A show of hands - Who considers themselves to be a skilled negotiator able to navigate a complex transaction, keeping sight of the big picture while remaining acutely aware of the pitfalls in the details?  If you are like most people, your hand will be at your side right now.  Why?  Because the ability to negotiate and maneuver through a transaction as complex as buying or selling a home requires knowledge, experience, confidence, and specialized market information.  This is why I strongly recommend partnering with a professional real estate agent whenever you decide to buy or sell your home.

In the event you are buying a home, and you are considering making an offer, here are a few tips you can use to your benefit during negotiations.

1. Remember that negotiating is very much a people game.  Emotions run high, unforeseen or unimagined factors play into the process, and people can and do make decisions that fly in the face of all rational thought.  Prepare yourself for this reality and ensure that you maintain your composure at all times, especially when in the presence of the seller...
2. Extensive, useful public documentation is available from your real estate agent.  Any quality agent should be able to quickly provide you with prior deeds, mortgage notes, liens, plus tax and assessment information.  Discovering that your seller purchased the home two years ago for $100,000 and is selling this year for $175,000 should raise a red flag to you.  Was the home purchased as an investment, did the seller perform extensive updates, or did the seller get an incredible deal?  You need this information prior to making an offer.
3. Study the immediate market around the home in great detail.  You do not want to purchase the most expensive home in the neighborhood in this market.  Ask your agent to provide all comparable properties, to calculate absorption rates, and to help you analyze the broader market looking at foreclosure rates, length of time on the market for comparable properties, and you may even want to preview other homes in the area just to compare condition and pricing.
4. Research local amenities and schools.  Even if you do not have school-age children or if you are not a big shopper, you need to know exactly what the area has to offer because when you decide to sell your future buyer may find this information critical.  Don't overpay for a home that is in an area isolated from amenities, or one that is in a questionable school system.
5. Most importantly, remain calm, cool, and collected.  Approach the negotiations with your objective hat on, and leave your emotions behind.  Your emotions played a role in helping you find your new home, but they can work against you during negotiations.  The seller is counting on your emotions getting ahold of you and causing you to agree to a higher price.  If you have trouble with separating objectivity and emotions, confide this to your real estate agent and rely on them to help you think through the process.

I hope these tips help you when you are negotiating for your new home!  For additional information, or and even more detailed look at real estate negotiations, give me a call...

Joe Hayden is a real estate Realtor based in Louisville, KY. You can contact him and search for Louisville Real Estate through his website.