Negotiation is a subtle art in real estate, but skilled negotiators can usually find some common ground that satisfies all parties. On the other hand, using the wrong negotiation tactics can sink a deal pretty quickly.
Here are some negotiation tactics buyers (and real estate professionals) should avoid:
1. Lowball offers: Going far, far below market value when you make an offer damages your credibility as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept, and if you’re not even approaching the low end of that range, they won’t even consider the offer. A lot of times these offers end up in the trash bin and the seller starts to shut down all receptiveness with the buyer that made the low ball offer. If you do come up to an expectable price you can expect the seller to be extremely difficult to negotiate with. Many times buyers end up paying more for the house when starting with this tactic then they would have just making a serious offer.
2. Incremental negotiations: Don’t continue to go back to the seller with small increases in your offer ($1,000 or less). The constant back-and-forth can grow tiresome and lead the seller to consider other opportunities. The seller will also feel that you are not a serious buyer or just cant afford their home. This tactic will lead to sellers that are difficult to negotiate with the same in number 1 above.
3. “Take it or leave it”: Try not to draw a line in the sand with your initial offer by issuing ultimatums. The seller can get defensive, hard to negotiate with and will consider other offers if you immediately show that you’re unwilling to budge. Even if it’s true, don’t make a show of it.
4. Nitpicking after inspection: Obviously if inspection reveals a major issue, it should be factored into the final sale price. But insisting on a lower price for every minor repair can put negotiations in a stalemate. Also beware of real estate agents that want to write up as-is contracts then request thousands in repairs after the inspections. This tactic will lead to a disgruntled buyer/seller experience every time, with many of these "as-is" contracts falling apart and the house going back on the market. If you want repairs done, state so on the contract. A good practice is to ask for items up to $1,000 to be repaired and negotiate if major repairs are found at the inspection. This way when an expensive repair like an air-conditioner is found we can ask the seller to repair or replace the unit or we will have to search for another property. A lot of times sellers are more than willing to keep their property in good condition and would repair the A/C. But going into a home purchase by being deceitful with as-is contracts then switching to we want everything fixed is never a good negotiation tactic.
5. Asking for more, more, more: Some buyers will request that the sellers throw in add-ons like furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason to build up resentment and think that you’re being greedy. I have seen buyers that wanted everything in the house and demanded it be left only to have the seller give everything to the neighbors because they felt the buyer was taking advantage of them. If you want items in the house let them know on the initial offer. If it is afterwards have your agent kindly ask the seller if they are willing to leave any items or if they are interested in selling x,y,z items. Many, Many Florida homes are sold Turnkey Furnished so it is possible to find a home that is 100% move in ready! Just ask us we would be happy to find them for you!