Successful Real Estate Negotiations: Win-win tips
Real estate in Vancouver, Washington and the surrounding areas is hot, hot, hot with the median sales price in Clark county hitting $334,800 in July 2017! There is little inventory and the competition is fierce. Oftentimes some creativity in negotiations is the only way to get the deal to the closing table.
Based on our experience, we have found the following tips to be helpful.
Before entering into real estate negotiations it is advisable to have a clear picture of “must haves” so that one can be more flexible on the “would like to haves.”
Everyone wants to get the best deal possible – sellers would like to get the highest price for their homes while buyers would like to pay the lowest price possible. Sellers don’t want to leave money on the table and buyers don’t want to pay more than they believe a home is worth.
“Worth” can be very subjective. For instance, perhaps the sellers bought the home because it had a wood-burning fireplace in the basement and they saw value in that, it was important to them. A buyer might see the wood-burning fireplace as old-fashioned, out-of-date, and something that has to be dealt with, in other words the buyer does not see the value that the seller sees.
This can be the case with several features of a home. A seller may have worked hard updating the home in a manor that suits his/her tastes, but a buyer may not have those same tastes.
It has been said that real estate transactions often bring out the best in people and the worst in people.
Even though a person wants to keep everything in the transaction unemotional and business-like, it’s often a difficult thing to do. People make their marks on their homes and take pride in them. However, a buyer wants to be able to visualize this being his/her own home.
Without careful consideration, real estate negotiations can cause some hurt feelings and wounded prides. Once this happens, it’s tough to overcome.
We have experienced transactions where the seller refuses to sell or the buyer refuses to buy just because they somehow felt slighted by the other party.
So, how can buyers and sellers have successful negotiations where each party feels good about the transaction?
It all starts with a “win-win” mentality.
Win-win definition according to negotiations.com:
"A win-win negotiation settlement is an integrative negotiated agreement. In theory this means the negotiating parties have reached an agreement after fully taking into account each others’ interests, such that the agreement cannot be improved upon further by any other agreement. By definition, there are no resources or ‘gold’ left on the table and all creative options have been thoroughly exploited. “Win-Win” has its roots in Economics Game Theory."
Many people believe that the main negotiation in a real estate transaction is the price, but there are actually three main negotiating points: Price, terms, and possession.
Price is rather obvious, but how about terms? Say for instance, you would like for the sellers to carry a contract for a period of time. Okay, is there something you can give in return? Could you offer a little more money for their troubles?
Possession is another important negotiating point. Do the sellers need a little extra time after closing to get moved? Are the sellers waiting on new construction to be completed? If so, perhaps you may get a better price if you are willing to wait on taking possession.
"What's the other party's big why?"
In this age of technology and separate agents for buyers and sellers sometimes the nuances of the transaction brought about by the people in the transaction can get lost.
If at all possible, try to learn the other party’s motivation for selling and for buying. If we begin with the idea that there is a person with a story behind that listing agreement or purchase and sale agreement rather than a sheet a paper sent for digital signatures, it may make the entire negotiating process go much more smoothly.
The “old-fashioned” notion of the personal approach holds true today. It has been our experience that clients who feel they are heard, understood, and valued for what they bring to the table are more likely to be open to negotiations.
It’s very beneficial to have an experienced real estate agent on your team to help navigate the negotiations. Real estate is much more involved than just matching a buyer to a seller and having that experienced negotiator working on your behalf can help ensure your needs are being communicated to the other side – that you are being heard and that you have someone working specifically for you.
If you’re ready for an experienced negotiator to be on your team send us an email and we’ll do a stellar job protecting your interests.
Ron and Sherry Patterson
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