Guest Blog by Francine Viola, Realtor, ABR; Coldwell Banker Evergreen Olympic Realty
You’ve searched for the perfect home, and you’ve found it! Your excitement can quickly change to anxiety when you have to write up an offer and enter into negotiations. The thought of having to negotiate can strike fear in many of us. Here are my four tips for negotiating a successful home buying transaction.
#1 – Know your Facts
If you dread negotiations because you feel like it is a fight or a battle, this first tip will be most useful to you. Get the facts of the situation. In the case of buying a home, have your Realtor pull the sales data of comparable homes that have sold recently. The sales numbers are cold-hard facts – not opinions. This helps in taking the fear out of negotiating. There are homes that are over-priced as well as competitively priced. The numbers will reveal fair market value. Knowledge is power. Don’t undermine your offer or credibility by appearing ill-informed or overly aggressive. Use the data on your side to craft a smart offer.
#2 – Know the Seller’s Costs
Understanding what the seller needs to bring to the table can give you the upper hand in negotiations. The seller has their own closing costs they need to settle at closing. These costs traditionally include the commission for both the listing and buyer’s agents, state excise tax, title insurance and escrow fees. On an average-priced home, typically, these costs can run about 8-9% of the sales price. You may perceive that your offer is terrific but understand the seller has their set costs they need to pay in order to sell their home. By understanding the other side’s situation, you can present an offer that can be accepted.
#3 – Know your Bottom Line
You will already have been pre-approved with a lender, so you will know financially what your bottom line is, but there is more to an offer than just the sales price. Identify the terms you want and then determine what terms you can accept. If you fully understand your needs and wants you will be able to quickly determine if you should continue the negotiation or move on.
#4 – Know how to Craft a Win-Win Offer
As mentioned above, there is more to an offer than just the sales price. Look for ways of solving the seller’s objections by negotiating other terms of the offer. For example, the seller may need a quick sale. It may not make any difference to you if you close in 3 weeks or close in 6 weeks, but for a seller, a quick close may be worth it to them to accept a lower priced offer. Discuss with your Realtor the other terms you can negotiate to write a strong, win-win offer.
Keep in mind that negotiation is not a battle or a confrontation, but rather a pursuit to find a common ground that both buyer and seller can accept. By being prepared with the facts and understanding your needs and the seller’s needs, you’ll create a solution that will fit everyone’s goals. Follow these “knows” and you’ll be successful in your negotiations that will lead to a “yes!”
