Professionals know what to do to get an agreement. Here are some tips to increase the odds of getting your offer accepted:
1. Know What the Seller Wants and Needs
How well do you understand the seller’s situation? A well trained negotiator will always start with the self-interests of both parties vs. just their own. A buyer’s offer must at least adequately satisfy the seller’s needs and interests. There are many value elements in a real estate transaction (not just money), so take the time to accumulate information, and understand what it will take to satisfy the seller. Understanding all the money factors, timelines, personal property options, and offering flexibility can all add value and appeal to your offer.
2. Improve Your Appeal.
Homes are listed to be sold, not to be for sale. Show the seller that you have what it takes to close on a house. Show them that you know the path of how to get there! Getting through underwriting before making an offer makes the buyer look stronger, almost equal to a cash buyer. If you have a reputation for closing a type of transaction that is at hand, show that to the other side. If you are anticipating any issues, show the other side how you can help them overcome them when the time comes. Testimonials from past clients as well as other agents can really boost your appeal!
3. Improve your Plan B (Your BATNA).
BATNA (Best Alternative to Negotiated Agreement) is your next best option if you can’t reach agreement in your current negotiation (and you always have a BATNA!). You can think of it as your “Plan B”. You are usually in a better negotiation position if your Plan B is strong, and in a weaker negotiation position if your Plan B is unattractive. Make yourself look stronger by improving your Plan B – e.g. fall in love with two properties, have a flexible timeline, etc. At the same time, try to make your offer better than the other party’s Plan B.
4. Build Trust with the Listing Agent.
Trust is the currency of sustainable negotiations. Take the time to build rapport with the other agent, show yourself to be someone who is professional and collaborative – interested in a “Win-Win” type of a transaction. Trust opens communication channels, which in turn allows you to learn more about the other side’s needs, and tell them more about your side’s needs.
5. Look for Connections.
It is extremely unlikely that you will be able to put a deal together with someone who doesn’t like you or want to do business with you. Connections, compliments, and cooperation are all factors that make you more likeable to the other side. Look for clues and signs of what is important to the other side, and see if you can point out those connections. Do not downplay the value of connections – we recently heard that a seller picked an offer over others once he learned that the buyer was also a fan of Golden Retrievers!
Perhaps the biggest mistake buyer’s agents make is to fail to communicate sufficiently with the other side. Ever seen an offer come in on a property without so much as a phone call? Think about it – how is that agent able to communicate any of the principles we point out above? Always be accessible and professional with your communications. Create opportunities to interact with the other side to build trust and get more information.
7. You Go First.
Most negotiations include give and take or what is often referred to as reciprocation or concession making and taking. The buyer’s agent might say to the listing agent “My buyer will agree to your seller’s closing date if in return your seller will agree to a slightly lower price”. If you want the other side to do something, you must go first and role-model the behavior you want reciprocated. So, if you want something from the other side, offer them something of equal value first.