Real Estate Negotiating 101 - You Can't Manufacture Leverage
I had to spend a bit of time thinking about the subtitle of this post. I think this captures the essence of what I am about to cover here. These are by no means compreshensive lists, but I think they provide a good start. :)
Let me start by giving a few quick tips for listing agents:
- If you have had a listing on the market for 6+ months, and you don't truly have an offer in your hand, don't try to convince me that you do.
- Don't act shocked by my offer, or use phrases like "I had to use smelling salts on the seller" or "We were very surprised at the offer". Please just present it to your client and then get back to me.
- If you list a home at a crazy-high price, be prepared to defend it and/or to explain to your client why EVERY offer you receive seems to be a lowball.
- If you get an offer in the first week or so, push for the full asking price. You'll probably get it.
And now, for you buyer's agents:
- If you are making an offer in the first week that a place is on the market, make it strong, unless the place is clearly overpriced.
- If you have an option period (as we do in Texas), make sure you get the inspection done and all repairs negotiated during that time - you will lose a lot of leverage after that.
- When your client has identified a house, and you are about to submit an offer, don't tell the listing agent that you have no other options. In fact, make sure your client has a second choice. It gives you more true leverage if the seller is unreasonable.
- Make the assumption that the deal will work out during your initial offer letter/email. You can say, "I look forward to working with you on this transaction." or something similar.
No matter which side you are working for:
- Try to remember that you are representing someone else and it's their money on the line. Try not to act too excited or tip your hand about a specific property. Rather than saying, "This is the one!", try something like "They have a strong level of interest, but we're still talking."
- Never underestimate the power of simple friendliness and rapport - I will readily admit that, all things being equal, I would rather work with an agent who seems nice.
I hope this stuff comes in handy for you - some of it is common sense, and some of it comes from 13 years in the field.
Have a great week - thanks for reading!
Photo above courtesy of jk5854 via Flickr.com.