How to Negotiate Like a Pro
Learn from these common buyers' mistakes and negotiate a price that's a winner for everyone involved.In the interest of preserving the peace, why not learn from the mistakes you made the first time around and negotiate a deal that’s a winner for all involved? Good negotiating isn’t about hurting the other side; it’s about knowing the seller’s motivations and your own, and striking a deal that satisfies them both as fully as possible.
Mistakes beginners often make and how to avoid them:
1. Focusing on Price Only
Terms, baby, terms. You can negotiate quite a bit of value into a contract besides the number on the bottom line, so think about your preferred closing date, whether your seller would be motivated to pay closing costs, any cool items you’d like the seller to leave behind, options/upgrades for a newly constructed home, and so on.
2. Moving Slowly
Get your financing in order from the get-go, and be ready to pounce on the deal you want. Make a firm, direct and quick offer to a motivated seller, stipulating a time limit for the response, and you just might get the terms you request.
3. Responding on the Spot
OK, you want to move fast, but never respond verbally to an offer or counteroffer. Ask for it in writing, and respond in writing. Move as quickly as possible, but don’t agree to anything on the spot.
4. Making a Lowball Offer “Just Because"
If you want a seller to knock a chunk off the price, have good reasons besides the amount of money in your bank account. For example, the market’s down, the foundation needs repairs, other homes in the neighborhood sold for substantially lower. Be prepared to justify your request.
5. Assuming Anything Is Off the Table
You’ve probably heard, for example, that there’s no wiggle room on pricing for new construction, so don’t even ask. Or you might think that there’s no way the seller would leave behind that fabulous grandfather clock. Baloney. Ask for what you want -- but be willing to be flexible on other terms to get it.
6. Taking Stuff Personally
The seller reacts to your offer by 1) turning purple and uttering expletives, 2) dripping with condescension and calling you “sweetie,” or 3) pretending he doesn’t understand it -- “Did you really mean this number right here? I’m sure you didn’t, right?”
Some experienced negotiators will try to jar you on purpose; others may just be jerks. But stay calm and be brutally direct. Ask the seller to be specific about any terms he’s unhappy with and to explain in plain English what he’d like instead. If he won’t, be prepared to walk away. Your philosophy: It’s just business, and there are plenty of other houses from which to choose.
Sure, keep your cell phone on, but eat wisely, sleep well and remember to exercise. You might just survive the negotiating process with your sanity intact.