7 Real Estate Negotiation Strategies From An Expert

Real estate negotiation is one of the fine points of buying a home, but not many people know much about it. The process of negotiating a home purchase is a complex one, regulated by a variety of laws and industry standards, but there is also an important human element to the process. The following real estate negotiation strategies will give you a feel for how the experts approach this professional art form.

“Inclusion” is a real estate industry term denoting an affixed amenity that is sold along with a property. For instance, a hot tub, home gym equipment, or even a washer and dryer could be factored into a home sale contract as an inclusion. You can make use of inclusions in a contract in order to derive more value on your end of a sale, whether as a buyer or a seller.

This point is really an art. Part of using confident language is remaining positive. Show that you are in a strong negotiating position by using affirming words. For instance, you may say something like, “I think that we agree so far on the basics, but I’m hoping we can reach an agreement about the appliances.” When your words express focused intent, the other party will be more likely to take you seriously.

Your standing in the negotiation will be stronger if you come to the table knowing what you’re talking about. For instance, there are basic facts, such as the market value of the home for which you are negotiating, that you want to be in-the-know about. You can use a market valuation tool to look up an address for this information. That way, you will have a more or less objective standard for how reasonable your offer or counteroffer is. Doing proactive research will strengthen your side of a real estate negotiation.

When you are negotiating real estate transactions, you need to have reasonable expectations of what you are trying to get, as well as a sense of what the other party’s expectations are. You should discuss with your agent the current market conditions and set realistic goals when you are negotiating, whether as a buyer, seller, or investor.

Based on how long a home has been on the market, what the list price is, and what the current market conditions are, your agent will know logically and intuitively how much room for play there will be in the negotiations for a home. You show the other party that you are serious when you hold reasonable terms and informed expectations.

Upholding fiduciary duty is an essential standard within real estate. Contractual and financial obligations exist between agents and their clients, as well as between parties that are contracting for the sale of a home. This brochure from the National Association of Realtors (NAR) is a great primer for those who want to learn more about the concept of fiduciary duty when it comes to real estate.

When you put in an offer, you are likely to receive a counteroffer unless you have offered the asking price. Even then, the other party could offer different terms. You also have to consider the possibility of competing bids for a home that you are looking to buy. If needed, you can use an escalation clause in order to prepare for competing bids. An escalation clause is simply a contractual term that allows you to raise your offer in response to other offers. It is similar to the concept of setting a maximum bid in an auction. Regardless, make plans in advance for how you will respond to a counteroffer during the negotiation process.

There’s more to negotiating a home sale than just the price. Here’s an overview of the main things you’ll discuss during a real estate negotiation.

When you are negotiating, don’t just go in blindly. Think about what you are willing to pay for a home at most and what — if any — concessions you would like the home seller to make. If you’re buying a home, you may want to aim below your maximum budget so that you’ll have some room to go up if needed. If you’re selling, consider setting a list price slightly above what you’re willing to take but reasonably comparable to market value.

Don’t overlook closing costs when planning your real estate transaction and negotiating the contract. These costs add up, from home appraisal and inspection to the various financial fees associated with obtaining a mortgage.

When you hear that a given home sold for a given price, the question to ask is, “What did that include?” Was it just the bare bones of a home, or did it include extra amenities? As a buyer or a seller, you can use inclusions to offset some other cost or term within a contract. For instance, a seller could avoid having to make a repair by offering an inclusion.

In addition to inclusions, repairs constitute another major negotiable in a real estate transaction. Many homes need minor repairs, and others may have a major appliance or other feature that is on its way out. As such, include repairs in your negotiation.

When it comes to real estate negotiation, the best strategy is to have an experienced professional on your side. Your ability to set clear, focused goals combined with a local realty team’s expertise will put you in the proper position of strength in a real estate negotiation.

Maven Realty Utah is a top-tier team of experienced agents who have negotiated many successful sales, representing some of Utah’s finest luxury real estate. Expert Realtors Helene Kepas-Brown and Sarah Stewart are ready to put their real estate negotiation expertise to work for you. Reach out today to get started.

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