Five Negotiating Tactics that can Kill a Deal

Negotiation is a subtle art in real estate, but skilled negotiators can usually find some common ground that satisfies all parties. On the other hand, using the wrong negotiation tactics can sink a deal pretty quickly. Here are some negotiation tactics buyers (and real estate professionals) should avoid:

1.     Lowball offers: Going far below market value when you make an offer damages your credibility as a buyer and can be insulting to the seller. The seller has a range in mind that they’ll accept, and if you’re not even approaching the low end of that range, they won’t even consider the offer.

2.     Incremental negotiations: Don’t continue to go back to the seller with small increases in your offer ($1,000 or less). The constant back-and-forth can grow tiresome and lead the seller to consider other opportunities.

3.     “Take it or leave it”: Try not to draw a line in the sand with your initial offer. The seller can get defensive and consider other offers if you immediately show that you’re unwilling to budge. Even if it’s true, don’t make a show of it.

4.     Nitpicking after inspection: Obviously if inspection reveals a major issue, it should be factored into the final sale price. But insisting on a lower price for every minor repair can put negotiations in a stalemate. Remember, when you sign a sales contract you are agreeing to purchase the home in its current state. If something bad comes back on the inspection report by all means address it, but it is not meant to be a ‘honey do’ list.

5.     Asking for more, more, more: Some buyers will request that the sellers throw in add-ons like furniture or appliances that weren’t included in the listing. Try to avoid giving the seller a reason to build up resentment and think that you’re being greedy.

This is not to say that none of these tactics can be used, but they need to be used correctly. Saying this is my final offer after negotiating isn’t a bad thing, but starting with it may be. If you are unsure how to proceed, think about it from the sellers perspective. What would YOUR reaction be if a buyer picked apart the house after an inspection for minor repairs? Or threw you a low ball offer right off the bat? Chances are if you feel some sort of way about it, they will too. So if you really love the home, be mindful of your negotiating in order to secure the deal.