Best Techniques for Negotiating
Unlike most items on retail shelves, homes have no marked price. Everything is negotiable, from the listing price to the closing escrow date. As a result, good negotiators smile on their way to a new property, while bad negotiators dig deeper into their pockets.
Here are essential tips that will give you negotiating benefits during the home buying process. In the end, the journey to your dream home will be cheaper, easy, and faster.
Understanding Your Emotions During Negotiation
Human emotions play a role in the property-buying process. That’s why emotions run high in real estate transactions before concluding. Often, you may not realize when emotions drift into your transactions.
Below are three violent forces that trigger emotions during a home purchase:
Shelter - Your home is the castle where you rest after life’s hassles. So, when you feel insecure about your home, you are likely to become vicious.
Money - A home purchase is most likely the largest transaction you will make in life. Whether you are doing it for the first or last time, you’ll spend a significant junk of money. If anything threatens the security of your huge financial investment, your emotional intensity will probably rise.
- Motivation - There is an underlying motivation for every home purchase or sale that drives you. It could be the death of a spouse, workplace change, divorce, or marriage. You’ll experience emotional instability until you settle the driving force behind the transaction.
Controlling Your Emotions
You can’t eliminate emotions from a home purchase, but you can recognize and manage them. So whenever you experience emotional outbursts during the purchase, it is advisable to share your concerns with a therapist or trusted friend.
Here are four techniques to manage your emotions during the property buying process:
Before you buy a home, have a factual market analysis to compare prices and determine the fair market value for the home of your choice.
And the best way to do it is to work with a realtor to guide you through the process of price determination. Having a professional alongside ensures you remain objective and avoid emotional turmoil.
Be Prepared for Uncertainties
In your home search, keep your options open and never have a fixed mind. As much as you would like to have adequate information before making an offer, understand that you may not know everything.
Therefore, uncertainties will exist, but you need not worry as long as you get the correct information at the right time.
Have a Timeframe
Life changes do occur, but you should have a time frame to go through them. Whether it’s a marriage, death, or transfer, you shouldn’t procrastinate anything. A fixed timeframe helps you relieve unnecessary pressure and creates more time for the home purchase.
Maintain Emotional Strength
Whenever you want to enter negotiations, bear in mind that the deal may crumble midway. Let go if you can’t attain a satisfactory conclusion with the seller. Using your emotional strength, you can find other offers and better deals.
Negotiation Is Adjustable
The art of negotiation is not rigid. You won’t find a one-size-fits-all strategy that applies in every transaction. As a result, you’ll adjust your negotiation strategies accordingly.
Below are factors that will influence your strategy:
Your motivation as a buyer.
The seller’s motivation.
The listing price of the property.
Duration of the property in the market.
- Dealing from a buyer’s or seller’s market.
Examining Your Negotiation Style
In the real estate market, where prices are usually high, you can still get fair prices through suitable negotiation styles. So, which negotiation style works best? Well, it all depends on your personality, objectives, and your time frame.
Here are two main variations of negotiating styles:
Combative negotiators believe they can only win when the other side loses. According to them, negotiation is a war in that they must win and claim victory. This style works where the buyer’s or seller’s influence is vital in the market.
Cooperative negotiators believe they should both win. They focus on joint efforts to solve the problem instead of fighting an enemy. Everyone in the purchase transaction collaborates with other parties to find a solution that benefits both sides.
Cooperative negotiation is the best approach and works well in a fair market where buyers and sellers agree.
How To Handle a Competitive Negotiator
Some people are naturally competitive, and some agents are much the same. You’ll probably meet an agent who understands cooperation as working together in a team to defeat an opponent. Here’s the trick:
Try to Convince Them - You can try changing their mindset from being combative to the cooperative by using ways that benefit both of you. Shift their goal from defeating you to solving an imminent problem.
- Forfeit the Deal - If you keep negotiating without a positive outcome, you may consider walking out of the deal altogether. Some combative negotiators will not change at all.
Negotiating With Persuasion
Skillful negotiators do not apply brutal force to get what they want. Alternatively, they use persuasion and mutual agreement. Here are two concepts of negotiating with persuasion:
Phone Appointments May Fail
When dealing with an agent or real estate attorney, never accept offers made over the phone. A phone negotiation is susceptible to failure because sellers may easily decline. Be sure to meet an agent and talk about issues in real-time.
Written Contracts Are Valid
In a society where numerous life events preoccupy people, mere verbal agreements may work to your disadvantage.
If you wish to enforce a deal in a court of law, you’d better put it in writing. Be sure to include short, dated memos such as ‘June 5-the bank agreed we would get a 12% waiver’.
Negotiation Techniques - Way Forward?
The prospect of bargaining a property purchase can sometimes drain your sweat.
However, even in a high-demand and high-priced property market, it is still possible to get a decent deal if you use the right negotiating strategy.
It all starts with gathering property information. Once you and the agent have a good insight into the various aspects of buying a home, you can look into different neighborhoods and tour houses to see what’s available.
If you can’t strike a deal with a vendor, don’t be afraid to walk away and continue shopping.