying or selling, be sure to share this info with your Realtor so they know about your priorities.
Splitting the difference doesn’t mean that both parties get a fair deal. If a buyer offered $270,000 for your $300,000 home, you countered with $290,000, and the buyer offered to split the difference at $280,000, would you feel like you both won? Whether you’re buying or selling, don’t allow an extreme offer to affect your counter.
Are you willing to jeopardize the sale of your house because the buyer wants the entryway mirror to convey? As a buyer, how will your monthly payments really be affected if the seller won’t drop the price another $5,000? Sometimes you have to take a step back to make sure you’re not overemphasizing one detail that is standing between you and your objective.
Your Realtor can help you analyze the current market and identify an appropriate buying or selling strategy for you. Begin your home search by visiting
Kenya Burrell-VanWormer, with JPMorgan Chase, is 2018 chair of the Houston Association of Realtors/HAR.com.