Negotiating An Offer

There are literally hundreds of items and strategies that you can negotiate in a real estate transaction. Usually, you’ll deal with just a handful when making your offer, such as the standard financing and home inspection contingencies. Most purchase contracts, especially if they are standard documents, contain boilerplate language that may not fit your situation and may in fact be unfavorable to you. These are areas you need to negotiate carefully. The more you know about the language and art of negotiation, the better the deal you can make for yourself, and the more money you’ll save in the process.

Technique When most effective Possible outcomes
Start low and
move up
Works best for properties that are overpriced in slow markets Seller rejects outright or counters to get you to increase your offer, and you move up and agree on a price that comes close to what you want to pay
Offer close to asking price Works best for properties that are priced well in active markets Seller may accept outright or counter to get you to increase offer slightly.
Offer the top price you can afford Works best in hot markets Seller may reject and you may have to walk away
Save terms to bargain Works best in situations where seller is highly motivated Seller may trade price concessions for your agreement to close sooner or take charge of repairs after the inspection
Give up something to get something Works in most situations Seller ends up taking something you don’t really want but you ask for initially to gain a lower price or other concession
Move in small increments Works best for overpriced properties in slow markets Seller may agree to lower price if given time to adjust to the idea
Focus on issues you can resolve to keep momentum going Works best after several rounds of negotiation Seller and buyer come to terms after resolving easiest issues first
Be unpredictable Works best after several rounds of negotiation Seller accepts your offer after you suddenly make sizeable change
Make an
either/or offer
Works best after several rounds of negotiation Seller accepts one of two scenarios you offer
Split the difference Works best after several rounds of negotiation Seller and buyer settle on price exactly between asking price and offer
Set deadlines
for action
Works best in any situation Seller and buyer will act more quickly and decisively if given a time limit
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