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Negotiating Gambits Can Make or Break the Home Sale, Part 2
By Shirley J. Hagler
In Part I of this article, we uncovered that negotiating gambits like budget limitations, nibbling and good guy/bad guy can have an impact on whether you win or lose when negotiating a real estate purchase or sale. We'll continue our review of negotiating with three additional, potentially powerful, negotiating venues.
Negotiating Strategy #4: higher authority - One or both of the players must defer to a third party for answers and/or approval. The higher authority could be a lender, an appraiser, a relative, even a boss. It's one way to stall for time and to evaluate all options before committing.
Antidote: If you're making an offer that requires a response, set short time frames for the other party to respond back to you (if doing so won't be detrimental to initially losing the other party, i.e. an out-of-town buyer, etc. ) Additionally, communicate to the buyer that you know s/he is capable of making sound decisions, with or without third-party input. You'll quickly learn if the higher authority is necessary in the decision making process. If so (as in the case of a relative lending the buyer down payment monies, but requesting that s/he first review the property) consider it a necessary roadblock with a timeframe that you'll have to deal with.
#5 Negotiating Strategy: The stall: The stall is a decision not to make a decision. It usually shows that while the buyer or seller has some positive thoughts on the offer, there are also some negative points that need to be addressed (as is often the case with counter offers.) It could also signal that the buyer is waffling between making offers on two properties; or, in a seller's case, might be trying to decide between two different offers.
Antidote: Ask the stalling party to isolate their concerns about the offer. Questions like "what could we change that would convince you to take this offer now?" While you need to build the party's desire to accept the offer now, don't forget that you have a powerful negotiating tool at hand---revoking the offer before it is accepted by the other party. While this may seem like a dire measure, there's no harm in communicating to the party that you understand you can withdraw the offer at any time prior to receiving their signed acceptance. This may be just the nudge needed to precipitate a decision.
Negotiating Strategy #6: Reduce-it-to-the-ridiculous - The idea is to make something you're negotiating for seem so insignificant, that the other party would appear a fool to say no! For example, the buyer might say, "Tell the seller that I won't go with the additional $5,000 price he countered back with". In other words, the buyer is willing to lose a house he loves and wants to buy for $5,000 (given that the property is really worth the additional money.)
Antidote: As the seller, your response to the buyer could be "Tell that buyer that the $5,000 additional will only cost him 47 cents more per day to buy our house. If he's too cheap to swing that, he doesn't deserve a quality home like this! (As with all negotiating gambits, you must avoid turning a negotiating tactic into a name-calling session, even if it appears to be temporarily in the name of progress!)
The bottom line is that no one (neither buyer nor seller) gets to win all of the marbles; contrarily, no one should lose them all. Identifying negotiating gambits and more importantly, their antidotes, can help you structure a win/win transaction where all parties feel as though they've compromised, but won. Good luck with productive and fair negotiating!
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