How to Prepare for and Begin a Successful Negotiation

Top negotiators focus on how the other party will perceive their offer and understand the negotiating process is just a very formal conversation between two people to expressing their wants and needs.  Obtaining information about the other party’s situation, needs, wants, and mindset is crucial to determine how to best appeal to the other party.

One of the biggest mistakes a Realtor can make is to limit their information source solely to the black and white terms printed on the offer (contract). I have found one of the best ways to learn about the other party is to pick up the phone and call the other Realtor. 

When representing a seller, these are a few of my favorite revealing questions to ask the buyer’s Realtor over the phone: How soon do you need a response to your offer? How did you arrive at this price? Do they have another house to sell? How long have you been looking for a house? How important is the closing date? Have you studied what percentage of list price homes are selling for in this area?  

Representing a buyer involves a whole other set of questions. Buying a home is a HUGE investment and it’s important to have as much information possible to make a smart decision. Do all the research you can to get the facts about the home for your client. Then, the best thing you can do for the buyer is to call the selling agent. Ask as many questions as you can. The answers to these questions can help your buyer make a strong offer that works with their budget.

Good Questions to Consider:

• What is an acceptable offer?
• How long has it been on the market?
• Have they had a price drop?
• How much did they reduce the price? What percentage?
• Learn the situation of the seller – how much money do they need to get out of it and how quickly do they want to sell?
• Is it occupied or vacant?
• Why the seller is selling?
• When does your buyer need to move?
• When does the buyer need to close?
• What repairs need to be done?
• How many people own it? (in the case of an estate/dividing up profit)
• What is the Fair Market Value?
• What will it appraise for?
• What time of the week will you place the offer?
• Should you ask the seller to pay closing costs?
• Will the seller consider paying closing costs?
• Consider the net to the seller
• Does the buyer have cash on hand to pay for the closing costs?
• What repairs/changes can/will you ask for?
• What have the sellers done to the house to improve it?
• Who is the builder?
• What is the average utility cost? (ask the seller)
• What % of LP are homes selling for in the area?

After you have all the answers you need and you’re getting ready to place the offer, consider these final two questions!

If you don’t get the house – would you have wished you would have offered more?

If you do get the house – would you wish you would have tried to get it for less?

For additional market information or more negotiating tips, call or email today.