Real Estate Negotiation 101: Meeting of the Minds

Real Estate Negotiation 101: Meeting of the Minds

In real estate, a contract does not become legally binding until you have a “meeting of the minds”. It is at that point that all parties have agreed to a deal (signed agreements) which would be indicated by acceptance, aka signed agreements. Now the deal has closed and everyone can celebrate. So how do you get to that point? It is not by magic. Good Realtors get there through general real estate knowledge, a series of marketing efforts, networking, strategy, and good old-fashioned hard work.

Real Estate Negotiation With the Power of No

If you really want to understand the power of no then feel free to watch Chris Voss on Talks at Google. Essentially giving the power for someone to say no lets their guard down and saying yes means commitment. That commitment may feel uncertain and cause anxiety. “Oh my gosh, what did I just get into”.

Real Estate Negotiation Expert Tips

Many might think that real estate negotiation strategy is more about posturing, being firm, maybe using a few comps, and just being tougher than the other agent. Well, that is wrong in part because there are so many other tactics involved in the entire process that may get your offer accepted over others. Below are just a few tips to consider:

1. In a multiple offer scenario, one of our favorite strategies involves adding an escalation clause. Basically, this sort of clause would state that Jane Doe is willing to pay $5,000 more than your highest written offer (or whatever amount you want to pay over the highest written offer) but not exceeding XYZ dollar amount. If successful, you would then receive a copy of the highest written offer along with your acceptance.

2. Before you set yourself up for a multiple counter-offer situation, talk to the listing agent first before it gets messy. Get a sense of what their sellers need from a buyer. Even better, let’s try to meet the sellers in person. Again, if we find ourselves in a multiple offer scenario, then having the sellers put a face to your offer might get you to acceptance.

3. Deadlines make deals. Don’t send an offer without expiration. It only gives leverage to the sellers to continue shopping around.

4. Remember when we talked about data before? Data can include the following: average time on the market, taxes, HOA, flood zones, non-conforming uses, potential new construction nearby, zoning ordinances, neighborhood, school district, etc. See #6 as well.

5. Send the sellers a sincere letter expressing why you want to purchase their home. Maybe you met them, maybe you have something in common. Sometimes a heartfelt letter can be the reason your offer gets accepted.

6.?One of the biggest tools a Realtor can use is gathering a Competitive Market Analysis (CMA) or what is known as comps.

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