If the thought of playing hardball with your most valuable possession scares you, use these real estate negotiation tactics to help you approach the situation from a position of strength. With these strategies in hand, anyone can learn how to\u2014as they say\u2014\u201cfake it \u2018til you make it.\u201d<\/p>\n One of the most powerful tools a negotiator has is silence<\/a>.<\/p>\n \u201cAfter the buyer\u2019s inspection is the stage that we call the Request for Remedy, and it is the number one area where transaction fall apart,\u201d says Brandon Prewitt<\/a>, a top performing real estate agent in Columbus, Ohio<\/a>.<\/p>\n \u201cNegotiations go back and forth between the buyer and seller as they renegotiate the price, or request that repairs be completed before closing, or offer credits instead of making those repairs. If an agreement can\u2019t be reached, the sale falls through and the house goes back on the market.\u201d<\/p><\/blockquote>\n After the buyer send you their Requests for Remedy, the ball is in your court. In some cases, taking several days before responding could be wise. The longer your buyer waits without word of your reaction to their requests, the more nervous they will get that you\u2019re willing to walk away<\/a>. As time passes, your buyer may begin to doubt the reasonableness of their requests.<\/p>\n When in doubt, consult your real estate agent on whether this aggressive approach could be beneficial. They\u2019ll know what buyers respond to in your market, whether it\u2019s friendly communication or the mystery of remaining aloof.<\/p>\n Has your buyer brought you a lengthy laundry list of things they want done? They may be employing the negotiation tactic of asking for more than you expect to get<\/a>.<\/p>\n In actuality they expect you to say \u201cno\u201d to a lot of the items, in the hopes of using your guilt to their advantage<\/a>. By forcing you to say \u201cno\u201d to a whole lot, they\u2019re anticipating you\u2019ll say \u201cyes\u201d to a few extras that you would\u2019ve rejected had they simply asked for what they really wanted.<\/p>\n So how do you counter this crafty tactic? By responding to the list a little at a time, sprinkling in a few \u201cyes\u2019s\u201d amongst all the \u201cno\u2019s\u201d so it\u2019s less obvious how little you\u2019re conceding as a whole.<\/p>\n And since you\u2019ve taken the time to know your buyer and their lender, you\u2019ll be able to make sure those \u201cyes\u2019s\u201d are mainly to must-do items, rather than the unrealistic requests.<\/p>\n \u201cI always tell sellers that it’s unrealistic for buyers to expect you to make cosmetic improvements, like replacing the flooring, but if it’s a health and safety issue, those are things that we should consider fixing,\u201d advises Prewitt.<\/p>\n Making small, slow concessions<\/a> does two things: 1) it shows your willingness to work with your buyer, and 2) it prevents you from conceding too much.<\/p>\n Going slow also gives you time to consider your options. For example, nothing is off the table in negotiations\u2014even if some items have already been agreed to.<\/p>\n For example, maybe you\u2019ve agreed to make a few repairs, or pay for a home warranty<\/a> as part of the deal\u2014but in the eleventh hour, your buyer suddenly requests that you also cover closing costs, too. In that scenario, everything becomes negotiable again.<\/p>\n \u201cIf a buyer asks the seller to cover closing costs at the last moment, then we\u2019d look back over the contract,\u201d says Prewitt. \u201cThings we offered to do, like repairs, or credits, or paying for a home warranty\u2014those things are the first to come off the table if we\u2019re now going to cover the closing costs.\u201d<\/p>\n When your buyer presents you with their Request for Remedy list, your natural response will be to say: \u201cI will do this, but I won\u2019t do that.\u201d<\/p>\n But nothing halts negotiations faster than a flat-out no<\/a>. Responding in the negative ends the conversation, eliminates options, and comes across as confrontational.<\/p>\n Instead of saying \u201cno,\u201d savvy sellers offer alternatives that keep the conversation going, and signal that you\u2019re willing to work towards a viable resolution. One way to do that, is to offer credits in lieu of making repairs.<\/p>\n \u201cWhen the buyer comes back with a list of repairs, I prefer to try to negotiate a credit versus having my seller get the repair done themselves\u2014because we want the buyer to know that the work will be done to their satisfaction with contractors that they trust,\u201d says Prewitt.<\/p>\n \u201cWe don’t want to get into a situation where the buyer isn\u2019t satisfied with the work my seller had done. That sets us up for a stalemate right at the end of the process when emotions are running high. So, if there’s a situation where I can offer a credit versus do the repairs, I’m offering the credit.\u201d<\/p>\n But how do you get a buyer who wants a move-in-ready house to accept credits for repairs instead? This is where knowing your buyer comes in handy again.<\/p>\n If you\u2019ve taken the time to learn what your buyer loves about your home and neighborhood, you can use that knowledge to trigger a “that’s right” response<\/a>.<\/p>\n By expressing your understanding of their wants and needs in regards to your house, you remind them of all they\u2019re gaining by buying your home.<\/p>\n And as they are agreeing with you on how well your home meets their needs, they\u2019re more apt to agree to customize it even further to their liking via the credits.