Bargaining is a subtle art in real estate and the way you handle the back and forth that happens during contract negotiations can make or break a sale. Skilled negotiators can usually find some common ground that satisfies all parties and helps close a home smoothly, but if you’re not careful, a wrong move could cause a deal to crumble for the seller or buyer.
Here are some negotiation tactics buyers and real estate professionals should avoid:
- Lowball offers: Going far below market value when you make an offer damages your credibility as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept, and if you’re not even approaching the low end of that range, they won’t even consider the offer. This can leave a bad taste in their mouths in regards to you as a buyer and cause them to not want to accept any other offers you may make. Keep this in mind when you want to make a low ball offer and your agent advises otherwise. They have seen the downfalls of this tactic many times and are just looking out for you best interest.
- Incremental negotiations: Don’t continue to go back to the seller with small increases in your offer ($1,000 or less). Fighting over a small dollar amount makes you look bad and makes the seller think you will be a difficult buyer to work with. The constant back-and-forth can grow tiresome and lead the seller to consider other opportunities.
- “Take it or leave it”: Try not to draw a line in the sand with your initial offer. The seller can get defensive and consider other offers if you immediately show that you’re unwilling to budge. Even if it’s true, don’t make a show of it. People do not like to be given ultimatums and will not feel happy if they feel you are painting them into a corner.
- Nitpicking after inspection: Obviously if the inspection reveals a major issue, it should be factored into the final sale price. But insisting on a lower price for every minor repair can put negotiations in a stalemate. Buyers must understand that unless they are buying a newly built home, every house has it’s little quirks of wear and tear from years of use. Combing the house with a magnifying glass and demanding it be in perfect condition could lead to the seller refusing to do ANY repairs, therefore leaving you as the buyer to do them all yourself, or walk away from the home that you possibly really like.
- Asking for more, more, more: Some buyers will request that the sellers throw in add-ons like furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason to build up resentment and think that you’re being greedy. There should be realistic give and take on both sides of the contract to help foster a good relationship during your escrow, and help make everything go smoothly.
These are just a few things you want to avoid while negotiating a contract in order to not kill the sale. Remember that if your agent advises against these tactics, they are speaking from experience and out of their best interest for you.