We all know that negotiating is an integral part of any real estate transaction. And doing it well is, in large part, what can get you the deal you want, whether you’re buying or selling. It pays then to know some of the best negotiation strategies and tactics that will give you the upper hand. Some are psychological tricks, and some simply involve preparation – but you need to know them and how to deploy them. So here are some pro negotiation strategies for home buyers and sellers in Salt Lake.
Don’t Speak First
You never want to be the first to tip your hand, and that applies to negotiation strategies as much as it does to poker. So don’t speak first. Rather, let the other party begin the negotiations.
When you let the other party begin, you automatically have the upper hand. You find out (without committing yourself to anything) where the buyer’s/seller’s starting point is, and then you can leverage that to your advantage.
Most negotiations wind up on some middle ground, with each party gaining something and giving up something. But when you allow (or force) the other party to go first, you have a better idea of where that middle ground is and are in a better position to move it to a place that better favors your interests.
This is one of the negotiation strategies that a good agent will be skilled in. To find out how a Salt Lake agent can help you get the edge here, just call (801) 755-3865.
Be Prepared With Information
Another effective negotiation strategy involves being prepared with information beforehand. That way, you can enter into negotiations more informed and better prepared than the other party, especially when you’re a buyer and with respect to the property’s value.
A good strategy here is to have your own independent appraisal done before you sit down to negotiate. That way, you’ll already know what the home is worth, as well as knowing more about the property and the neighborhood. Then, you can make an informed offer.
Look for Desperation
Whether you’re a buyer or a seller, it also pays to be on the lookout for any signs of desperation. If the other party is desperate to buy or sell, that puts you squarely in the driver’s seat.
The difficulty in this one of our negotiation strategies is that you may not have enough experience to recognize signs of desperation. But your agent will know exactly what to look for and how to leverage it. To discover more, just call (801) 755-3865.
Counter With List Price
Most of the time, it isn’t expected that an initial offer will be accepted. Usually, a buyer will make a low first offer, and then you, as the seller, come back with a counteroffer. And that’s where this one of our Salt Lake negotiation strategies kicks in.
“Buyers usually expect a back-and-forth negotiation, so their initial offer will often be lower than your list price – but it may also be lower than what they’re actually willing to pay. At this point, most sellers will make a counteroffer with a price that’s higher but still below their list price, because they’re afraid of losing the potential sale. They want to seem flexible and willing to negotiate to close the deal. This strategy does indeed work . . . but it’s not necessarily the best way to get top dollar. Instead of dropping your price, counter by sticking to your listed purchase price, Someone who really wants to buy will remain engaged and come back to you with a higher offer.”
Set an Expiration Date
Another good tactic among negotiation strategies for sellers is to set an expiration date.
“Say a buyer submits an offer that you don’t want to accept, and you counter their offer. You’re then involved in a negotiation with that party, and generally, it is considered unethical to accept a better offer from another buyer if one comes along, though it is not illegal.” But“it is possible . . . to be involved in multiple negotiations with several buyers at the same time. It is the seller’s prerogative to disclose or not disclose this information to the prospective buyers… In the interest of selling your home quickly, consider putting an expiration date on your counteroffers.”
What this strategy does is force the buyer “to make a decision, so you can either get your home under contract or move on. Don’t make the deadline so short that the buyer is turned off, but consider making it shorter than the default time frame in your state’s standard real estate contract. If the default expiration is three days, you might shorten it to one or two days.”
Have a Back-Up Plan
All good negotiation strategies will have a backup plan in place. The first tactic may not work, so you need something to fall back on.
Suppose you have a serious and motivated buyer, but just can’t the sale price where you want it. What do you do in this case? That’s when you revert to your backup plan – for example offering to pay closing costs.
“These costs can amount to about 3% of the purchase price and cover what seems to be a lot of frivolous fees. Buyers are often feeling cash-strapped from the down payment, moving expenses, the prospect of redecorating costs . . . While many buyers don’t have or don’t want to spend extra cash upfront to get into the home, they can often afford to borrow a little bit more. If you give them the cash they want for closing costs, the transaction may be more likely to proceed.”
Include a Salt Lake Agent in Negotiation Strategies
Really, one of the best things you can do to win at the negotiating table is to have an experienced Salt Lake real estate agent in your corner. Your agent will know exactly what strategies work best in the local market and can help you get the deal you want. So if you want the advantage of agent-driven negotiation strategies for home buyers and sellers in Salt Lake, contact us today at (801) 755-3865.