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    Radio Show: Smart Negotiation Practices for Buying a Home

    Smart Negotiation Tactics that Actually Work

    When looking for the perfect home, it’s difficult not to be caught up with feelings and sentiment. The residential real estate market couldn’t be more different from the commercial real estate market. Whereas commercial real estate transactions are calm, cool, and collected, residential real estate transactions are fraught with emotion. It comes with the territory. You’re not just looking for property; you’re looking for a potential home.

    However, decisions made with the heart aren’t always the best. When negotiation, don’t let your emotions get the best of you, let cooler heads prevail. Here are some smart negotiation tactics to keep in mind when navigating the real estate market.

    Know what the property is worth.

    Patience is a virtue. Once you’ve fallen in love with a home, it’s difficult to dial back the excitement and not purchase it on the spot. But the more prudent negotiators know that it’s always better to track the property and wait. In majority of cases, sellers overestimate the price since most homeowners usually have an inflated idea as to what their homes are worth. It’s a classic case of emotion affecting decisions. Some sellers are so attached to their home and to the time they’ve spent there that they end up raising the value because they think it should be worth more. The property has to be on the market for a while before a seller realizes that maybe he or she overpriced it. In majority of cases, it’s the seller (not the agent) who prices the home and they usually have an exaggerated idea of what their homes are worth.

    Make a fair but attractive offer.

    Don’t lowball the seller. Although the listing price shouldn’t necessarily be your initial offer, don’t insult the seller with a figure that’s obviously unfair. Again, most sellers are attached to their homes and somewhat sensitive about it’s worth. If they get offended, they might refuse your offer altogether and dismiss you as a potential buyer. You should also do your research. Look at comparable sales so you can get a fair estimate as to what the property is really worth in the market at present.

    Know the motivation behind the sale.

    The dynamics are different for every situation. It really depends on the circumstances that the buyer is in and the circumstances that the seller is in. The motivation behind the sale is a significant factor to consider. For example, someone who’s been transferred to a different State and needs to move immediately might be more open to a price that’s slightly below the his or her asking price. However, those who are just looking to get rid of extra property might not be as forthcoming since they have the time to wait for a buyer who will agree to the price they want. Knowing the motivation behind the sale can help you plan your strategy for the negotiations.

    The bottom line is, you shouldn’t let emotions rule your decisions. Although selecting a home is an intensely personal decision, it should still be one that is well thought out. If you want to learn more about negotiation smarts, tune in to Brashenomics with Ben Brashen. David Bell of Re/Max explains some simple negotiation tactics and discusses some of the financial and emotional reasons behind the negotiation process in the video above.


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