In my 18 years as a REALTOR®, I’ve seen hundreds of deals, and am happy to say that most go smoothly. However, since so much is negotiable in a real estate transaction—from price to the closing date to whether the drapes will stay or go—the potential for misunderstandings and disagreements is tremendous.
To keep your next deal on track, avoid these 4 common mistakes:
Taking it Personally
If you are the seller, this house is much more than a place to live—it’s your home. Maybe you marked the kids’ growth on some trim in the kitchen, or perhaps this was the first place you bought when you were newly married. Whatever the case may be, you likely have more than just dollars invested in your home–you are emotionally attached to it. But this emotion can cause real problems during the negotiating process. I counsel my sellers to keep cool when a buyer presents a lower offer for their home. It’s not meant to be an insult, and I prefer to reframe it as the first step towards a great deal. It’s also part of the reason I ask my sellers to leave when their house is being shown. An overheard comment about the “awful” choice of paint color in the kitchen can color a seller’s reaction to that buyer’s offer.
Much like a gambler may give away the strength of his hand with a “tell,” buyers may also signal their emotional attachment to the property and thereby put themselves at a disadvantage in negotiations. When a buyer isn’t able to walk away, they’ve lost all bargaining power, and that’s when bad decisions like paying 10% over an appraisal get made.
What’s the lowest price you’ll accept for your home? How quickly do you need your home to sell, and what concessions, if any, will you make? I work to answer these questions with my sellers before we put their home on the market. All of this, along with an in-depth market analysis, helps us to set a price that will achieve the best outcome. Knowing the price is right helps my sellers to feel comfortable waiting for the right deal rather than jumping at the first offer. Buyers also need to hold firm to their target price range. It’s easy for buyers to let that top number creep upwards, especially in a hot market, and strap themselves financially for years to come.
Ignoring the Market
There are buyer’s markets and seller’s markets, and negotiating a good deal requires understanding which side the market is favoring. A buyer asking for lots of concessions in a seller’s market, or a seller who won’t compromise on anything in a buyer’s market, will likely end up without a deal. How do you know what the market’s doing? Ask your REALTOR®, and take a look at the last few monthly market analysis provided on SABOR’s website.
Are you willing to jeopardize the sale of your home because the buyer wants the refrigerator and microwave to convey? I’ve seen half-million dollar deals fall apart over similar negotiating points. Flexibility pays off, and both buyers and sellers should avoid overemphasizing minor details if they want to get to closing.
Remember, as a REALTOR® and north San Antonio luxury home specialist for over 18 years, I can help you avoid these mistakes by identifying an appropriate buying or selling strategy for your specific circumstances.