Negotiating Quick Tips

[Owen Dashner]

This past week was a pretty good week for my real estate business in getting several new houses under contract.  Each seller's situation was different, and each person had a different personality type, negotiating style and level of motivation.  It got me thinking about the nuances of negotiating with people in general, and I thought it might be cool to hear some quick tips from others that have been useful when negotiating.  I have a few that have really worked for me over the years, here are some of them:

1. Ask, "Is that the best you can do on price (or terms or whatever you are trying to achieve)?", and then be quiet.  I have made this one a habit, not just in real estate, but in life in general and it is very powerful.  It puts the other person in a situation where they are in essence negotiating against themselves. More often than not, it results in a better price or terms.

2. I always ask, "What do you think it's worth?" when talking to a motivated seller.  This is a good one to gauge the number they would be happy with, but do not necessarily expect to get.  It is a non-threatening question, and can lead to them telling you a lot more details about their opinion of value based on their motivation, how realistic they are about the condition of the house vs. comps, whether or not a family member or friend has an influence on them, etc.

3. After asking the above question, follow it up with, "What would you take for it?".  These questions seem like they should have exactly the same answer, but they almost never do.  However they answer this question, you are now much closer to the real number.  

4. Always talk about the seller's different options to get the house sold, and the pros and cons of each.  Depending on how the conversation is going, I normally begin by asking them if they have considered listing the house with an agent, letting them know that it is still a sellers market, etc.  In general, I try to steer them away from doing business with me, because if they are really motivated, they will sell me on why they want me to buy it instead of the other way around.  "I don't have time to wait for the house to sit on the market".  "I don't like Realtors".  "I can't afford to pay commissions and closing costs".  "I guess I thought that with the condition of the house, I couldn't sell through a Realtor".  "I don't want my nosy neighbors going through my house".  Any of these responses are helpful to determine the best approach to help them, and their motivation level. 

5. Make sure to explain to them that there is always the option to list the property "as-is" with a Realtor, with "no repairs or reports to seller".  It amazes me how many people don't realize this.  They think that in order to list their house for sale, it has to be in updated condition with all the needed repairs completed because that's what their friend/dad/neighbor told them. Explaining this is huge in establishing credibility and trust.  They may or may not end up doing business with you, but you are going to establish yourself as someone who cares about their situation and this is huge for your reputation and referral flow.

These are some that I use regularly, what are some of your best negotiating quick tips?