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7 Simple Rules for Negotiating Your Price

by Houston Agent

sissy-lappin-lappin-properties-houston-real-estate

Sissy Earthman Lappin is the broker/owner of Lappin Properties in Houston.

By Sissy Lappin

I have read several books on negotiations and made a short list of what I learned that has helped me in my business. I have negotiated deals from $90,000 to $16 million, and the same rules apply.

In order for negotiations to go smoothly, you need set them up properly; operate in a gracious, efficient, considerate manner. Here are my top seven rules I follow:

Rule 1:  Try to avoid going back and forth more than three times.
Generally, each round of negotiations takes a specific tone, with each round getting more contentious. In the first round, the buyer and seller are thinking about the home. In the second round, they stop thinking about the home and start thinking about the money. In the third round, they start thinking not about the home or money but about the deal itself –and that’s when the resentment sets in. After the third round, egos enter the picture and things get personal. Don’t let the negotiations progress to the point where things get personal.

Most people have only experienced negative negotiations, usually in the context of buying a car. It’s likely that your buyer will be predisposed to negativity in the process of working out the contract. However, my experience has taught me that dealing straightforwardly and graciously can result in a win/win outcome for buyer and seller. Make all desired changes on the first contract and fully explain your reasons. Get it all on the table and maintain an attitude of cordial respect.

Rule 2: Stay focused on the goal of completing the sale.
Never let the buyer’s or seller’s emotions or personality distract from your goals. Stay calm and gracious, just as you would in a business negotiation. The end goals are the same. Remember that it’s not about winning or losing, but about getting the house sold.

Rule 3: When your buyer or seller gives a concession, ask for something in return, even if it’s just something small.
In today’s market, buyers are aggressive. If you don’t assert yourself (in a reasonable way), the buyer might come back and ask for more.

For example, say the buyer wants a certain repair done. If you agree to this, you might ask to close earlier. If you don’t agree to make the repair, offer to leave the window treatments instead.

Even if you don’t get what you ask for, you’ll have set the stage for the buyer to make fewer demands.

Rule 4: Never gloat or talk about your sale in detail with others.
Keep everything confidential until it closes. You don’t want anyone telling your buyer that he or she overpaid, or telling your seller they sold too cheap, which people love to say regardless of the price in question.

Worse, talking too much could shut your deal down completely. I once knew a agent who went around bragging about what she got for her listing. The neighbor down the street, who had been thinking of selling, heard the price and put her home on the market during the option period of the contract. The buyer walked out on the earnest money contract, went down the street, and bought the home that was priced for a few thousand dollars less! This would never have happened if the agent had kept her mouth zipped. You don’t want to learn this lesson the hard way.  Your seller needs to do the same until the deal has closed!

Rule 5: When you and your seller come across something on the contract that you want to counter, mark it and go back to it.
Take in the sum total of the contract before you start thinking about countering. If the rest of the contract is great, the seller can probably live with the one thing they don’t like.

Rule 6: Avoid the words “no” or “never,” which will create a negative atmosphere in negotiations.
Negative words make sellers/ buyers think you’re shutting the door. Try saying, “That doesn’t work for my buyer/seller – but this does.”

Rule 7: Always ask your seller/buyer to counter a contract within 24 hours, and preferably within 12.
You want to keep the enthusiasm in the negotiations. The ultimate deal-killer is procrastination. After 48 hours, the offer is typically null and void in the buyer’s mind.

The rule I go by is: the last party to sign or initial is the party that is responsible for getting the contract to the other side. For example, if your buyer makes an initial change on the contract, then the ball is in the buyer’s agent’s hand to get the contract to the other agent, and vice versa. You need to inform the seller’s agent what you did, when you did it and when you’ll be dropping (or emailing) the paperwork off. Let the other agent know that this is the system you want to operate on and you’ll prevent miscommunications – as well as keep the ball rolling.

Sissy Lappin is the broker/owner of Lappin Properties in Houston. She can be reached at:

Direct: 713.922.0602
Website: www.lappinproperties.com
Email: [email protected]
Blog: www.southernhousemouth.com

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