I love a good negotiation, and think I'm fairly good at it.
I know many who don't--and aren't. Negotiaphobes are easily recognized; they take the transaction personally, hate/fear the word ‘no' -- or are still licking wounds over the last deal that went south.
Negotiating real estate deals like a big dog first requires that you forget yourself. You are not ‘whatever troubles you' or ‘some God's gift'. You should be dispassionate, detached. Peering in through the keyhole and watching 'to see what our hero will do next'.
Realize that the other parties may not be viewing the situation this way, and your hand will need to be all the more even to balance out the brewing madness.
Before passing Go, be clear about your client's needs.
What MUST your client have . . . and what can they NOT tolerate?
(Knowing those two answers for yourself helps a lot with life in general, too)
Negotiating like a big dog requires that you define key needs FIRST. Get the most important points secured for your client as quickly as possible. The more times the ball is returned to your court, the less steam the deal is running under.
When conveying offers or counter offers to your client, state the FACTS being presented and place the best possible interpretation on the actions of ALL-ESPECIALLY if your client begins to take personally the news from ‘the other side'.
NEVER speculate or remark about the ATTITUDE of the other party to your client. Be the voice of reason and never engage in negativity. Reassure your client of the ultimate goal. A win/win outcome is most likely to satisfy-at the time and down the line. To negotiate like a big dog, stay focused on getting that contract executed to the exclusion of all else.
Document everything. Use supporting data such as a CMA, City/County documents or inspection reports to clarify your position.
If you're going through a series of verbals (not recommended, but it happens) keep a painstakingly clear communication log, and recap with EACH go around. It is very easy to get lost and momentum that took time to build will be destroyed.
- 7-20 3:15 pm - Seller: $142,000, earnest money $2000.
- 7-20 10:30 am - Buyer: $134,000, 10 day inspection period, 45 day escrow.
- 7-20 3:15 pm - Seller: $136,000 and close in 30 days. "
Quid pro quo - offer something, then ask for something else. Just like in Monopoly! When ‘Baron' proposes to purchase your Boardwalk for 150 bucks, see if they'll throw in their Railroads too! And don't ‘jack up' the principals--underpromise so you can overdeliver! Until the contract has been signed and delivered, it's not a deal. Maintain calm hopefulness, reminding your client that we are approaching but have not yet made a deal. (I tell my clients "I'll let you know when you can get excited. Not yet. Not yet. NOW!")
With EVERY communiqué, START and END with APPRECIATION:
"Hey Joe, thanks for your help on this so far. My client will accept your pricing counter, but they also would like an upgraded home warranty and the refrigerator to convey. I REALLY appreciate your willingness to work with us. Please thank the seller for his cooperation."
If you hit a snag on one point, move to any unfinished ones and resolve them. Then return to the sticky one. With each small ‘win' negotiated, positive momentum builds. Once everything else is hammered out, revisit the impasse. Often, by then, the minds are ready to meet. Kindness and humility are EVERYTHING. Going in with attitude will shoot your foot clean off.
Here are some more negotiating tips that are more geared toward commercial transactions, but can also apply to residential deals:
- If you're asking the seller to finance, be prepared to make a larger down payment.
- If you are paying your own buyer broker, the seller may discount the asking price.
- If you or someone else extends a personal guarantee, the seller should offer better terms or be willing to carryback finance.
- If you need a longer escrow period, be prepared to make more than one earnest deposit at agreed upon points of time.
- An all cash transaction should give you room on the price!
- If the seller has complete and current information about the property such as inspections, complete financial records that make buyer due diligence easier, you may be asked to limit or eliminate contingencies.
- With a high or full price purchase offer, seller may be more willing to make repairs or warranty items beyond Close of Escrow.
Finally, I learned some solid negotiating tips from MY big dog, Luna:
- If the food doesn't make an impression, 'SOMETHING' sprinkled on it within eyesight should do the trick (giving it the 'personal touch')
- If the nose comes up UNDER my hand which is ON the keyboard . . . ENOUGH work--it's time to play! :) (sometimes stepping away for a 'cool off' works)
- "If I have to wear that sillyass Raiders jersey, we BETTER be going to the PARK!" (split the difference)
And with enough TLC . . . miracles can be brought about . . .