Buyers' Negotiation Tactics
You're searching the "homes for sale ads" because you want to buy a house. But you don't want to pay more than it's worth. In fact, you may be hoping to pay less than it's worth. How can you do that?
First, realize that the market will dictate your ability to "get a good deal." If you're in a "Buyer's Market," with an abundance of homes for sale, your chances are good. If yours is a "Seller's Market," with few homes for sale and even fewer that interest you, you may not have much chance to buy at anything but the listed price…or higher.
Second, consider your wants. If you've hunted for 3 weeks and only found one house that suits you, then you might not want to take the chance on it getting away from you. You might want to make your offer immediately - and at full price.
For our purposes, we'll assume that the market has a balanced supply of both buyers and homes for sale, and that you have two or more homes that will suit your needs. You can negotiate, and if it doesn't work out you won't be devastated.
Here are the rules:
- Keep your mouth shut! When you see a home for sale that you really like, you can express interest and ask more questions, but do NOT shout "I love this house!" This is an especially poor move if the seller or the seller's agent happen to be present, but don't even tell your own agent.
- Think about your offer, discuss it with others who will be sharing the home, and decide on your top price.
- Compare your top price to the asking price. Then structure your initial offer so that when you get to your price you will have come more than half-way to meet the seller.
- If it appears that there will be several counter-offers, make your first concession the largest. You might come up $8,000 the first time, $5,000 the second time, and only $2,000 the third time. This has the psychological effect of letting the seller know that he or she is getting close to losing the sale.
- When you've reached your limit, don't say "This is my final offer." There's something about that statement that offends and irritates… and you're seeking cooperation and agreement. Instead, if you get yet another counter, simply counter back with your last offer. Explain, gently, that it is the best you can do and that you hope they'll reconsider.
- Consider other ways to "give." Sellers do want money, but they want other things as well. Find out what those things might be and see what you can give.
- Perhaps you have a time-share in Mazatlan that you'd let them use for a week this winter.
- Perhaps you can let them stay in the house an extra two weeks after closing.
- Perhaps you own a large truck and you'll help them move.
- Perhaps you can pet sit their cat while they take a vacation after closing or while they're moving to their new home.
- Be prepared to walk away… and make sure that your agent knows you are prepared to walk away. He or she will convey that to the seller's agent, and thus to the seller. This is your strongest negotiating tool.
Don't use your agent as your confidant
You can ask his or her opinion about the price, and if you're got a buyer's agent you can ask for a market analysis - but do not share your own plans, feelings, or strategy even if you've got a buyer's agent.
Your agent will not deliberately "sell you out," but accidents happen and words slip out. Furthermore, attitudes show. If your agent is operating from the knowledge that you will walk away, that attitude will be conveyed to the other agent and/or the sellers. If he or she knows you just "Have to have" the house, that attitude will show as well.
Poker faces aren't just for playing poker. Use yours to negotiate a house purchase.
Click here to contact me if you have any questions.
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