Every real estate transaction is unique. Both sides – buyer and seller- want to feel that they got what they wanted, or a reasonable compromise was reached. So how do you get the most from a transaction? Past history indicates there are a few key points that play a role in successful real estate negotiations.
1. What kind of market are we in?
Are we in a “buyers” market a “sellers” market or a market where supply and demand are roughly equal? Ideally you want to be in the market that favors your role as a buyer or seller. Because all properties are unique—it is best to utilize any advantages the situation presents. For instance, if you are selling a property in a desirable neighborhood with very few sales, you may get a better variety of offers. Or, if you’re a buyer who is positioned to close quickly, that might be a good negotiating point when dealing with a seller who just got new job 2 states away, and needs to move fast.
2. Who has the upper hand?
If you are selling due to financial hardship and the buyer knows it—you may have less clout in the bargaining process. On the other hand if you’re among six buyers clamoring for one house, you have very little power – the seller will usually choose the offer with the highest price and best terms.
3. What are the details?
It is good to keep an eye on recent home sale prices. But look beneath the surface at some differences: For example maybe the houses are the same, and the sale prices are the same, but are the deals the same? Probably not. Because one seller may have agreed to paint the house, replace the roof, buy a new refrigerator, and pay some of the buyer’s closing costs. The second deal, well – maybe the seller made no concessions. So the first house was actually sold at discount – the purchase price less the value of the roof repairs, closing credit, and other items. If you’re a buyer, this is the deal you want. If you’re a seller, you would prefer to be the second owner and give up nothing. It’s all in the negotiations.
4. Show me the money!
Here are a few ideas that impact the financial angle: Has the buyer been pre-approved or prequalified by a lender? Basically pre-qualified buyers are a better risk for sellers than those who aren’t. If the seller accepts an offer from a buyer with an unknown or questionable financial picture, it’s possible the transaction could fail because of the buyers inability get a loan. Meanwhile, the owner may have lost the opportunity to sell to someone who is a qualified buyer. Another factor is, the lower the interest rate, the better it is for potential buyers. More buyers equal more demand, which is good news for sellers. Of course, high rates or even rising rates may scare buyers from the marketplace, which is not good for anyone.
There are many factors and angles at play in every real estate transaction. As your Realtor, it is my job to negotiate for your best interests. Call, email, or text us today, and let our negotiating experience work for you!