<\/p>\n There\u2019s a lot of uncertainty while the terms of your real estate contract remain up in the air. Uncertainty leads to nervousness\u2014which leads to bad judgement.<\/p>\n And if you\u2019re looking at the possibility of the buyer backing out as the \u201cworst case scenario,\u201d you\u2019ll always be nervous, uncertain, and in the weaker bargaining position.<\/p>\n If you want to avoid these fear-driven bad judgement calls, you simply need to make your peace with your alternatives if the deal does fall through.<\/p>\n Professional negotiators refer to this as the \u201cBest Alternative to a Negotiated Agreement\u201d or \u00a0BATNA<\/a>. In other words, what is your best option if the deal falls through?<\/b><\/p>\n The first step to determining your BATNA<\/a> is to list all possible options. Look at things like your days on market, your monthly housing expenses, and current market conditions to come up with all the possible outcomes if you do need to relist your home.<\/p>\n \u201cIf we received an offer within 24 hours and have several other buyers lined up, we can let this buyer walk and accept an offer from those buyers waiting in the wings,\u201d says Prewitt. \u201cBut if we were on the market 120 days and had 30 showings prior to receiving this offer, then you\u2019ll need to do what it takes to keep it.\u201d<\/p>\n Once you\u2019ve identified all your options, rank them. As you put them in order from best to worst, you\u2019re looking for two things.<\/p>\n The first, best option is your BATNA\u2014it\u2019s the first plan you\u2019ll put into action if the deal goes south.<\/p>\n The second thing you need to identify is your reservation point. This is the point at which the alternative, or BATNA, is going to be better for you than sticking with the current deal.<\/p>\n Knowing your BATNA and your reservation point gives you a solid bargaining range<\/a>, so that you never have to worry that the pressure of negotiations will lead you to accept a bad deal simply to salvage the sale.<\/p>\n Buying or selling a house is the most expensive financial transaction the majority of people will make in their lifetimes\u2014so it makes sense that both parties want to come out the winner. The buyer wants to get the best bargain<\/a> on the house, and the seller wants to make as much profit from the sale as possible.<\/p>\n That\u2019s why Prewitt says, \u201cNegotiating a win for both parties is easier said than done.\u201d<\/p>\n With both parties vying for the best financial outcome for themselves, it\u2019s easy to let a matter of a few thousand dollars sabotage the whole sale.<\/p>\n Finding the win-win<\/a> requires drawing on your research into both your BATNA and your buyer\u2019s desires.<\/p>\n For example, maybe you\u2019ve negotiated to pay closing costs if the buyer agrees to purchase the property as-is, without any additional repairs. But now your buyer is getting cold feet, worried that the age of the water heater and H-VAC system means they\u2019ll soon be shelling out thousands to replace them.<\/p>\n If your BATNA shows that letting this buyer walk will cost you several thousand dollars in housing expenses while you wait on another offer, it\u2019s worth spending an extra $300 to $600 on a home warranty<\/a> to put your buyer\u2019s mind at ease.<\/p>\n It\u2019s also important to remember that a win-win doesn\u2019t always have to be financial for the buyer.<\/p>\n Let\u2019s say you\u2019ve learned that one reason your buyer loves your home is the custom Koi pond in your backyard. A gentle reminder that most homes won\u2019t have that beloved feature may be enough incentive to accept a deal that slightly favors you financially.<\/p>\n If that alone isn\u2019t enough, let them know how much that Koi pond is really worth. While the appraisal may not have accounted for its added value, it does have a perceived value<\/a> to the buyer.<\/p>\n You can point this out to your buyer by sharing that having a Koi pond installed in another home without one will cost them an average of $1,193 to $4,838<\/a>.<\/p>\n Knowing your BATNA is all about knowing yourself, but if you follow the wisdom of famed military leader and strategist Sun Tzu in The Art of War<\/i><\/a>, removing fear from the negotiation battle requires knowing your opponent, too.<\/p>\n In fact, the Program on Negotiation taught at Harvard Law School teaches perspective taking<\/a> as one of four ways to find power in negotiation. Fail to consider your opponent\u2019s position, and you\u2019ll overplay your hand.<\/p>\n While some requests are frivolous cosmetic fixes that your buyer wants, chances are that the biggest repair requests are deal breakers they need done\u2014not because the buyer is insisting on those major repairs, but because their lender is.<\/p>\n Some loan types, like FHA, VA and USDA home loans<\/a> have appraisal repair requirements that must be completed before they\u2019ll approve the loan. These repair requests are typically related to health, safety, and the structural soundness of the property.<\/p>\n Keep in mind that killing the deal because your buyer\u2019s inspector or appraiser found major plumbing problems, or roof issues won\u2019t get you out of making those repairs.<\/p>\n \u201cWhen negotiating, I instruct my sellers to consider whether or not the repair requests cover things that we\u2019ll have to disclose moving forward,\u201d advises Prewitt. \u201cIf they do, then the next buyer will either want them fixed, or they\u2019ll ask for a repair credit.\u201d<\/p>\n If you know your buyer\u2014and the repair requirements of their specific loan type\u2014you\u2019ll be able to identify which requests are deal-killing non-negotiables.