Five tips for homebuyers and sellers to follow when it's time to make or counter an offer
By Erik J. Martin
If you're shopping for a home and think you've located the perfect property, you likely want to act with swift determination and submit a bid before somebody beats you to it. If you're a home seller, you're probably eager to hear offers and close a sale as soon as possible.
But for both parties, patience can be a valuable virtue, maintaining an emotional distance is recommended, and compromise can be the key to success. Because the truth is that when it's time to strike a bargain on a home sale, things don't always go according to plan or schedule. Working closely with your agent and adopting the right negotiation techniques, however, can lead to a more satisfactory transaction.
Before making or fielding an offer, it's important to refrain from attaching yourself too strongly to the deal, says Tali Raphaely, president of Armour Title Company in Miami. In short: Be prepared to walk away at any time without beating yourself up about it.
"Buyers and sellers have to play it cool and immediately develop the mentality that if it's meant to be it will be, but have a backup plan so that you don't need the deal too badly," Raphaely says.
Ron Rovtar, a broker with Cherry Creek Properties in Denver, suggests the following five tips buyers should follow prior to making or countering an offer:
1. Control your emotions and don't let personalities get in the way. "Search for the best acceptable outcome while keeping a cool head," Rovtar says.
2. Listen carefully to what the other side is telling you. "Listening is the foundation of so-called 'win-win' solutions," Rovtar says. "Where mutually positive results are possible, they should be pursued vigorously, but that involves being a good listener."
3. Don't cave too quickly because of pushback from the other side. A first reaction doesn't always mean an absolute "no!" Take the time to carefully explain the reasons behind your position, and ask the seller to explain what's behind his or her position. The other side may agree, offer a compromise or stick with their original answer. "Always remember — your position today need not be your position tomorrow. Good negotiators are flexible," he says.
4. Make your most important decisions in the morning. You are typically more alert and focused in the a.m. hours and may become less sharp and more willing to acquiesce as the day moves on.
5. Weigh every option and alternative available to you. When you understand your best option, it is a lot easier to know when walking away from the current deal makes sense and when staying engaged is better, even though you are not getting everything you want.
Sellers, meanwhile, should heed these negotiation suggestions provided by Chantay Bridges, senior real estate specialist with Los Angeles-based Clear-Choice Realty & Associates:
1. Don't be too demanding. Even in a seller's market; this type of behavior can quickly kill the deal.
2. Keep your counteroffer simple and to the point. "Do not keep adding on items for the buyer to pay or you may definitely send them running," Bridges says.
3. Counter on things that are must-haves, not just because you want to be greedy or take advantage. "If you are OK with paying your own title and escrow, don't be so quick to ask the other party to agree to it. They may be considering another offer somewhere else and yours will end up being discarded," she says.
4. Put yourself in the buyer's shoes. If you would never agree to the counteroffer you submit, don't expect someone else to.
5. Listen to your agent and trust the advice this expert gives you.
Lastly, keep in mind that the bargaining process can take anywhere from several days to up to six months. "Every step of the process takes longer than you would estimate," Raphaely says. "A delay in one step tends to affect subsequent steps, so be prepared for delays and unforeseen consequences. Getting angry or stressed will only exaggerate any issues that arise, so do your best to enjoy the process and keep things in perspective."
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