The Edmonton Real Estate Blog

Please visit our new location for new posts.

Friday, August 04, 2006

Buying Real Estate? Negotiating Tips...

Follow this reporter's instructions and you could possibly lose thousands of dollars, and you may not get that dream home you want. Although she offers insight into one particular scenario, a trained and experienced agent will have the ability to guide you through more than this cookie cutter scenario. If you follow her advice, you could end up fawning over someone's property and they may start thinking that they have underpriced their property, or worse that you are insincere. In a fast paced market like Edmonton information is your key to success.

The author's instructions are that you let the seller know just how much you love, and want to buy their home. I've had sellers read heartfelt letters written to them from buyers, when they were reviewing offers on their home. Some have liked it and some sellers have reacted adversely. The emotional attachment to their home clouded their decision making, and they considered less emotional options, especially when conditions are attached to the contract. They felt that as excited as the buyer is today, they may become emotionally remoresful tomorrow causing their deal to tailspin. They were looking for the stable option.

Not to mention a professional can assist you in properly drafting an offer that would be more likely to be accepted by a seller.

The appropriate strategy should be made in consultation to the circumstances surrounding your transaction with your agent, and your personality should be a part of the equation. You should not negotiate in a style that is uncomfortable to you, otherwise your chances of success will deminish.

If you want a journalist's opinion on writing an article, especially on how to sensationalize it so that it catches a readers attention consult them, if you want an experts opinion on something then consult the experts.

Dian Hymer: Starting Out
A few tips on appropriate negotiating posture
Originally posted on August 03, 2006

A prospective home buyer recently stopped by a Sunday open house to take a second look at a listing that caught his fancy. His real estate agent had advised him to keep a poker face as he walked through the house, and to ask no questions of the listing agent. Otherwise, he might tip her off that he was interested.

This is a popular negotiation strategy: Don't show the other party that you might be interested in striking a deal. The presumed consequence if you do show enthusiasm is that the other party (the seller in this example) will gain an advantage over you.

There is usually something that backfires. Many home sellers have strong emotional attachments to their homes. With these sellers, the sale price is important, but it's not all that matters.

For example, a couple with two small children had been looking for a new home in Oakland, Calif., for months. They fell in love with an exceptional property and decided they wanted to buy it. They were the first buyers to make an offer, but other offers followed shortly after. The first buyers' offer wasn't for the highest price.

The sellers were impressed by a letter from the first buyers in which they promised to take care of the property. The sellers had bought the house as a rundown fixer-upper and had renovated it extensively. It was important to them that the property ended up in the right hands.

When the offer from the first buyers was presented, their agent told the listing agent that the buyers would welcome a counteroffer if their price wasn't right. If the sellers hadn't known that the buyers were willing to pay more, they might have gone with the highest offer. However, knowing how committed the first buyers were, the sellers decided to offer the house to them at a higher price. The offer was accepted.

Expressing interest lets sellers know you're serious. Your enthusiasm can put you in good stead with the sellers. This doesn't mean that you have to reveal the highest price you're willing to pay, or the terms on which you'll buy the property.

HOUSE HUNTING TIP: Being the first buyer of several to commit can give you an edge. Many buyers retreat when they hear that someone else might be interested in the property. Some don't want to get caught up in a bidding war.

Others back off because they don't want anyone else to know what's on their mind. They feel that by tipping their hat, they will in some way diminish their negotiating posture. This isn't necessarily so.

In another example, prospective buyers decided to write an offer on a Piedmont, Calif., listing days before the seller was prepared to hear offers. There were three other interested buyers who vacillated between writing offers and waiting to see if the seller accepted the first offer. At the last minute, the other three buyers decided to wait and see what happened with the one offer that was written. Had the committed buyers not revealed their position early on, other buyers might have stepped forward with offers and they would have found themselves in competition.

A straightforward negotiation strategy is most effective if you can also convince the seller that you have done your homework. An earnest buyer who is preapproved for the financing he needs, and who has read all the pertinent disclosures on the property, is a buyer who will be looked on favorably by the seller.

THE CLOSING: Telling a seller that you like his house doesn't mean that you have to overpay for it.

— Dian Hymer is author of "House Hunting, The Take-Along Workbook for Home Buyers," and "Starting Out, The Complete Home Buyer's Guide," Chronicle Books.


Post a Comment

Links to this post:

Create a Link

<< Home