Negotiating to buy or sell a home or other real estate is similar to buying or selling a used car. Negotiation strategy plays a major role in home sales. Typically, if the asking price for a home is set close to its market value as determined by recent sales prices of comparable homes, that home should sell within ninety days for close to its asking price. Even if a home is overpriced, it may sell quickly if the seller is motivated to sell and the buyer is anxious to buy. Negotiations tend to breakdown when one or both parties really do not want to make a sale except at a very advantageous price. There are several simple negotiating strategies that are useful.



Knowledge is power in negotiations, so it is wise to learn as much as you can to prepare for the negotiation. If you are selling your home you should be sure to get your home into top condition so buyers will not have any physical objections and you should also have the facts on the recent sales prices of homes nearby which are comparable. You should make any price adjustments compared to the recent neighbourhood home sales.



Consider also the asking prices of other competitive homes currently listed for sale. It is best to understand the importance of time in the negotiations. If you are the buyer do not hesitate to ask why the seller is selling. There could be any number of reasons as to why they have put their house on the real estate market, such as a job transfer, pending foreclosures, illness, unemployment, or other motivating factor. If you learn that the sellers are a couple who is retiring or already has retired, they probably will not be motivated to accept a lower offer. No matter how desperate your time deadline might be, do not let the other party know your motivation. If they are aware of your time weakness they may try to take advantage of them.



Try to learn the other party's motivation in selling their home. If you learn the seller is selling because they just purchased a larger home, you know they are motivated by both a time deadline and the need to sell their old home to provide the down payment cash. If you learn the seller wants to buy a larger home, but has not done so yet, that seller is not yet highly motivated to sell and might not accept a lower purchase offer.



Generally, the biggest obstacle to learning the seller's motivation is often a listing agent who refuses to tell why the seller is selling. Watch out for a negotiator who needs to seek approval from a higher authority. This may be a spouse who is out of town or a parent who is supplying the buyer's down payment. Realty agents can anticipate this roadblock by holding off until all necessary parties can be present to either make or accept the offer. An offer, which hinges on the approval of a third party, is often doomed to fail. The reasons a third party will often reject a negotiated offer is because they either weren't aware of how and why the offer was made.



It is best to watch out for the non-stop negotiator. Real estate buyers often use the non-stop negotiation strategy in which they make a decent purchase offer which after a few counteroffers back and forth, results in a home sale with both parties signing firm sales contracts. This is typically the beginning of the negotiations. A non-stop negotiator will typically insist on coming back to the home looking for real or imagined defects in the property which can be used to negotiate the price downward or to obtain a repair credit. This is also the time to look for the bad guy-good buy negotiation strategy. One person may try to get the best deal and the other will step in to make the bad guy more reasonable. Do not be in a hurry to conclude the negotiations because these negotiators often take hours to wear down. Buyers should also try to avoid an auction situation. Home sellers love to get into the auction strategy, but this can be a very dangerous situation for home buyers and should be avoided.

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