Yesterday I published 10 styles of negotiation.
Here are some additional tips, many of which I learned as an arbitrator and settling lawsuits.
The Do Not Do’s of Negotiation
1. Never “tip your hand” on anything
Don’t say that you have to move, got a new job or hit the lottery. Never say you love the place. Play it cool. It’s the same when you like a girl. You don’t tell her. Same with buying a house. Keep your mouth shut.
2. Don’t bring your relatives to see the house after you’ve seen it.
That is a sure tip off to the home seller that you like the house and want to show it off to the family.
3. Do not argue or get emotional during negotiations.
Once emotion enters a room, logic leaves and you will rarely make a deal. In fact, the seller may kick you to the curb.
4. Do not reject counteroffers out of hand
Because it is often seen as disrespectful and it will create defensive posturing. Acknowledge the home seller’s price but use the methods above to suggest your terms are reasonable under the circumstances and in the seller’s interest to accept. Point out the advantages to the seller if you offer cash and a quick sale, for example.
5. Do not criticize a home.
Folks are emotionally attached to their homes. Compliment the owner on their home where you can but don’t gush. You want to build a rapport so the home seller will be willing to negotiate with you instead of calling you a jerk he’d never sell to for any price. Pros say there are 3 needs in any negotiation: control, inclusion and respect. Make sure you do not take these from the seller.
6. Do not offer against the asking price.
Get the home seller to offer another asking price. So instead of offering 10% below asking, say “can you do better than the asking price?” Now you have a new lower asking price to which to make your offer.
What negotiation tips do you have to share? Are any of them particularly effective?
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Number 4 is what boggles my mind — That’s one of the first things I tell clients — always counteroffer, no matter how low the original offer, yet some people become indignant, still, and say — I’m not even answering that.
March 26th, 2008 at 4:55 am
Joe I could not agree with any of these points more. One thing I do on a regular basis: try to present my offer in person…this becomes harder and harder as sellers lately seem to be out of town already but I do try to do this.
Secondly, I provide a letter about my clients, or sometimes I ask them to write the letter themselves. Personalizing it can sometimes help start things off on a good foot. This is Ohio and that seems to work. Lastly, when negotiations seem to need an extra push and the people involved seem like this would work, I have gotten people into a room, kind of like a round table with all parties present and we work out the final details together. I’ve only done this twice but it worked both times.
March 26th, 2008 at 5:09 pm
That is great advice Carole. Thanks for sharing.
Agreed Mike. The longer the lines of communication remain open the better the chance for the parties to reach an agreement. The fact that any offer is on the table is an indication of interest that should be developed, if at all possible.
March 27th, 2008 at 3:44 pm
I deal with #5 more than anything. Buyers always think telling the seller that they are offering less because he picked bad paint colors will help in negotiations. Insulting the sellers choices usually just annoys the seller and makes its less likely they will accept a lower price.
March 28th, 2008 at 12:27 am
Yes, so true Ki. Sellers can be easily turned off to a buyer that insults them or their home and refuse to negotiate because of it. Home selling/buying is an emotional affair, there is no doubt about it. You have to be diplomatic, tactful and respectful.
March 28th, 2008 at 12:30 pm
I’ve recently run into buyers that are not willing to negotiate at all. It’s definitely a trend in the buyers that I represent.
May 1st, 2008 at 3:18 pm