Negotiation is a subtle art in real estate, but skilled negotiators can usually find some common ground that satisfies all parties. On the other hand, using the wrong negotiation tactics can sink a deal pretty quickly. A good Realtor® will negotiate on your behalf to make sure you’re getting a fair deal while ensuring everyone is happy with the result. Ultimately, though, your Realtor® will follow your instruction, so here are some negotiation tactics to avoid as a buyer:
- Lowball offers: Going far below market value when you make an offer damages your credibility as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept, and if you’re not even approaching the low end of that range, they won’t even consider the offer. Many markets across the US are favoring sellers as inventory is still low (this is especially true in Portland!), so a low offer will likely get beat out by a higher one anyway. Your agent should run a comparative market analysis after you decide to write an offer to find out what market value is. From there, you can settle on a price that makes sense for the value of the home as well as fits with what you’re comfortable paying.
- Incremental negotiations: Don’t continue to go back to the seller with small increases in your offer ($1,000 or less). The constant back-and-forth can grow tiresome and lead the seller to consider other opportunities. Typically, sellers have a timeline in which they need to get their home sold, and so the time spent haggling is time that they could be under contract and on the way to closing. I find that trying to meet in the middle will usually result in reaching an agreement everyone feels good about.
- “Take it or leave it”: Try not to draw a line in the sand with your initial offer. The seller can get defensive and consider other offers if you immediately show that you’re unwilling to budge. Even if it’s true, don’t make a show of it.
- Nitpicking after inspection: Obviously if inspection reveals a major issue, it should be factored into the final sale price. But insisting on a lower price for every minor repair can put negotiations in a stalemate. With the exception of a totally new construction, every home is going to have some issues that you’ll have to address. If it is not a major system in the home, or directly affects the livability (like a leaky roof), chances are you’re better off dedicating a weekend to Home Depot after closing.
- Asking for more, more, more: Some buyers will request that the sellers throw in add-ons like furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason to build up resentment and think that you’re being greedy. If there is a specific fixture that you really want, like a chandelier or hot tub, it should be written in to your initial offer so the seller is aware upfront.
At the end of the day, it’s important to remember that there are two sides to every transaction. While you shouldn’t bend so far that you end up unhappy, realizing that each side will likely have to make some concessions to come to a mutual agreement can save a lot of headache and heartache in the long run.