Negotiating is a part of every real estate transaction. It’s also a very popular topic of conversation. I can guarantee you that right now, someone, somewhere is talking about their “real estate negotiation”. But what role does negotiating actually play in real estate?

I’d say negotiating plays a fairly big role in real estate given that everyone wants to negotiate the best deal possible. Part of my job in representing my clients is to be their “point man” during the negotiations. It’s a good thing I like to negotiate. One of the reasons my clients hire me is because they trust me to negotiate for them just like I’d negotiate for my mom and they know that my negotiating skills and experience will help them get the best deal possible.

But I’m not here to make claims about being “The Best Negotiator of All Time”. I’m here to share some information that could help YOU negotiate a better deal and to share a few negotiating stories that you might find entertaining.

In real estate, there’s no one style fits all when it comes to negotiating. Every negotiation is different. You have to understand what your counterpart is hoping to achieve, recognize the negotiating style they’re using and then figure out the strategy and style YOU should use to help you achieve the result you want.

Let’s start by looking at a few different types of negotiating styles that seem to appear regularly in the real estate world:

• The Lowballer: This person thinks they’ll get the best deal by offering a ridiculously low price. It doesn’t matter to them that the property is worth a lot more or that their offer may insult the sellers so much that they dig in their heals and refuse to deal with them. They think that lowballing is the way to go in every negotiation.
• The One Timer: This person calculates the best offer they’re willing to make and makes it on a take it or leave it basis. This isn’t a bad way to negotiate; it’s actually quite fair and honest. Unfortunately, most people in residential real estate expect you to negotiate, at least a little, so when you make a one time offer they don’t believe you and almost always make a counter offer.
• The Nickel and Dimer: Also thought of as death by a thousand cuts, at least by me. This person is afraid of leaving money on the table by making too big a price move so he/she goes up or down in small increments.
• The Last Worder or The Egoist: These people won’t be happy unless they believe they got the best price possible. They won’t accept your offer and will only feel good if you accept their final offer because then they’ve had the last word. If you accept when they say “This is my final offer and not a penny more/less”, they’ll feel successful.
• The Two Facer: How many times have I heard someone say “And this is my absolute final offer!!!” only to have them make another offer 10 minutes later? Way more times than I can count. If you say it’s your final offer, then make it your final offer or you’ll lose all credibility in the negotiations.
• The Meet Half Way-er: This person can also be called the The Irrational or Illogical Negotiator. Here’s what they do. Let’s say a house is listed at $2m and is worth $1.9m. They start with an offer for $1.5m so you might think they’re Lowballers, but if the sellers give them a sign back for, say, $1.995m (which some sellers may do while others will choose not to deal with such a low offer), they raise their price to $1.75m and claim with incredible hurt in their voices: “The sellers are being so unreasonable! We’re offering to meet them half way and they’re hardly willing to budge at all.” Who cares if it’s half way? What if your first offer was for $1? Would the sellers be unreasonable if they refused to meet you at $1m when their home is listed at $2m and worth $1.9m? This argument makes no sense and carries no weight. At least not with me.

There are other negotiating styles as well, but these are the most common styles you’ll see in a real estate negotiation. Now that we have a sense of what the other side is up to, next time we’ll talk about how to counter each of these styles.

In the meantime, do you happen to know anyone that can use some real estate help? The kind of help that involves honest answers, straightforward advice, no pressure and being treated like family? If you do, please let me know the best way for me to connect with them because I’d like to offer them this kind of help. And as always, don’t be shy if you have any questions or comments about this post! Thanks for reading.