Sally's Key West: Negotiating Tips

Ki Gray wrote an informative article for other brokers on this topic. These are essential tools for Buyers and Sellers, as well. Let's take a look from that perspective.

Homebuyers and sellers are emotionally involved and almost never objective (yes, this means you.) I am perfectly objective about your sale. But buying or selling my own property? Not a chance. Guys, don't think you’re immune to this. You may hide it better, but this process can make a grown man cry.

Here's Psych 101 on Home Sales: Your home represents who you are to the world. Taking on a new home you plan to make "yours" or letting go of one you've grown up in... Not to be overly dramatic about it, but those rivers run deep.

You are also going to spend or receive the biggest lump sum most of us will ever see in one place at one time. Buyers are parting with a gigantic amount. Or borrowing one, in which case it’s becoming more gigantic every minute. Sellers are taking home a large check they will use to finance another dream. Short of dark chocolate, this is as emotional as it gets.

Ki makes a particularly excellent point here. Since each home comes with its own emotional being attached (you), your agent's job is to advise that emotional being with facts rather than more emotion. New agents rarely understand this because no one teaches it. If an agent is paying attention and willing to take responsibility for her ineptitudes, she learns by the seat of her pants. Some agents never learn at all. Choose yours accordingly.

These five negotiating tools keep emotions outside and your deal on track, chugging toward a happy closing.

1. Don't sweat the small stuff.
Like a refrigerator. The pool equipment. Whether or not the yard has been mowed prior to closing as agreed.

Sellers: if they want the lawnmower, is it worth keeping these buyers, who are ready to close with this concession, on track? Or do you put your property back on the market, keep making payments until the next buyer comes along?

Buyers: if the seller is ready to lose the deal over that Bosch dishwasher he insists on taking, will you allow him that or spend more time and money looking for a home you will want as much?

Sometimes, it is worth ending the deal. To be sure, take a day off negotiations, go to the movies, take an actual hike. You’re more likely to come back to the table with the big picture in mind.

2. Negotiate all the issues.
Even when both parties agree to the sales price, other factors can make or break a deal.

Closing date: earlier or later, even by a couple of weeks, can be critical
Closing costs: having one party pay all, splitting costs, or some other division equitable to the parties
Closing agent: if parties can’t agree on one, each could have their own
Financing: Seller has a right to know all, since s/he is taking a property off the market. There are documents the lender can provide that will reassure the Seller. If you are the Buyer, offer these!

If you understand the other party's situation, you can often give a little that helps your deal close and makes you look like a hero. Be open to that!

3. Presenting items to be negotiated.
Avoid the tendency to negotiate one item at a time. Presenting one at a time - one repair item after another, for instance - nets you more hostility than agreement. The other party becomes progressively more defensive, irritated and less agreeable with each request. Their blood pressure goes up every time the phone rings. Not good! You want your calls welcomed!!!

An added bonus is that a list forces issues to be prioritized. You won't get everything you ask for... But, you know what can be left behind, what must get resolved.

Brace yourself: Buyers and Sellers have twisted this tool in less-than-honorable negotiations! The following are not in good faith, not a secret and cause more harm than good.

Tactic #1: Ask for more than you know you will get. Add 10% to the list you can happily “give up” so you look generous, hoping to get the items you really want. Count on the other side doing the same...

Tactic #2: If there is an item critical to you and you believe the other party will refuse, leave it off until late in the game. Timing and presentation is tricky, the other party is suspicious of this, and it usually backfires badly. Be prepared to compromise or walk away.

4. Dealing with threats.
Occasionally, one party threatens termination as a bargaining technique. Remember all that emotion flying around? Backs go up against the nearest wall in a minute.

If you are the receiver of such a threat, you will likely dig in your heels and say, "Fine." If you can resist that urge and you want the deal, ignore the threat. Talk about the strong points of the contract. A good experienced agent comes in handy here. Better a neutral party does this negotiation!

If you are the deliverer of such a threat, be prepared to put up or shut up. Otherwise, you have lost all credibility in the negotiations.

Amazingly, threats come about over small stuff! Refer to number 1.

5. Know when to fold 'em.
Occasionally, a meeting of the minds simply won’t happen. Buyer and Seller are opposed, making what seem to be ridiculous demands. If you find yourself in such an emotionally volatile situation, take a step back, end the negotiation, and move on.

Having a deal fall apart can be devastating. On the other side of a dozen years, my experience is that when a deal just won't happen, something better is down the road. Perhaps another property, often a job offer or opportunity in another area. Trust your instincts, trust your intellect, NOT your emotions, and the deal will follow along!