<\/p>\n Do you know why mortgage companies require their borrowers to put a down payment on the home they\u2019re buying? It\u2019s so that your buyer has something to lose if they were to default on the loan.<\/p>\n Savvy home sellers also use money as a motivator to keep their buyers at the negotiating table, by requiring buyers to put down 1-3% of the purchase price in earnest money<\/a> as part of the initial purchase contract.<\/p>\n The seller doesn’t automatically get to keep the cash<\/a> if the deal falls through. There are situations where the buyer can get their earnest money back\u2014such as, if the house appraises for less than the sales price<\/a> or if major flaws are found during the home inspection.<\/p>\n However, if the buyer violates the sales contract by backing out without a legit reason, this earnest money is forfeited to the seller as compensation. With money on the line, your buyer is less likely to back out simply because of cold feet.<\/p>\n You\u2019ve probably invested a lot of time, effort and even money in prepping your home before listing<\/a> it, so it can feel pretty insulting when your buyer comes to you with a long list of things you \u201cmissed.\u201d<\/p>\n Worse yet, maybe they dislike the results of fixes you already spent money to make. For example, let\u2019s say you spent a couple grand putting in new lighting, faucets and cabinet pulls with an oil-rubbed bronze finish<\/a>\u2014but your buyer wants you to replace it all with brushed nickel fixtures.<\/p>\n If you let these requests trigger an emotional response rather than a logic-based response, you\u2019ll be letting your emotions sabotage your negotiations<\/a>.<\/p>\n \u201cI remind my sellers to not get emotional about the buyer’s requests for repairs. It’s not personal,\u201d advises Prewitt. \u201cWe need to do our best to take the emotion out of the equation and look at the requests objectively.\u201d<\/p>\n Of course, emotions don\u2019t always have to be a negative thing in negotiations. Skilled negotiators learn to identify and redirect their own emotions<\/a>, while simultaneously eliciting positive emotions from the other party<\/a>.<\/p>\n Unfortunately, there are some buyers out there who are die-hard bargain hunters. Buyers obsessed with getting the best deal push and push with concessions and requests until they\u2019re certain they\u2019ve squeezed every possible penny out of you.<\/p>\n When this type of buyer learns that you\u2019re desperate to sell because you\u2019ve already made an offer on another house, they\u2019ll bargain you right up against your BATNA\u2014all the while bluffing that they’re willing to walk away<\/a> from the sale.<\/p>\n It\u2019s situations like these that make knowing your BATNA absolutely vital. Instead of succumbing to the pressure, you\u2019ll know that it’s in your best interest to walk away<\/a> from the deal instead.<\/p>\n Once you do, one of two things will happen. Your buyer will realize they\u2019ve pushed things too far and back off of their most unreasonable demands, or they\u2019ll let the deal fall through.<\/p>\n If that happens, don\u2019t panic. You\u2019ve already got your best alternative plan in place.<\/p>\n Don\u2019t go it alone at the negotiation table. The continuing need for negotiation skills is why hiring a top real estate agent<\/a> should be priority. According to the National Association of Realtors (NAR) in their 2018 Profile of Home Buyers and Sellers<\/i>, 84% of respondents ranked an agent’s negotiating skills as very important<\/a>.<\/p>\n \u201cWhen it comes to making decisions during negotiations, you really have to rely upon your agent\u2019s advice,\u201d says Prewitt.<\/p>\n \u201cYour agent knows best how to weigh all of your options and the factors that impact your decision, like accepting a slightly lower offer, versus paying your mortgage and housing expenses for several months while you wait for another offer.\u201d<\/p>\n Unfortunately, not all agents have the same negotiating experience. Statistics in that same NAR report showed that only 46% of all buyers believe their agent helped negotiate better contract terms, and only 36% felt their agent helped negotiate a better price.<\/p>\n Before you settle on an agent, ask them how they help their seller clients negotiate on price, seller concessions, and repair requests and check to see how many transactions they\u2019ve handled in the past.<\/p>\n![\"An](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/real-estate-negotiation-tactics-time.jpg\")
<\/a>1. Use time and silence to rattle the other side<\/h2>\n
2. Counter aggressive asks with small, slow concessions<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/real-estate-negotiation-tactics-email.jpg\")
<\/a>3. Offer alternatives instead of giving \u201cyes\u201d or \u201cno\u201d answers to requests<\/h2>\n
4. Know your BATNA (best alternative to a negotiated agreement)<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/real-estate-negotiation-tactics-koi.jpg\")
<\/a>5. Frame your counter as a win-win for both parties<\/h2>\n
6. Study your opponent<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/real-estate-negotiation-tactics-batna.jpg\")
<\/a>7. Make sure your buyer has skin in the game<\/h2>\n
8. Keep your emotions in check<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/real-estate-negotiation-tactics-walk.jpg\")
<\/a>9. Be willing to call your buyer\u2019s bluff by walking away<\/h2>\n
10. Still stressed about negotiation stalemates? Get expert help<\/h2>\n
![\"A](\"https:\/\/www.homelight.com\/blog\/wp-content\/uploads\/2019\/05\/Screen-Shot-2019-05-29-at-7.49.44-PM-775x406.png\")
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