In Parts 1 and 2 of our three part series, we focused on the necessary considerations of Buyers and Sellers when approaching the Offer to Purchase. This week, in Part 3 of our three part series, we have come up with seven helpful tips to effectively negotiate the Offer.
- Use a Real Estate Professional to Negotiate: We’ve said it before, but we’re going to hammer it home again: using an experienced Real Estate Professional is critical. The reasons are three fold: 1) with rare exception, most of us have not negotiated a deal involving many hundreds of thousands of dollars, 2) the Real Estate Professional can act as the “bad cop” and disguise your deal seeking nature as zealous client representation (thus insulating you from looking like the “Bad Guy,” and 3) the Real Estate Professional knows “when to hold ’em and when to fold ’em.”
- Don’t Make Snap Decisions/Don’t Take Too Much Time: It is sometimes the case that a Buyer and/or Seller will make a rash decision. It’s difficult, uncomfortable, and often expensive to unravel a bad decision. Take your time, listen to your gut, do your homework, and talk with your Real Estate Professional before making a decision. By the same token, waiting too long to make a decision can mean the difference between reaching the deal and walking away empty handed. In a hot real estate market, agile, focused parties will succeed more often.
- Don’t Take Negotiations Personally: While the negotiation is for a home which is a very personal object, it’s sometimes hard to remember that you are still negotiating the sale or purchase of a thing. Pointing out faults with your home is not meant as an attack–it’s a bargaining tactic. Also keep in mind that the tactics that you use may be taken personally by the other side.
- Compromise: Trading terms is a great way for both sides to feel like they are getting something. If the closing date isn’t critical to the Buyers, consider offering a long or flexible date in exchange for a concession that isn’t important to the Sellers–everyone walks away with something. As Stephen Covey so eloquently stated in his 4th Habit, “seek a win-win.”
- Remind the Other Party that Neither Party Will be Completely Happy: It’s simply a fact of life that compromise will not always yield a result where each side is left smiling. It’s important to remember that an effective negotiation should end with both sides being equally unhappy.
- Put Things in Perspective (What’s $5,000 when the House is Worth $5,000,000): We all know a dollar is a dollar, but when it comes down to the nitty-gritty, that extra $5,000 is unlikely to break the bank, and it may be worth taking the hit to make sure the deal is consumated. Don’t walk away from a good deal due to pride or so-called “principle.”
- If all else Fails, Flip a Coin or Offer to Arm Wrestle: If neither side is willing to budge on that last issue (be it money or another term), consider disarming your opponent by offering to resolve the impasse with a game of luck or skill (the possibilities are endless: a footrace, pie-eating contest, game of HORSE, Blackjack, etc). Just beware: you may be challenging a world-renowned arm wrestling champion (trust me–personal experience).
Stiles Law, with offices located in Boston and Marshfield, Massachusetts, is a firm concentrating in real estate conveyancing and mortgage lending services, representing buyers, sellers, borrowers, banks, mortgage companies, investors, builders and developers in all of their real estate and mortgage transactions. Stiles Law serves all areas of eastern Massachusetts–the North Shore, Boston, and Cape Cod, in addition to the entire South Shore, including: Plymouth, Kingston, Duxbury, Hanover, Pembroke, Marshfield, Scituate, Norwell, Cohasset, Hull, Hingham, Weymouth, Braintree, and Quincy.
Copyright © 2014 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts. No child labor laws were breached during the creation of this Blog and Bob Bonkley was compensated for his likeness and appearance in the same.