1. Set your priorities early
Knowing what’s really important early on is critical to getting a great deal. Ultimately, the bar for whether your negotiation is successful is determined by what the home and contract terms are worth to you.
2. Know your local environment
The best negotiators are the most informed. To get the best deal when buying, ask your agent to provide data on these critical local factors:
• Recent sold prices for similar homes
• Average difference between asking and sold price
• Average days on market for similar properties
3. Get the inside scoop
Don’t make a blind offer. Make sure you ask your agent to explain market data and how the numbers relate to your transaction. In addition, he or she may know valuable transaction specifics that can strengthen your position, like whether or not the sellers need to move quickly.
4. Problem solve for all parties
Traditionally, negotiations were a two-way power struggle between buyer and seller. Now, buyers have to consider banks, appraisers, and some-times even property associations that all have their own guidelines and needs that impact the terms of the deal.
It’s more important than ever to approach your negotiation as an exercise in problem solving, with the aim of meeting the needs of as many p arties as possible.
5. Bond with your lender
Too often transactions fall through at financing. Work in advance to make sure your deal doesn’t die at closing. For buyers this means working with your agent and mortgage broker to secure back-up financing in case things go awry with your first loan.
6. Manage your own mindset
Remember, when negotiating, the least emotional parties usually have the most power. The more attached you are to a particular home, price point, or set of terms, the more likely you are to panic or cave in on important points, like price, unnecessarily.
Lean on (and listen to) your agent for objective support throughout the transaction. It’s their job to help ensure you’re making the best business and life decision.
7. Learn (and accept) the “negotiables”
To manage stamina during the negotiation, find out early what is and isn’t within each party’s control.
Your agent can help you stay clear on this and avoid the emotional exhaustion that results from trying to haggle in areas that aren’t really negotiable (e.g., the bank’s bottom line, cosmetic repairs on most foreclosures, etc.).
8. Minimize time pressures.
When buying or selling a home, moving dead-lines can cost you thousands of dollars and cause you to make needless compromises because you’re in a rush.
When buying or selling, here are a few ways to buy yourself time:
• Plan and search early when possible,
• Locate temporary rentals, and
• Develop a plan-B for closing day in case you encounter last-minute hurdles.
9. Act quickly – not impulsively
When you find ‘your’ place, make an offer. When you get a counteroffer or response, respond to it. In real estate, time is always of the essence, and prolonged hesitation often results in lost opportunities. There’s nothing wrong with sleeping on a decision overnight, if the ‘right’ move is unclear. But keep in mind, there are competing buyers and changing interest rates lurking, which can change the whole bargaining dynamic at any minute.