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Savvy Real Estate Contract Negotiation

Written by Jennifer Allan on Wednesday, 07 December 2011 6:00 pm
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Many real estate agents proclaim that they "hate the negotiation part of real estate." But while negotiating may not be the most important skill we possess (although then again, it might be!), it's certainly something we should be reasonably competent at, and therefore, not hate the thought of!

And becoming a reasonably competent negotiator really isn't all that difficult - a lot of it is common sense and common courtesy. Here are some tips to help your client get the best possible deal without making enemies in the process!

When negotiations get hot and heavy, withdraw. Dead silence from your side. Don't tell the other agent you're "thinking about it" or going to "sleep on it," just stop all communication until the next day. Very unsettling to the other side, and keeps your client from getting carried away by the emotion of the negotiation.

Never believe anyone when they say "This is our best offer" or "This is our bottom line.” No one knows what their best offer or bottom line is until they've either signed an agreement, or rejected one. When the other agent presents a counter-offer to you and tells you "this is the best we can do," pay no attention. If your client still wants the house (or still wants to sell), counter back. More often than not, the negotiation will continue beyond the previously stated "best" or "bottom." Never let the deal die on your side.

And related, never ask your buyer or seller for their bottom line or highest-and-best. If you do, you force them to commit to a figure and they might be uncomfortable down the road if they're willing to go higher or lower. A side benefit to this strategy is that you won't be accused of spilling the beans to the other side if, by chance, the offer or counter comes in at the exact figure they shared with you. If a buyer or seller tells you what their highest-and-best or bottom line is, act as if you didn't hear them.

Get everything in writing - no oral negotiating. When agreements are reached over the phone, something always comes up when it's time to put the agreement on paper, creating unnecessary drama. It's easy enough today to just "write it up," and keeps everyone on the same page, so to speak.

(Almost) always counter an offer, even on technicalities to keep the buyer from feeling he could have/should have offered less. However, if an offer is absolutely perfect and you can tell the other agent made a great effort to present a fantastic offer, honor that effort with an acceptance. Otherwise, find something to counter.

Always remember whom you represent, which helps you be a stronger negotiator and not make an idiot out of yourself with your own client!

Encourage your client to make the offer or counter price "attractive" to the other side by rounding up or down (e.g. $279,900 versus $280,000).

When negotiating provisions in the contract or inspection, use positive statements instead of negative ones when possible - for example, instead of stating "No termite inspection," say "Buyer to pay for termite inspection."

Realize that you can say NO - and that the other side sometimes fully expects you to. Sometimes the buyer or seller on the other side wants his agent to ask for something the agent knows is unreasonable. But the agent has to ask, so she does. Just say no. It probably won’t kill the transaction.

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