October 29, 2011 at 1:52 PM

Negotiating The Best "Home Price" Requires Emotional Stamina

Home price negotiations have many facets. Timing, information, motivation, leverage, value, competition, and more.  All are important aspects of negotiating any successful deal. Another equally important factor though, is the amount of emotional energy the buyer or the seller have.

During home price negotiations it's difficult to determine all the motivations of the other side. Without that information, it's always smart to understand our own emotional energy, before we make, or receive, an offer.

Let's face it, few buyers or sellers ever negotiate big ticket items like a home sale, all that often. So, when it comes to real estate, buyers and sellers are seldom equipped with the patience and grit to secure their absolute "best deal."  To complicate matters, negotiations can collapse from all sorts of emotions, or irrational thoughts. This is probably why so many real estate transactions are negotiated in a short period of time, most within the first 48 hours. Beyond this timeframe, the likelihood a deal being struck diminishes rapidly.

Now, I certainly do not have any official statistics to support my theory .  But, based upon a fair amount of experience in home price negotiations over a couple of decades, I believe an illustration of "time vs. chance of reaching a deal" would look something like the bell curve, below:

As the graph shows, the longer the home price negotiations continue, the more likely those negotiations will stall or fail in a majority of transactions (bank-owned homes and short sales excluded).

Recently, I worked with a young buyer couple who had the energy and determination to negotiate beyond the curve. After the first few days of offer and counter-offer, the parties dug-in and a standoff ensued. My buyer client was distressed, and I could see it in their eyes. This was their first attempt at a home purchase, and they really wanted that house. On the other hand, they appeared poised to walk away and risk losing it all, in order to get "their price." Ultimately, the seller agreed to our last proposal, but the home price victory came with some ambivalence and anguish for these buyers. Even more so, both parties risked losing what was already a reasonably good deal for each of them, prior to that last volley.

If buyers or sellers aim to get the most they can "muscle" out of their home price negotiations, they should prepare for the risk, stress, and disappointment of negotiating beyond the curve. That preparation will go a long way towards making a smart deal, or losing a nice opportunity.

So, the next time you're planning to buy or sell a home, I'd like like nothing more than to help you! With the many variables involved in home price negotiations, I think you'll appreciate my seasoned guidance in sizing-up all of your options. Call today, and let's talk about your plans! (303) 514-4000

 

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Michael Dagner

Call me today, and let's talk about your plans (303) 514-4000!