Negotiating Power: Who Has It and Who Doesn't
I work with buyers and sellers and one thing that many of them lack is the power and understanding of being in a position of strength when it comes to negotiating.
At the very heart of the matter is having something of value to negotiate with and below is an abbreviated list of examples of what may constitute something of valuel:
For the home buyer
- A pre-approval letter
- A sizeable downpayment
- Good credit (to negotiate the best rate with yoru lender)
- Ability to pay own closing cost
- The ability to close quickly
- Think like a seller and use it to your advantage
Note to buyers: A mere expressed interest in a property does not put you in a position of strength when it comes to negotiating.
For the seller
- A home that is appropriately priced (resulting in high buyer interest)
- Multiple offers
- A rare listing in a highly sought after neighborhood/community
- Flexible closing cost assistance
- Readily available routine maintenance records (HVAC, roof, electrical, etc)
- The ability to close quickly
- The inclusion of amenities (your high end appliances......hint, you can always buy yourself some mroe of these)
- Understanding buyer motivation
Note to sellers: What your neighbors received for their home (which is not comparable to your home) is not considered being in a position of strength. Understanding of true comps will help you in the long run.
The overriding concept of negotiating is that each party negotiates based on valuable consideration. In other words, during the negotiations, each party recognizes and is willing to compromise on items of value to them. The end result is that neither party may not get everything that they want, but they were flexible enough to negotiate for the most important and trade off items that ranked lower on the totem pole of importance.
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