Real Estate Tip: 7 Winning Ideas To Avoid Negotiation Nightmares
Unlike negotiating with sellers at garage sales, flea markets, and antique stores, real estate negotiations take a lot more patience, confidence, and guts, or you could end up in the middle of a nightmare situation.
Avoid real estate negotiation nightmares with these out-of-the-box ideas by Trulia that could turn negotiation stalements to your favor:
Don't shy away from a challenging deal
When confronted by a difficult deal, don't easily get discouraged. A good agent should right out let you know if the deal is challenging but at the same time ensure that they will guide you through the process.
For instance, divorcing spouses, like on anything, would usually disagree on the selling price, or even at the idea of selling their property. Or, there may be boondocks of paperwork that need to be accomplished to clear the property.
In those cases, as long as you do your part of the deal, just let your agent handle the situation for you.
Be realistic about repairs
If the only thing that's getting in the way of your sale is a list of several repairs yet you don't have the luxury of time to go through all the hassle, don't fret. Ever thought about the possibility of making the buyer do the legwork for you?
The process may take some serious calculating to ensure that everybody gets their fair share but you just have to suck it up instead of risking a lost sale.
Keep stubbornness in check
In more times than you think, ego can actually ruin a home sale. Yes, that could happen.
Million Dollar Listings San Francisco's Roh Habibi shares his experience when his buyer paid $300,000 over the asking price for a single-family home, but the deal almost didn't push through because... you take a guess. Well, the sellers wouldn't give in to putting in a washer and a dryer to the sale.
So when this happens, just take a deep breath and keep your eye on the goal.
Look at the big picture
Sometimes, negotiations take longer than necessary because of minimal sums. Also, when you are stuck with a specific number with no leeway, deals become evasive.
For Douglas Elliman of Million Dollar Listing Miami, sellers should look at the monthly carrying costs. "Do you really want to be on the market for potentially a few more months?"
Buyers on the other hand should view it as losing their potential new home over a small amount of money.
"Almost 100% of the time, both parties will meet in the middle," says Leavitt.
Understand the difference between prequalified and preapproved
Buyers should make sure that they get preapproved and not just prequalified before getting in a deal.
When lenders prequalify buyers, it is not a guarantee of getting a loan. Prequalification only determines the estimate amount that the buyers can borrow based on the information they provide.
Preapproval, on the other hand, already means that a loan is in place that the buyer can avail within a specified period of time.
Closing the deal is quicker and less stressful once the buyer has in their hand the preapproval letter from the lender.
Be realistic about short sales
It's a different negotiation when it comes to a short sale. Sellers in this case are considered to be financially unstable which means repairs or providing repair credit is off the table. The property may also have liens that the seller want or need the buyer to take care of.
The deal could still push through if the buyer gets a good number after calculating the costs of repairs and liens.
Prepare to walk away
Know when a deal is worth it and when to walk away.
"You can almost always work out an agreement, even when some part of the transaction has gone terribly sideways or down," says Bruce Ailion, an Atlanta real estate agent.
But when things begin to turn ugly and there is inability to stay civilized among the parties involved, that's when you walk away. "Life is too short to deal with difficult people. Some transactions are just not meant to happen."