The Best Way to Negotiate
Negotiating for the purchase of a house can be difficult, stressful, profitable, exciting, and collaborative all in the same transaction. The feeling you have during negotiations depends on how you react toward an unresolved situation. Some people love to negotiate and actually get a thrill from the experience, while others get tense and stressed at the mere thought of negotiating. But regardless of how you or the other person feels about it, the only successful way to negotiate is when both parties can find some common ground. If you can’t agree, then there is no sale.
There are personalities who are very aggressive in their approach – buyers who make offers way below market value, and sellers who demand full price. Usually these people find out the hard way that although you can ASK for anything, the other party has the option of turning you down. Worse yet, when buyers and sellers start out negotiations more than 10% apart, the communication easily breaks down and there’s a very high probability that they will never reach a consensus. Thus, no sale.
It’s not so much about “insulting” the other party, it’s just that a seller (who is not under stress), has no logical reason to take an offer below 10% - especially if the house has been on the market for less than 30 days. Logically, a seller would lower their asking price by 3-5% to see if that opens the door for other buyers, before they would accept 10% less. For buyers to successfully negotiate with a seller, your mindset should be – let’s make an offer that shows we are interested in the house, not just tire-kicking. Sellers almost never give a good counter offer to a bargain shopper.
For sellers, the mindset is more about realizing that the buyer is our friend. Don’t be mad at the buyer who makes the offer lower than your asking price. If you must be angry, be angry with all the other people who have already been through your house and didn’t like it enough to even make an offer! The listing or asking price that you put on your house is not the value of anything. It’s a made up number that either motivates a buyer to make an offer or to pass on by. Realize that the buyer and the seller are very much alike! They BOTH want this house – they just initially will disagree on what the sale price should be.
Success for both people is the responsibility of both people to find what the fair market value of the home is – and the fair market value of any house is the one price that they both can agree on. So no matter how the numbers crunch, if you’re serious about getting what you want, your focus needs to be on cooperation and compromise in order to achieve that “win-win” result.