A home is one of the largest and most emotional purchases most of us make in our lives. Here are a few key points to keep in mind as you negotiate for your Dream Home.
Negotiating Begins Long Before the Offer is Written
Every interaction between buyers, sellers and their agents has a bearing on the outcome of an attempted home purchase. Every question the listing agent or seller answers can give you a clue as to their motivation. (It's good to remember this whether you are asking or answering the questions.)
Let the Seller See that you Love Their Home
Playing hard-to-get is good strategy when buying a car or furniture, but not when buying someone's home. Often, one of a home seller's secret goals is for the new buyer to love their home as much as they do. The seller and the listing agent are evaluating the likelihood that the buyer will remain committed all the way to a successful closing. Go ahead and let some passion show.
Make it Personal
I remember selling a home which received 8 offers. The first buyer to see the home was the first to write an offer-on the first day the home was on the market. The following day, they had flowers delivered to the seller.
The seller selected them over the other buyers who wrote offers, two of which actually offered a higher sale price. It wasn't just the flowers, of course, but the level of excitement and commitment which convinced the sellers that these people would still be there at the closing date. (The flowers didn't hurt.) At the same time, one of the agents who wrote an offer came across as arrogant to the seller. Choose your agent wisely.
Here is a Bonus Tip, as long as we're talking about multiple offers: On the subject of multiple offers, many buyers refuse to participate. They fear getting emotionally involved and not being able to stop offering more money. Remember that sometimes in a multiple offer situation, the other buyers are less qualified and perhaps have offered a price less than what you would be happy to pay. If you like the property enough to have wanted to make an offer, consider making the offer but set a firm limit on price and stop when you get there. If you have the discipline not to get involved at all, trust yourself to stop when you want to. If you don't get the house, you're no worse off than if you didn't try, but what if you actually get the house for an acceptable price?
There is a Time to Stop Negotiating
The final secret is one that the expert negotiator will have a difficult time with. Whether this home purchase is for your personal residence or an investment, if it is the ideal property to buy, remember that saving $10,000 on a home you don't get doesn't really save you anything. Ask yourself whether this home will be remembered as the one that got away, and understand that $5,000 or $10,000 measured against the personal enjoyment of your family or any future gain from owning this particular property may not truly matter. Sometimes you win by getting the house.
These 4 tips will give you a nice advantage in your next negotiation. Next week we have Negotiating Tips for Sellers. That should give you an advantage, also!