Today’s real estate market is fast-paced. Agents, home buyers and sellers alike will have to be on the same page and practice excellent communication. To prepare for bidding on homes and accepting offers, let’s discuss real estate negotiation tactics.
Factors Impacting Real Estate Negotiation Tactics
Last month, I discussed real estate market trends for 2021. Current market factors, which include the influx of Millennial and Gen Z buyers, interest rates, the pandemic, and the past election, have varying levels of influence on real estate. But what does that mean for buyers and sellers? They need to be ready to negotiate, and that being said, here are strategies you can use when negotiating home sales.
5 Home Buyer Negotiation Strategies
Home buyers need to be savvy because home inventories are low and competition is high. You need to be ready to act. Some of the negotiation tactics I offer seem passive in their approach, but they are critical in preparing you to get the home of your dreams.
1. Set Your Budget & Prepare Your Finances
A home for sale will go to the bidder with the best overall mix of price and terms. A few examples of terms are down payment, closing dates, and earnest money. Therefore, you need to set your budget and prepare your finances. Both buyer and seller want the process to go smoothly, and it’s vital that finances are in place. So, have a frank talk with your lender and most importantly, have a letter of approval secured, so that you are ready to go should you find that perfect house.
2. Understand Your Needs
If you are looking for homes, you should already have a vision in your mind of what you need and want in a home. Therefore, take the time now to make a list of your must-haves and wants in case you get involved in a multiple offer situation that requires an immediate bid.
3. Research
Having data will influence many decisions. While agents provide as much information as they can, it’s great if a buyer does research. When looking at a house, don’t be afraid to ask your agent to dig deep and learn about comparable homes, taxes, HOA fees, and what else is available on the market.
4. Understand Your Competitors
Remember, you’re probably not the only one interested in a property. Bring your best bid forward if you think you’ve found the house of your dreams.
5. Be Patient
While you might have your heart set on one home in particular, there are many factors that could impact your chances of actually ending up with the home. It may take more than one try. Don’t be discouraged, the right home is out there!
5 Negotiation Tips for Sellers
Sellers, you are in a great position to get a good price on your home, but that doesn’t mean you can sit quietly while the action happens around you! Here are some real estate negotiation tactics to brush up on to get the best deal for your property:
1. Counteroffer
You can expect a first offer to be lower than your asking price. Most often, your list price will be more than your prospective buyer wants to pay or can afford. When you make your counteroffer, your agent will be your best resource to help you make a realistic response.
2. Discuss with Your Agent
Be prepared to have an open dialogue with your agent. As the negotiations go back and forth, an open mind and flexibility are key. The deal could take some twists and turns, and you could ultimately agree to terms that may surprise you.
3. Should I Reject This Offer?
It is always best to give some sort of counteroffer. However, there are some occasions where the terms are so far apart, that a simple “no thank you” is warranted.
4. Set Time Limits
Set a time limit for prospective buyers. However, don’t set too short of a time limit as that may rush the buyer. Respect for each other’s time is the best way to go. Discuss the right time period with your agent.
5. Be Prepared for a Bidding War
You may find yourself in the midst of a bidding war for your home. If you find yourself in this position, you’ll want to be accessible to answer questions and make counteroffers as quickly as possible to keep the process going. It’s an opportunity for you to get the best price and terms for your home sale or purchase.
Terri Buseman: Your Guide for Simple and Complex Real Estate Deals
Real estate deals are exciting! Buying or selling can be less stressful when you are prepared with some knowledge of the negotiation process. If you’re ready to start your home buying or selling journey, contact me today.