A home is most likely the largest financial investment that you have in your portfolio so when you’re selling, you want to make sure you’re getting the highest possible price. Conversely, if you’re buying you want that to be the best possible price. But there’s a lot more to negotiate in a real estate deal than just price, which is why it’s important to have a master negotiator on your side so you ensure you’re getting all you can out of the transaction.
There are some realtors, possibly even a majority, who feel that you shouldn’t negotiate. That if someone makes an offer on your home, you should just take the highest offer and be done with it. Some agents feel like buyers shouldn’t get involved in negotiating because the agent themselves may not be comfortable being a negotiator and may be fearful of losing out on something for their clients. But for both the buyer and the seller, negotiating is the most effective way to have a successful transaction that all parties are happy with.
A good negotiator knows that the power of negotiating is in being able to walk away, but the skill is in never having to. Contrary to what is shown in the movies, negotiating, when done right, is not a cut-throat blood sport. It is an exchange out of camaraderie that seeks to find the best outcome for all interested parties. Doesn’t that sound like the type of process you’d like to go through when buying or selling your home?
So what exactly can be negotiated in a real estate transaction? There’s actually a lot, so let’s explore.
- Price – this is obvious, and the most commonly thought of in terms of real estate negotiating. Sellers want the highest possible price, buyers want the best possible price. Working together, a resolution can be reached that everyone can agree to. The problems arise when one party is afraid to negotiate, or is afraid to counter something that has come their way. Even if the counter is the same thing you originally proposed, it still keeps the conversation going and shows the other party that you actually are interested in working out a deal.
- Contingencies – there are all kinds of contingencies, and some of them can be negotiated. Often times a financing contingency is hard to negotiate as that is driven by the lender. However, if the lender wants an appraisal, the buyer could decide to waive their appraisal contingency, taking on the risk if the property doesn’t appraise. When you’re negotiating on contingencies, you’re negotiating for the days within that specific contingency.
A subsection of the contingency negotiations has to do with home inspections. Here on the Peninsula, most sellers will do all the home inspections prior to putting the house on the market, and those will be a part of the disclosures. Buyers can negotiate to have their own home inspection done, but can also negotiate to have the seller cover some of the required home repairs that come out of the inspections. Not uncommon is to negotiate for costs for pest remediation or general handyman type repairs around the home.
- Personal property / inclusions – sometimes there’s just something in the house that the buyer feels “makes” the home, and they want it. It could be a piece of art, or furniture or a free-standing sauna. The general theory is that if you see it, you should always feel free to ask for it. The worst that can happen is the seller says no. Sellers shouldn’t be offended by these requests – they usually show that the buyer loves everything about the home, including your style!
- Timing / Closing date – as mentioned above in contingencies, time is often negotiated. You can negotiate timing on contingencies, but also on closing dates. Maybe a seller wants to shorten the time frame, or they have holidays coming up and need to stretch out their time in the home. With both parties working in good faith, you can find the timing that works best for all.
- Occupancy / rent back – rent back is when a property closes, but the seller stays in the home at a negotiated rent amount for an agreed upon period of time. This has been especially popular over the last several years with homes closing so quickly on the Peninsula. It’s not uncommon for buyers to offer free rent back to sellers, making their offers more appealing, but rents can be negotiated as well.
- Closing Costs – there are all sorts of closing costs, and all of them can be negotiated. Most common ones are escrow fees, title fees and city / county transfer taxes.
As you can see, there’s a lot that can be negotiated when buying or selling real estate, and this isn’t even the total list. At the end of the day it’s important to remember that if you don’t ask, the answer is always no. But if you do ask, you may just get into a conversation where you can secure some additional benefits for yourself.
One final note. I can’t stress enough the significance of having a master negotiator acting on your behalf. Someone who is fully committed to representing you and only you. You don’t want to work with an agent who is representing both parties – their loyalties will be too divided. I mean, how can they negotiate with themselves. Find an agent who is solid, strong and amiable, who isn’t afraid to push back some, who encourages you to identify your self-imposed limits, and who isn’t afraid to walk away. You never want to be pushed into a decision and if your agent is trying to do that, you may want to seek different guidance.
If you’d like to learn more about how I approach buying, selling and negotiating, feel free to reach out to me at email@example.com. I’m always happy to grab a cup of tea and talk business.
IMPORTANT NOTE: I have not and will not verify or investigate the information supplied by third parties.
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