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Culture » Take Me Home

Real Estate Negotiations Are Not a War

Think of them as more of a dance



The basic definition of negotiation: A discussion between multiple parties, aimed at reaching an agreement. The ultimate goal of negotiating a real estate transaction is for all parties to reach a win/win situation. Buyers want to buy and sellers want to sell. The trick is to find the middle ground where both parties are pleased with the outcome and they successfully close the transaction.

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The negotiation process in a real estate transaction can be a bit daunting, as the investment itself involves substantial capital, lengthy time lines, contingencies (home inspections, appraisals and financing being the most common) and items that may convey with the property. In addition, there's an emotional component that exists when dealing with what is, for most people, the largest financial transaction they'll participate in during their lifetime.

In my career, I've experienced several different negotiation situations. One of the most important things I try to impart on the clients that I work with is very simple: When negotiations begin, it's not a battle. Oftentimes buyers, sellers and even sometimes brokers come into the negotiation process with a zero-sum game mindset. One side will win, and the other side has to lose. This "guns a-blazing" mentality generally does not lead to fruitful discussions with an outcome that will result in accomplishing the ultimate goal—which is the purchase or sale of a property.

The real estate negotiation process is better approached as a collective bargaining method. Negotiations are about more than just the price. It's important to understand the big picture and remember the end goal when opening the negotiation process. Emotions need to be kept in check, as a real estate transaction is purely a business transaction. That can be difficult to do, because a home has so many emotional connections. For example, perhaps that is the home a seller's children took their first steps in, or it's the home the buyer has dreamed of for years and finally has the ability to purchase. When emotions are a factor, tensions can rise and ultimately lead back to the battleground mentality. The very thing that can destroy a transaction before it gets off the ground.

The tone of the transaction is set by the tone of negotiations. This applies to buyers, sellers and real estate professionals. It's important to remember as a buyer that being rude or aggressive may not work to the buyer's advantage. The seller is taking a risk on the buyer's commitment and ability to perform, so they want to have a good feeling about the person they're negotiating with. Conversely, as a seller, there are many buyers out there and creating a difficult terrain/tone lessens the likelihood of a buyer's desire to purchase the property.

The negotiation process is not a war, but more of a dance—a smooth ebb and flow between partners, where everyone feels good about the agreement and they attain the goal of a successful completion.

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