Whether you are a home buyer or seller, a “rookie” real estate agent dreaming of your first sale closing, or an “old pro” real estate investor or sales agent, we always need to learn more about real estate negotiation tactics to become super-successful. That’s what makes negotiation, especially real estate negotiation, so challenging – there is always more to learn!
Having bought and sold dozens of properties over the last 37 years, I’ve probably encountered almost every type of real estate negotiator from bad – no, horrible – to super-successful. Fortunately, that horrible real estate negotiator who once represented me as a buyer’s agent has become a super-successful real estate broker. But I still recall my first encounter with him. Yes, we’re still friends.
Purchase Bob Bruss reports online.
NEGOTIATE WITH PEOPLE WHO REALLY WANT TO NEGOTIATE. If a property seller is just “testing the water” to see how high a sales price can be obtained, there won’t be much serious negotiation because the seller isn’t motivated. Or, if the buyer is just making a “low ball” purchase offer to see if the seller will accept, it’s often a waste of time if the buyer isn’t highly motivated to buy.
This negotiation principle of motivation applies to all fields. If you are a property seller, you want to deal with buyers who need to buy. However, this principle also applies to motivated buyers who must buy from sellers who aren’t highly motivated. In such situations, it is important to become “creative” with your negotiation strategies.
Sometimes it is even prudent to use a third-party negotiator when the situation stalls. This situation often occurs in real estate brokerage offices when a sales agent is unable to negotiate a transaction. A third-party negotiator, usually the office manager, is then brought in to join the negotiations to help move the situation along.
Let’s emphasize (1) whenever possible, deal with highly-motivated buyers and sellers, and (2) if the other party isn’t motivated, maybe they are just “distracted” and really want to negotiate a good deal if you are persistent. Sometimes, the seller obviously wants to make the sale, and the buyer wants to buy, but (who knows why) the seller doesn’t bother to submit his/her bid promptly to a waiting eager buyer (although I try not to act eager because then I know the price will go up).
My friendly but creative fax motivated him to negotiate by offering a substantial trade-in allowance. The supplier didn’t have to give us any trade-in allowance so we were very happy to save a little and get rid of the old product (which the supplier will probably resell at a handsome profit). Yes, I probably could have negotiated a lower price in face-to-face discussion with the other party, but I know there is still plenty of profit margin for the supplier just in case there are any unexpected installation problems.
I’ve learned, especially when negotiating with contractors, if their first bid is acceptable, it doesn’t pay to negotiate further because they will then usually cut the quality of their service. However, this rule doesn’t apply if the negotiation topic is a standard product or service – such as a new automobile. That’s a situation when negotiation strategies can pay off with big savings if the quality won’t be reduced when the price is cut.
Negotiation persistence pays off! I know real estate buyers who have “hounded” prospective sellers for years before they decided to sell that property to that buyer. It is amazing how, if you repeatedly express an interest in buying a specific property, the owner will eventually, someday, become a motivated seller.
For this reason, it pays to “keep in touch” as a negotiation strategy to buy without competition from other buyers. Real estate agents also use this strategy to get listings by keeping in touch with homeowners persistently, month after month, often for many years until the homeowner is eventually ready to sell.
(For more information on Bob Bruss publications, visit his
Real Estate Center).
***
What’s your opinion? Send your Letter to the Editor to opinion@inman.com.