Negotiating Strategies When Buying Your Home

When negotiating there are a number of strategies that can be effective. You should try talking about common interests first. Do not just jump in with your desired price, as this could raise hostility in the other party. Try to avoid a competitive win-the-game approach, which is likely to be counterproductive.

Engage in empathetic conversation. Both parties need to feel that they are getting something out of the negotiation. Recognise the right time to stop negotiating. Successful negotiators can feel the tension building. Pushing the negotiations for that last dollar in the purchase price or that last concession has killed many sales. If you are too aggressive in trying to get what you want, the sale could fall through. Trust and compromise are both essential elements in any successful negotiation.

If you are the buyer you should listen carefully to the objections and arguments of the seller. Listen carefully to what is said, and listen far more than you talk. Asking the right questions can assist you.  A successful negotiator is adept at phrasing questions to identify a seller’s needs without causing offence. Give logical and practical reasons to support your viewpoints. Similarly, seek explanations for what the seller wants.

Do not be too quick to refuse an offer from the seller, even if you consider it to be totally unacceptable. Take time to reflect so that the seller believes you are taking him seriously. Always try to return the negotiations to the goals you hold in common with the seller.

Remind the seller of the property’s negative features. But do so with tact to avoid causing offence, which may cause hostility from the seller (especially if she is a homeowner), and derail the negotiation. Speak in terms of the market, and the features or decorating schemes that tenants prefer. But do not be insulting, and say things like ‘I’ll never get tenants in with awful wallpaper.’

Many sellers do expect to negotiate with buyers. So leave room in your offer for bargaining. Price is critical, but consider also the closing date, and any furnishings or appliances that may be come with the house. You need to be realistic, especially when housing is in strong demand. Do some research on similar properties to see at what price range they sell?

Try to avoid getting in a bidding war with other buyers. The competition can become heated and make it difficult for you to get a good result. You may be better off looking at other properties if your rival can afford a higher price.

Do not concede any point easily, as the seller may get the idea that you are a soft touch. Always hesitate before answering. If the seller wants something, reply with something you want. Whatever you end up agreeing, get it in writing. Oral agreements mean nothing.

Summary

• Finds things in common and be empathetic and tactful.
• Be prepared to compromise, but also make it clear you expect the same of the seller.
• Listen carefully, and ask the right questions.
• If the seller asks for something, ask for something in return.
• Think carefully about what the seller says before replying.
• Always get any agreement in writing.

Article correct at its author date: Jan 2007. Copyright Virtual Office Space, Any unauthorised reproduction of this article will be prosecuted to the full extent of the law. Credit Cards Australia.

If you would like to display this article on your web site please email us.