When it comes to buying a house, everything is negotiable from the commission to who pays how much on the fees to the price. Negotiating a transaction effectively can save you time, money and headaches.
Tip #1: Knowledge is good
Yes, it is vital to know things like how long the house has been on the market and what other houses in the area have sold for, but it’s also important to know why the owner is selling. If they are relocating for a job, that could mean they’ll take a lower offer with quicker closing.
Tip #2: Know your price
Whether you’re buying or selling, knowing what you’ll take or what you’ll give is one of the most important things in the negotiation. Otherwise you’re more likely to concede more than you should.
Tip #3: Remember… it’s not personal; it’s business
Even in “The Godfather” it was business when they went after Vito Corleone. No matter what, keep calm and remember that it’s just a business transaction. Check your ego at the door.
Tip #4: Let them start
Many negotiators make it a point to never make the first offer. It allows you to define the mid-point. In many cases, their first offer may be better than what you would have asked for in the first place.
Tip #5: Set an expiration date
By putting a deadline on your offer, you eliminate the seller’s ability to gather other offers. It shows you’re serious about buying and gets negotiations started quickly. Ask for a response within 24-48 hours.
Tip #6: Use the silent treatment
Negotiating is all about talking, right? People are uncomfortable when no one is talking, but this is exactly why you should use silence to your advantage. They will often interpret silence as disagreement and will break the silence by revising their offer or offering a concession.
Tip #7: Give the reason
No matter what the sticking point, when you decline the other party’s request or ask for some sort of concession, it’s always more effective to give a reason why. It negates their ability to counter.
Tip #8: Ask for financial concessions
If you’re close and seller won’t budge any more on price, you can ask them to pay for all the fees, including city transfer taxes, inspections and appraisals, which can help you alleviate being cash-strapped at closing.
Tip #9: Be nice
This kind of goes along with “it’s not personal,” but realize that if you’re nice, people are more likely to give you what you want. Being respectful and pleasant, even when asking for everything you want, increases the chances of getting it.
Tip #10: Be willing to walk away
It’s difficult when you’ve found a home you love in a great neighborhood, but you have to be willing to end negotiations if you don’t get what you need from the deal.