Best Negotiation Advice
While haggling may be commonplace around the world, save for country fairs, open markets and occasional trips abroad, it is a skill not commonly utilized by Americans. While it is true that during those trips to the Moroccan souk, we gleefully delight in bringing the cost of an item down to half the offered price, generally trips like these are few and far between. Thus, not giving us time to practice our negotiation skills and learning how to haggle like a pro. As a result, when it comes to making the biggest purchase of our lives—a home—most of us do not have the necessary negotiation skills to reach a price that would truly be in our best interest. Furthermore, as home buying is inherently personal, buyers can be too passive in negotiation as to not offend the seller. So, what is a hopeful potential Austinite to do if they want to buy a home, but wish to do so without paying too much or turning off sellers? Well, not to worry. Here is the best negotiation advice I learned from the best negotiator I know–my Dad–that will help you acquire the home of your dreams without breaking the bank.
Best Negotiation Advice – Step 1: Be Prepared
The easiest way to combat the emotionality of negotiating, is to come to the table with indisputable facts. And fact number one that you should have as a potential home buyer is knowledge of the market.
Before coming to the negotiation table, prepare yourself. Do your homework. Learn about the market activity and current trends. Be able to defend your offer with verified Austin real estate market data.
While the seller may believe that their first level addition or master bathroom renovation should guarantee them the return of a lifetime, if the current market doesn’t back that up be prepared to say so.
Both the road to hell and real estate fortunes were paved with good intentions. But as we all need to learn, just because you believe something, doesn’t make it true. As a buyer, as long as you stick with facts, you should come out on top.
Step 2: Be Aware of Competition
In home buying, the buyer’s worst nightmare is often a seller’s delight—competition. In a market as saturated as Austin with potential buyers, it is highly likely that the home of your dreams may, in fact, be the dream of many others.
In order to stay ahead of the pack, you must understand the competition. In a dreaded multiple offer situation, other prospective buyers are your competition. You are competing for the seller’s attention, approval and acceptance. Often that may mean upping your offer financially, but it is also an opportunity to use emotionality to your advantage.
If the seller is adamant that the house is to remain a family home to be shared by loved ones, writing a letter explaining your intentions for the home may put you in higher standing than those looking for a potential investment property and rental space. While it is true that money talks, humanity may also play a factor here. So, if you really enjoy the space, find a way to stand out and connect with the seller. It may make all the difference.
Step 3: Keep your Emotions Cool
There are a million and one reasons why humans fight. And while there may be many instances where righteous anger will work on your side, homebuying is not one of them. In this instance, anger defeats you—always. While it is undoubtedly frustrating when both parties agree preliminarily to terms only to have one side counter with a seemingly outrageous request, during negotiations it is always best to control your emotions. Unrestrained emotions make the other side stronger, and make you seem weaker and less credible.
Anger is also the breeding ground for disrespect, and once you go there, there is no turning back. Instead, stay calm and employ step number 4.
Step 4: Look for Common Ground
When the going gets tough, remember that both sides are after the same thing—a successful sale. You need a house, and they need to sell it. But the key to negotiating a good deal is to realize that for the seller, it is often difficult to let go. This may have been the house where they brought their children home and/or mourned the loss of their most beloved family member.
In order to get beyond these emotional blockades, look for common ground and employ practical empathy. Make sure that the other side knows that you see their viewpoint. If they feel disrespected or worse, that their feelings were invalidated, they will reciprocate those same behaviors in order to ensure that those same feelings are visited upon you.
To be clear, having empathy does not mean accepting or offering a bid that is too high or too low. It means ensuring that the other side feels seen. And if you can’t come to common ground, then it is best to follow step 5.
Step 5: Know When to Walk Away
If you can’t find common ground, be ready to take your emotions off the table and walk away. If the other side refuses to see reason, it may better to let it go. The beautiful thing about buying or selling a home in Austin is that there will always be another opportunity. Another buyer or another seller who will meet your needs and give you exactly what you are asking for.
Remember that it is better to walk away from a deal than to accept a bad one. Buying a house for many Americans is the first step to building wealth. But if you over buy or undersell your property, you will be putting yourself at a deficit. If you think of your home as a business asset, as well as a place to live, it may help you make the best, i.e. most rational decision for you and your family.
Step 6: Don’t Be the Last Person to Say No.
Here is where the Jedi Mind Trick comes into play. In order to have a successful sale, you need the seller to see you as somewhat agreeable. You are in the South after all, and hospitality and friendliness are what Southerners are known for.
Again, that doesn’t mean completely rolling over, but it does mean telling the seller what you will accept and not just what you will not. In other words, “Don’t be the last person to say No.” Always try to give the other side a place to “win.”
Step 7: It Is Not Always About Price
Additionally, the key to successfully buying a home in Austin may be to remember that price may not always be the most important factor in the seller’s decision-making process. More likely than not, sellers may be in the process of buying a house themselves. They may be moving out of state or need a bigger place to accommodate a rapidly growing family.
So, when it comes to negotiating, price may not be the most important factor. So, make sure you learn as much as you can about the seller as you do about the property in order to garner the best deal possible.
Step 8: Keep Your Lips Sealed
And here it is. The final key to great negotiation is keeping quiet. During negotiations, you may want to follow your third-grade teacher’s advice and “staple your lips together.” By talking less and listening more, you learn more about the other side. And this is how you will learn what cards to play and what chips they have on the table. By playing the game quietly and smartly, you will stand a better chance at striking the best deal and setting yourself up for beginning a new life in Austin.
So, there you have it. Eight tips from a master negotiator–my very own Dad to lead you to a successful home buying experience. Take this advice, and you won’t have to leave home to learn how best to negotiate buying a home. So, all the time spent in Moroccan souk can be just for fun.
Looking to Buy a House in Austin?
Our team of Austin buyer’s specialists can help you find the right house and negotiate a great deal on it. We know that area and the market, so we can help you wade through the loads of information to find the best part of town for you and your family. Then, when you find the right area, we’ll help you negotiate a great deal with the seller. To learn more about our team and how we work, check out our Austin Home Buyer section. Then, when you’re ready to open up a conversation, call us at (512) 827-8323, email us at info@11OaksRealty.com or fill out our Buyer Survey to schedule a no obligation consultation.