If you’re a buyer or seller and wondering why you should have a real estate agent, it is for their expert negotiating skills. The most skilled agents will never allow the negotiations to come down to one issue. This way both parties can come to an agreement feeling like winners. However, even the most experienced agents may not know all of the negotiating strategies that can help the transaction.
Prior to beginning the negotiations, the agent should establish criteria and determine the primary goals of both the buyer and seller by asking the right questions. This criteria includes financial needs, potential future relocation, cash needed to close, closing date, home warranty needs, persons living in the home, kids, animals, physical additions needed to the property, potential rent-back needs and more.
1. Nibbling – This strategy is intended to make the seller feel cheap. As the name implies, the buyer nibbles a little here and a little there, slowly getting the deal they desire.
Example: If the buyer was purchasing a $700,000 home and asked for a new roof, the buyer could say something like, “I’m buying this $700,000 home from you. How much could a new roof cost?” Slowly, the buyer will use this tactic to chip away at the seller’s profit.
Seller Solution: Stand your ground and be willing to walk away. Your confidence will usually win.
2. Hot Potato – In this scenario, the buyer tells you about a difficulty they are facing keeping them from purchasing the home. They then place the problem in your hands to fix.
Example: A buyer purchasing a $700,000 home is a little short on the down payment or a personal issue is holding the deal up.
Seller Solution: Don’t allow this. Stand firm and work with the agent to eliminate the problems one at a time.
3. Good guy, bad guy – In this strategy, the agent is the good guy and the seller is the bad guy or vice versa . Hiring a real estate agent helps protect buyers’ and sellers’ interests, and a buffer from possible confrontations.
Example: The buyer is purchasing a $700,000 home and has a running list of requests for the seller. The agent is accommodating, declaring the deal can be worked out, but every request seems to be vetoed by the seller only to be countered again. This tactic exhausts the buyer and their efforts, and they begin to withdraw.
Seller remedy: The success of this is letting the buyer get a few requests by, but if the buyer feels that they aren’t making any headway it can really ruin the deal.
4. The withdrawn offer – This is a strategy where the seller withdraws from the offer. This is using the technique that “everyone wants what they can’t have”.
Example: Buyers who are fully qualified and ready to buy will sit back and see if the price goes lower.
Seller remedy: You can submit your home on an auction site and set an end date to create competition.
Source & Full Article: inman.com
Stachel Law’s real estate clients include lenders, brokers, investors, consumers, sellers, and real estate agents, all of whom are counseled and represented throughout every step of a legal matter. The firm provides clients with extensive experience in complex real estate transactions and litigation.