The most critical part of the home buying and selling process is the negotiation, during which the specific terms and conditions of the transaction are hammered out.
Negotiation may take a few hours, a few days, several weeks -- or even longer. Negotiation may be predictable, calm and smooth, ending up with an agreement that represents a middle ground between the initial positions of buyer and seller. Or it may be laborious and contentious, with one party standing firm and the other making all the concessions.
When it comes to putting real estate deals together, there are no rules of negotiation. Except that when the other side offers something, you have three choices. You can accept. You can reject. Or you can counter.
Lack of a predictable negotiation process may be frustrating. I've seen buyers make respectable offers that sellers rejected out of hand. Though I always counsel buyers that any offer can be rejected without a counter, they often feel snubbed and ignored when the seller does not come back to them with something -- anything -- to work with. In disbelief, some started making judgments about the sellers which may not have been accurate, and which made them crazy.
Although there are no rules of negotiation, there are guidelines which may make the process less stressful:
1. Don't have preconceived expectations about how it should go. If negotiations go smoothly, consider it a bonus.
2. Don't take things personally. It's important to react in a businesslike, not personal, manner to counter-offers from the other side.
3. Try not to judge. A "difficult" seller may be facing financial, medical or personal issues that color his behavior. An "unrealistic" buyer may be represented by an inexperienced agent, or misinformed about market conditions. Maybe the agent on the other side is counseling his or her clients properly, but they won't listen. Maybe one spouse is reasonable, but the other is a hothead. Maybe the other party believes that unless the negotiation is tough and nasty, it's not being conducted properly. You can't change any of this. But you don't have to buy into it.
4. Know when you have the advantage, and when you don't. If the seller doesn't have to sell, and his property is the only one you want, then he's in the driver's seat. If you do have to sell, and the only interested party after six months on the market offers a low number, then the buyer has the advantage. Different negotiation strategies are appropriate depending on whether you have the advantage, or not.
5. Do your best, then walk away. Sometimes this gets the other side's attention and brings about progress. Other times it's best to move on to another property.
6. Understand that timing is everything. A seller may reject your offer today but accept the same one 60 days from now. If you're still in the market then, your patience may be rewarded. If not, you may feel frustrated when you learn a property you bid on six months ago sold for 10 percent less than you offered!
7. Remember that being nice will always be to your advantage. No matter what happens, it's important to be straightforward, polite and respectful during negotiation. There's a big difference between an offer that disappoints a seller made by a polite, earnest buyer vs. the same offer made by a buyer who comes off as arrogant, negative or know-it-all. Negotiation is a process. Letting it unfold, stepping back and trusting an experienced agent to interpret what's happening is the smartest thing you can do.
Negotiation is where your agent earns his or her commission. Make sure you hire a real estate professional who is confident about negotiating, has a good reputation in the agent community and who will help you understand what may be happening on the other side, offering you options and insight at every step.
Evi Coghlan's "The Real Deal" appears every other Friday. She is a licensed real estate agent with the Riverside Avenue office of Coldwell Banker and a former marketing consultant to Fortune 100 companies. She may be reached at 203-247-6691, by emailing her at email@example.com, or visiting www.evicoghlan.com.