Buying a home is a very complex situation, as negotiations are required. Negotiations can be tricky, because it is, in itself, a skill. If you don’t negotiate properly, you could lose out things that may have worked out to your benefit. You maybe could have worked over details, and not taken a loss over something. Here’s a rundown of some of the biggest mistakes you can make when it comes to negotiating the purchase of a house.
1. Not understanding the seller. Each seller is different, as they are humans. Stop thinking of a seller as a general term to describe a person. Each person is different and unique; all of us have our own set of fears. You must question what the current pressures on the seller is regarding this house. Has it been on the market for a 11 months? Are the other homes in the neighborhood currently slow to sell?
Perhaps the seller is undergoing bankruptcy or has already purchased another house before trying to sell this one, and is in dire need of the money. The sellers realtor could be bluffing, when in reality, their client is currently desperate. If you don’t sense this, you will end up feeling the need to pay more, and negotiate less, in fear that you will lose the house. When really, they were terrified that they were going to lose you.
2. Not doing research. This involves figuring out how long a listing has been in the MLS, the current temperature of the surrounding market, and other things in that nature. This is where your realtor comes in; if they are a good realtor, they should be armed with facts, and ready to strike. However, with the availability of this type of information readily available online, there is no reason that you shouldn’t be looking up all of the information as well and then collaborating with your realtor on the research. You can never have enough information.
3. Being too transparent. This is probably the worst mistake you can make in any negotiation whether it is for a dress at a retail store, purchasing a car, or playing poker. A good rule of thumb not just in buying a home, but in every aspect of your daily life, divulge as little about yourself as possible. There is an excellent quote that says, “Never miss a good chance to shut up.” For example, if you want to pay all-cash for the house, the sellers don’t need to know this. If they know, they will keep firm on the asking price, as they know you can more than well afford it.
4. Not having other concrete options. With most things we see in life that we feel like we “have” to have, we cling onto it thinking, this is the only one I want. Therefore, if you have multiple options to begin with, you don’t immediately become attached to this “one perfect home.” You will be able to take emotions out of the equation, which is essential when purchasing a house.
The seller automatically wins when you’ve decided to will take their home no matter what the cost. You should be willing to walk away, and this will be easier for you if you actually are. The way to do this is by having a couple other options that you love, and would be upset, but alright if you missed out on this one.
5. Using an indirect form of communication. Do not just communicate through outlets such as phone, fax, and e-mail. The most effective way to influence or persuade a seller is face-to-face. Again, this is true for anything in life. This is because when negotiating in person, you have the advantage seeing the sellers body language, which will allow you to pick up on cues such as their voice tone.
Non-verbals are key in negotiating. You’ll be able to see them sweat over certain questions, particularly money. If you can’t be there, you should have a realtor who is willing to do this for you.