Real Estate Contract Negotiations Like a Pro

Real Estate Contract Negotiations Like a Pro

 

When buying a home you want to get the lowest possible price and close on the house within a reasonable amount of time so you can move in. The seller wants the most for the home he or she can get, so it takes some negotiation to make it all come together for both parties.

 

1. Let the seller know what you need or expect in a clear and reasonable manner. Sometimes buyers submit letters to sellers depicting why the property is not worth the asking price and pointing out the faults. This is a sure way to start the negotiations off with a defensive seller. It would be best to anchor a reasonable price, while continuing to remain polite and respectful of the sellers' home.
2. Be prepared to solve any repair, title, survey or loan problems fairly so there are no future problems to be addressed at closing.
3. Never respond to offers emotionally. This style of negotiating can turn the seller angry or defensive and can escalate into negative comments, table pounding and threats to walk out on the offer.
4. Keep your cool. Never argue. Arguing can sometimes make the seller want to work against you instead of working with you.
5. Don't be too quick to respond. Don't ignore or respond to the sellers' arguments or statements immediately. Make it known that you are listening carefully and considerately, but don't reject or accept any offers until you have had time to carefully consider them.
6. Have any unclear portions of the proposals clarified completely.
7. Never discuss personal issues which involve the seller or buyer, such as an urgency to move in or some particular financial status.
8. Let trust increase the buyers leverage by; 
   –>listening and understanding what the seller has to say;
   –>convey an appreciation or admiration for the sellers home decorating and gardens;
   –>respond to counter offers within a reasonable time frame.  

    

9. Find a common ground with the seller. This can be a very powerful tool in the event of multiple offers. Sometimes a seller may select a contract for personal reasons, like if the buyer's family reminded the sellers of themselves when they bought a home with their young children, or just by sharing the same religion.
10. Understanding your leverage as the buyer. The more the buyer can find out about the seller's needs, the better chance the buyer has to find solutions in negotiation. The buyer must be able to appeal to the seller's concerns. For instance, if the house has been on the market for over 300 days, the seller will have a lot more leverage than they would have with a brand new listing. If the sellers time frame is forthcoming, then the buyer can meet it with some leverage, unless the sellers have multiple offers.

 

Most buyers usually offer less than the listed price of a house. So, how much under the listed price should you offer? That all depends if the house is listed in a strong seller's market and the market analysis of the recent sales in the neighborhood from where the house is being sold. The buyers should do their homework before submitting an offer. They might risk offending the seller and have their offer rejected immediately if they don't.

 

If there are multiple offers on one property, disclosure is favored among all parties. However, the seller or agent representing them will make the final decision as to how the offers will be handled. The seller may disclose the terms of one offer to stimulate another buyer to submit a better offer. Normally the procedure for multiple offers is to notify each party of the multiple offers that have been received. Each of the parties is then given an opportunity to amend their offer and submit it within a certain amount of time. After all offers are on the table, the seller is once again free to review the amended offers and select a buyer to negotiate with. Sellers are in no way obligated to accept the first offer that comes in. Any offer selected may be countered, negotiated, or accepted as is.

 

Have you ever encountered a bad contract negotiation experience? Tell us about it with your comments. We'd love to hear from you.