5 NEGOTIATING TACTICS THAT CAN KILL A SALE
Sunday Mar 12th, 2023
5 NEGOTIATING TACTICS THAT CAN KILL A SALE
Orignally From Dec 23, 2018 (negotiating-tactics-can-kill-sale-12084)
By Steven M Vertz
When it comes to real estate, skilled negotiators can usually find some common ground to satisfy all parties. A not so good negotiator can cause deals to fall apart due to using the wrong negotiation tactics.
The following are some negotiation tactics that buyers (or your Realtor or agent) should avoid:
Make a Realistic budget and make sure you stick with it. Be proactive by having a plan before you make an offer!
Lowball offers are going to make a seller angry! Would you want someone offering 10 or 20 thousand less than what you are asking for your property?
Don’t make things harder on yourself!
For Example: When similar houses on the CMA (provided by Realtors like me) in an area have been selling for $145K, don't make an offer at or under $135K…unless the home is in need of some major updating (e.g. roof, basement repairs, etc.).
This will more than likely end badly for you. This is true for any buyers; loan buyers and cash/investor buyers.
Going well below the market value of a home will damage your credibility as a good buyer, and you can easily insult the seller!
If you can’t even come into the low range of what a seller has in mind, they probably won’t even consider your offer. Just plan on having your offer rejected or being ignored altogether!
It is better if you are represented by a Realtor under buyer agency when writing an offer. This allows your Realtor or agent the ability to let you know if they feel the home is priced right. Otherwise, they are supposed to just say offer your highest and best offer! A good Realtor will let you know if they believe your offer will be considered too low.
You don’t have to listen, but it is in your best interest to do so.
Do not play a game of going back and forth with a seller using little increases around $1,000 or less than a seller's counter offer.
The seller may be looking forward to other opportunities and stall you in order to see if they get another offer in.
If that happens, your offer would be rejected or you could be caught in a bidding war.
Using the example above, the sellers could have been prepared to entertain any offer at or above $140,000 on a $145,000 home.
However, your back and forth negotiations bought the seller more time to get another offer in.
Now you find yourself in a bidding war. You might have to decide if you really still want the house, because you have a good chance at losing without a $150,000+ offer.
An escalation clause could help you still win, but still at an amount higher than what was initially possible.
This would not be considered a “win” for you!
Giving the seller a “Take it or leave it” ultimatum:
Even if you don’t plan on budging at all, keep it to yourself! Do not go into an offer letting a seller think that you are drawing a line in the sand!
This is another way to easily annoy a seller, and make them much more defensive. A seller may consider another offer on the table to yours for this reason alone.
I have seen some sellers counter back to their list price immediately after hearing that a buyer doesn't plan on any negotiations.
They may also just reject or ignore your offer, hoping a better one comes around.
Don’t nitpick everything in the inspection:
A home inspection is very inexpensive (especially for what you’re getting).
A good home inspector will be able to point out everything that’s not 100% on the house.
There will be some problems with brand new homes too, but some minor problems are not what you are going to focus on.
If any major issues are present, then it should be factored into the deal. You should be able to negotiate some repairs or possibly get the home at a reduced price.
However, don’t try to negotiate due to minor things like loose door knobs, handles, scratches on something, etc., or things that have already been disclosed by the seller.
You will want to know what true defects are present. The home inspections will focus mainly on the structural, mechanical, and electrical condition of the property, but will still include all the little things as well.
Whoever you hire should check the roof, chimney, gutters, windows, doors, porch, heating, a/c, electric plugs and fixtures, floors, walls, ceilings, bathrooms, kitchen, foundation, etc.
You don't want an unstable foundation or a home that could catch on fire from a hack wiring job.
Don’t keep asking the seller for more after the offer:
Yes, you probably do want some of that nice furniture or appliances to stay, but ask for those things in the original offer if you want them.
Keep in mind that a seller will usually include appliances and/or personal property in the listing if they are willing to part with them.
A seller may feel resentment, and think that you are being greedy if you ask them to leave items that are not included in the offer (and original listing) without paying for them.
This is when a bill of sale can come into play.
Just remember, your chances of success in negotiations are much greater if you listen to your Realtor (if you have one), and you play nice!
Wizards of Real Estate
Phone: (920) 209-1079
~ RedBeard, The Largest Beard in Real Estate
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