What to consider before negotiations.

Posted by on Thursday, November 6th, 2014 at 8:19am.

Real estate and automobiles are two items that Americans like to bargain over, even while we pay the asking price for almost everything else. Some people feel that if they don't get some kind of price reduction or concession from the seller, they've been cheated.

With that in mind, your listing price should include a small margin for negotiation. But it must be small. If you list high and expect to negotiate a drastically lower price, you'll miss the buyers in your correct price range and the buyers in the incorrect price range won't be interested enough to bargain.

That said, the first step in successful negotiations is to price the house correctly in the beginning. This, combined with the knowledge that I'll let you know if market conditions suddenly change, gives you the confidence to walk away from a ridiculous offer - and being able to walk away is the strongest negotiating stance you can have.

Keeping your personal business personal is another. That's one reason why I discourage sellers from talking to buyers and their agents. People ask questions, and it is far too easy to answer a question that can harm you. For instance, many will ask "Why are you selling?" If they learn that you need a quick sale for a compelling reason, your negotiating position is destroyed.

This is also the reason why I never discuss my sellers' motivations with other agents, even within my own firm.

One phrase that I avoid in my marketing is "Seller is motivated." Why? Because it's like a neon sign announcing "They'll take a lot less," and it leads to extremely low offers. If you really do want to give the house away, why not list at a ridiculously low price and market it as the bargain of the century? It would save time and haggling.

But you don't want that. You want a fair price. So at the time of your listing we'll discuss negotiation and what you are willing to "give" in order to close a sale. It could be a small reduction in price, an allowance for new carpet, or the willingness to pay some of the buyer's loan fees. I do recommend that you be prepared to give something, because the "take it or leave it" stance generally leads to "leave it."

You won't be on your own during the negotiations. I'll be by your side, advising you from my experience with buyers and my knowledge of today's market.

Call me today. I'll be glad to explain how I'll help you negotiate your way to the best price and terms in today's market.

Looking forward to your call.

P.S. Have you had a transaction fall through between agreement and closing? It happens all the time, and my next message will tell you why.

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