With real estate deals come negotiations, and in order to get the best deal for your client, you must be equipped with powerful negotiation skills and strategies. Often, there will be some disagreements between the homebuyer and seller. These may pertain to the price, the terms of the sale, or many of the other factors that come into play with such a large investment. Either way, you will most likely have to put your negotiation tips into play. In order to ensure a fast and easy closing and an optimal experience for your clients, avoid making these top four mistakes when negotiating real estate.
Giving Your Best Offer Up Front
You never want your clients to give their best offer from the get-go. Not only is this one of the most important negotiating tips for real estate agents, but it’s also a well-known sales tactic used across several different industries. Why? Because most people list higher expecting to negotiate with potential buyers. One of the best negotiating tips you will ever receive is to never put everything on the table right away. When it comes to sales, start in the middle, and reasonably work your way through the negotiation process to ensure the transaction goes smoothly. The exception to this rule is when the seller already has multiple offers and the client really wants the house.
Revealing Too Much Information to the Seller’s Agent
As a real estate agent, you probably already know that revealing too much too soon is one of the biggest negotiation mistakes one can make. However, your client may not. Buyers don’t always understand that some information should not be revealed to the seller’s agent before they make an offer, and more importantly, that keeping some information between the two of you can be incredibly beneficial. Instruct your buyers to refrain from talking too much in the presence of the selling agent, especially if the conversation pertains to financial information or the sale in general.
Including Insulting Contingencies
This can be one of the harder negotiation tips to follow because as a real estate agent, you don’t necessarily have control over your clients' wishes and you have to represent their interests. However, you can use your real estate experience and skills to inform them of what can result from asking the sellers to replace the carpets in order to remove a lingering smell. Whether putting in an initial offer or responding to a counter-offer, it’s imperative to never insult the seller, as this could result in them refusing to negotiate any further. Rather than submitting a full-price offer with contingencies, discuss a plan with your clients to offer less than asking in order to make the improvements themselves after closing.
Being Unaware of the Sellers Wishes
Some of the most common negotiating mistakes aren’t always a result of lack of experience from the buyers. It is your job to be equipped with the knowledge and negotiating skills to be able to ensure that your clients are informed as much as possible. Having an open dialogue with the listing agent at the open house or over a phone call before submitting an offer is a powerful opportunity to take advantage of. It's rare for a listing agent to be uncooperative when asked questions that aren't related to what the seller will and will not accept financially. Ask questions such as "What date is the seller looking to close by?" or "Have there been any other offers submitted?". Lining up your clients' interests with the sellers in a purchase and sale agreement is a smart move that you might regret not making down the road.
By knowing these top mistakes, you can allow yourself to be wary of committing them yourself. Avoid these four situations to ensure you perform at your best for both you and your client in all negotiations.
For relatable content, read how to Present and Negotiate Multiple Offers
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