15 Tips for Negotiating Your Purchase Price
When sitting in front of a seller, negotiating a purchase price that is acceptable to both of you can take time and be a bit intimidating for both parties. Here are some of the things we use that make the process much more simple and successful for everyone involved. I hope you’ll find them helpful, too.
When negotiating with the seller, always:
- Understand the goals and desires of all parties. It’s important that you help solve the seller’s problem, but you can only do that when you understand what the problem is. If they’re selling, there’s a reason and, interestingly, it usually has nothing to do with the real estate. Some of the more common reasons include:
- job loss
- Determine your client’s alternatives to a negotiated agreement. If not this offer, then what?
- Come in having done your research. Know what the house is worth after it’s repaired and know what’s going on in the neighborhood so you can negotiate intelligently. For example, sellers often want to sell their house for the price the one down the street sold for unaware that the one down the street was updated when theirs is not. Some things you need to know include:
- what’s for sale in the area, for what price, and the condition it’s in
- what’s sold in the area, for what price, and the condition it was in when it sold
- days on market for properties that sold nearby
- Come armed with the facts. Always discuss facts, not emotions.
- Really listen to what the other person is saying and repeat back what you’ve heard to validate their opinions.
- Ask questions, gently, this is not an inquisition.
- Listen way more than you talk!
- Stay flexible – you may need to alter your position to reach an agreement. Be willing to concede before digging in your heels and, again, don’t get emotional.
- Going in, know what your concessions can be. Don’t give up more than you can afford just because you got caught up in trying to make the deal work. Know the most you can offer before beginning the talks.
- Don’t let ego get in the way of a settlement. Again, stick to the facts. This is business, not personal!
- All parties need an agreement they can live with and need to feel they got something out of the negotiation that was a “win”.
- One of the keys in any negotiation is to ask open ended questions:
- “Where will you move?”
- “What will be the best thing for your family about moving?”
- “If we can’t come to an agreement on price, what do you plan to do?”
- Never be the final decision maker. “My numbers show that I should be able to offer _________. I don’t know if my office will approve this amount but if I can get approval, how would that work for you?”
- You may want to explain to your client that you have other properties to view and can only afford to purchase a certain number this month. Let them know that theirs may not be the one you end up purchasing.
- Remember, the customer in front of you is not the only one you’re speaking to. Whether you can help this person or not, they will be telling others about their experience with you – their friends, neighbors, co-workers, and family members. Be helpful; be courteous; be honest. A great way to build your business is through referrals.
What can you add to the list? What have you tried? How successful are you at negotiating with sellers?