Here are some thoughts about negotiation that I think most buyers, and some agents, have forgotten.
The only way to a successful sale is through a negotiation.
As with many big purchases, the act of negotiating is truly the only way that a sale will ever be consummated.
Get this: The best deal requires an effective negotiation but the scope needs to be defined. Does a buyer want the best deal on this house only, the best deal in a neighborhood, the best deal in a school district, or the best deal in the county? More options allow for better deals.
Most negotiations are NO fun for the buyer or seller, at all.
A saying in real estate is that Residential Deals are Emotional and Commercial Deals are Financial. Buyers have an emotional tendency and it is best to have someone represent them (via Agency) in the negotiation to prevent the other party from discovering that the buyer is barely holding it together.
Get this: This process is difficult but is considerably much less difficult than if a buyer and seller are forced to negotiate face to face. Objectivity is so valuable in these exchanges. The goal is not to walk away. The reason a buyer makes an offer is to purchase Real Estate.
Negotiations require multiple exchanges of information.
In my experience, a successful negotiation is usually achieved after 1 serve and 3 volleys. Pardon the tennis expression but most deals roll-out like this: Offer, Counter Offer, Counter to the Counter Offer, Counter to the Counter to the Counter Offer. Each time, a smaller piece of the division between the two parties is nibbled away.
Get this: If a buyer makes an offer and it is not accepted, she should not walk away from the negotiation if she really wants the property. Experienced sellers and their agents will NOT come running after the buyer to keep a deal going. They know that if the buyer walked away that easily, that person was not very serious to begin with.
Decide what the property is worth to the buyer, up front.
I have witnessed this at least once a month for the past year. Buyers will make an offer of 60% of asking price and be willing to pay nearly full price. As a buyer, it is important to decide what a property is worth to them, within a relative range, before an offer is drafted. After all, there is nearly a 0% chance that a seller is going to accept a first offer, as-is.
Get this: Insulting offers should only be sent when buyers have No interest in paying market price for a property. If a buyer is willing to pay nearer listing price, a better deal will be had by starting with an uncomfortable but not ridiculous offer price. Insulting offers are not received well by sellers, their listing agents, and even the buyers agents, unless it is stated upfront that it is an investor offer. And remember, investors usually do not make sales conditional on selling their existing house, leaving the drapes, financing, or bringing the wife or kids by to take a look.
