Offer Negotiation Methods for Home Buyers
The best way to boost your offer negotiation skills into high gear is to appeal to a seller's emotions because residential real estate transactions are put together -- and sometimes blow up -- over emotional hotbeds of insanity, lunacy and what often seems to be bipolar mood swings. So it helps if you can give the seller a reason to care about you.
Put a Human Face to the Offer
This is a people business. Oh, you might think real estate is all about numbers and expediency, but it is really about people management and persuading people to do what you want. If you overlook the people factor, you could be headed for disappointment.
Sellers have an unexplained desire, sometimes buried deep inside, to know that the house they are selling will fall into the hands of a worthy buyer. To make a seller receptive to your offer, make the seller feel a connection to you. Showcase your vulnerability and sincerity in a letter. Make the seller feel as though you are the perfect buyer. Include the following details:
- The names, ages, and relationships of all occupants.
- A little history about your previous homes and how that relates to this home.
- Your occupation, education and struggles to get to where you are in life.
- List the specific reasons why you fell in love with this home.
- Explain why you deserve to live in this home and how you will care for it.
This is more difficult than it sounds. Sometimes in the excitement of writing an offer, buyers don't read the offer for clarity. Ask your agent to double-check the offer as well.
Don't leave out an essential element or give the seller any reason to write a counter offer. If the agent prepares a counter to correct mistakes, it might make the agent consider changing terms of the offer as well. Make it a no-brainer for the seller to sign the offer the way you wrote it:
- Verify the address is correct.
- Add up the earnest money deposit, loan amounts and balance of down payment to make sure the numbers equal the sales price.
- Check the closing date and possession terms.
- Discuss motivations for changing contract default periods.
- Review seller- and buyer-paid items and determine whether these items are "red flags."
- Generally, the party responsible for title and escrow fees selects the services -- has the seller selected the services and expects to pay for them, yet you want to choose? Don't let a small item become a big issue.
- How much time are you giving the seller to respond and who needs to receive the response, which will designate delivery acceptance?
Detail Selling Agent's Credentials
Just as the buyer tries to appeal to the seller, the selling agent should try to appeal to the listing agent as well. One of the biggest obstacles to a real estate transaction that listing agents face is incompetent selling agents. In the FAX or offer cover letter, a selling agent might want to:
- Share her experience and background
- State she is a full-time professional agent (to set her apart from many of the novices in the business)
- Indicate her willingness to cooperate
- Mention services she can provide that will help to expedite the transaction
- Express excitement over working with the listing agent