Score The House You Want By Avoiding These Bad Negotiating Strategies
July 27, 2017 |
Buying a home is very likely to be the most expensive purchase you'll ever make. So, it makes sense to try to negotiate where ever you can. But when it comes time to negotiate, there are a few strategies you should avoid, as not to risk offending the
seller and losing your shot at the home you’ve been dreaming of. This is particularly true in a low inventory market, where the seller might have more than one attractive offer and is looking for something that makes one offer stand out over the others.
The key to smart negotiating is having an agent to advocate for you without alienating the seller or even the other agent. If the seller is lucky enough to be considering multiple offers, that could easily relegate you to the bottom of offers under
Some common mistakes you want to avoid include:
1. Making a lowball offer
That seems to be a game too many buyers want to play, assuming that if they start really low, they’ll end up getting the house for a significantly discounted price. Depending on the circumstances, I often try to dissuade my buyers from doing this
in order to avoid insulting the seller. I recently had a seller who felt based of the offer amount, either the buyer’s agent didn’t know the local market values or the buyers were trying to manipulate the sellers. In either case, the sellers had no
interest in dealing with these buyers or even countering their offer, because in their minds, these buyers were going to be a problem throughout the entire selling process including inspections, appraisals and walk-throughs.
2. Negotiating in incremental amounts
This is tactic is exhausting! If you engage in too much back-and-forth, again you'll risk alienating the seller. When buyers keep making incremental counteroffers, they're just giving sellers a reason to move on to the next buyer. For example, if
you’re willing to go up $24,000, don’t make four additional offers of $6,000 each. This strategy tires out both sides and prolongs the transaction perhaps to the point that the sellers want out.
3. Making a 'one-way offer'
Just as the seller has a target price in mind, you probably have a point at which you'll be unwilling to budge and are willing to walk away. But, one of the worst things you can do is advertise this to the seller as an ultimatum.
Well, even in this hot seller's market, buyers push for this tactic—especially if the buyer is offering all cash, or if the property has been on the market for a while and is struggling with days on market. These buyers often feel sellers are lucky
to have received an offer. This needs to be a win-win situation for both parties.
4. Asking for a bunch of add-ons
You’ve finally found a place that's within your budget and you've fallen in love with the home—and everything in it! You’re trying to buy a lifestyle and unfortunately the sellers are not selling the décor with the house.
You might be wanting to ask for more than just the house, but please resist that temptation. Buyers sometimes think it’s a good idea to ask for furniture or appliances to be thrown in for free, or they might even expect that the sellers will just
leave their piano because it looks good in that spot. Again, you run the risk of offending the sellers particularly if you’re not offering them full price for their home and want their furniture thrown in! This can cause bad feelings and even result
in the sellers selling it on Craigslist instead of leaving it for a greedy buyer.
Of course, you can always ask to buy their stuff—in that case, they'd probably be flattered!
5. Using the inspection as a renegotiation tool
So, your offer was accepted, but then you start to get cold feet and you start searching for flaws that you could use to discount the price. Most inspectors are going to find something to fix—such as improving the outside drainage or upgrading the
windows—but those aren’t repairs that the seller is responsible for.
If an inspection turns up something major (like an old leaking roof or mold), of course that should be discussed and negotiated. But, asking the sellers to sell you a ‘perfect house’ or to lower their price isn’t appropriate or realistic.
While you can walk away if you can’t get the sellers to agree to repairing something major like a roof replacement or some minor items that annoy you, don’t lose sight of how much you’ve already invested in the process both in terms of your time and
money and be willing to let go of the minor things.