We’re now ready for part three of our negotiating trilogy. We started by looking at different negotiating styles. We then examined some responses you can use when faced with each negotiating style. In this final segment, we’ll look at what happened in some real life negotiations to hopefully pick up even more useful tips.

Number 1: My very first real estate negotiation was a somewhat weird experience for me. I had just finished practicing law and was filling in for a fellow agent. The property was listed at $229,000. The buyers’ agent walked into the house and whispered to me “My clients are offering $210,000, but they’ll go up to $215,000”. I didn’t know what to make of this because, as a lawyer, I would never reveal my client’s position so I whispered back “Thanks for letting me know”. I told the sellers what the other agent had said and suggested that the buyers would probably go up to $220,000 if their agent said they’d go up to $215,000. The sellers never went below $220,000 and, not surprisingly, the buyers eventually accepted the sellers’ counteroffer.

Tip: Listen more than you talk. You won’t learn anything while you talk, but there’s a lot you can learn when you listen (and watch).

Number 2: Another early negotiation didn’t quite work out in my client’s favour, but it was a good educational experience. He was a builder looking to buy a bungalow at Avenue and Lawrence. We looked at a number of homes until he finally found one he liked. It was on a 40 foot lot and was priced at $229,000. (You can tell by this low list price that this happened many, many years ago.) He wanted to start with a low offer so his first offer was for $205,000. We started negotiating at about 7 pm and by 11:30 pm, after a series of incremental increases, he was all the way up to $223,000. The seller had her pen in her hand, hovering over the signature line, ready to accept this price when her agent’s pager went off. (A pager? Yes, a pager. Another indicator of just how long ago this happened.) The agent immediately reached over and grabbed his client’s hand to stop her from accepting the offer. About 15 minutes later, another agent showed up with another offer. My client increased his offer to $226,000, but he was too late. The other offer was for $229,000 so the seller accepted that offer.

Tip: Can you tell which negotiating style my client was using? There are several lessons to be learned from his experience, but the two most important ones are these: First, don’t use a time consuming strategy when you don’t have time. Another offer could appear at any moment. And second, when you see a property you like, don’t risk losing it for a small amount of money. Remember, pigs get fat and hogs get slaughtered.

Number 3: This is one of my favorites. My clients wanted to buy a home that was for sale by the owners (called FSBO’s and pronounced fizzbows by those of us in the biz). After a few rounds of negotiations, the seller husband turned to the wife and said “All we have to do is sign here, Honey, and we’ve sold the house!” to which she replied “What are you talking about? I’m not selling the house until we buy another place and I know where we’re moving”. Talk about a show stopper! We shook hands and the husband seller said to me “Let’s keep in touch”. He called me every month or two to let me know that they hadn’t found a new home and to ask if my clients were still interested in their home. My clients WERE still interested, but they continued looking at other homes. Every now and then they’d ask me if they should offer the original sellers more money to sweeten the deal. My reply was always the same – Mrs. Seller wasn’t moving for all the money in the world. After about 2 years, Mr. Seller called with good news – they had found a place. My clients made an offer with the same price from two years earlier and the sellers accepted it even though prices had increased by about 10% per year. I knew that money wasn’t the main issue for these sellers and figured they’d accept the original price to avoid the hassle of having to put their home on the market. They were most concerned with convenience. My clients were shocked and thrilled at the same time. They still love their home.

Tip: Know who you’re dealing with and figure out their motivation. Stay patient.

Number 4: My clients’ home was on a fairly busy street. It was listed at $399,000. The market wasn’t as hot as it is now. There were a lot of showings, but no offers. After a couple weeks we reduced the price to $389,000. The next day we received an offer from a buyer who had seen the home when it was first listed. The offer price was $392,000. My clients kept their poker faces on and decided to accept $392,000 without taking the risk of making a counteroffer and having the buyer walk.

Tip: Always do your homework to make sure you have up to date information. When you get an acceptable offer, don’t play games. Remember, pigs get fat and hogs get slaughtered (a recurring theme).

Number 5: My clients owned an amazing semi in a prime location. On offer night, they received 5 offers. The two best offers had the same price and were identical in all other material respects. My clients gave these two buyers a chance to improve their offers. They both increased their prices by $10,000. Still identical. My clients gave them another chance to improve their offers. They both increased their prices by $5,000. In round three, one buyer increased by $1,000 and the other increased by $2,000. My clients decided to accept the lower offer. When I asked them why, they said it was because they liked those buyers and their agent better.

Tip: It pays to be nice, to negotiate on good terms and to treat the other side with respect. This type of behavior may help you get the deal. Don’t let the negotiations become emotionally charged and don’t insult your counterpart.

Number 6: This will be an easy negotiating style for you to recognize. The buyers and sellers negotiated to a standoff with the buyers eventually saying “Our final price is $650,000”. The sellers made a counteroffer anyway. Their final price was $650,001. Yes, you’re reading that correctly and no, that’s not a typo. By making this counteroffer for exactly one (1) additional dollar, the sellers were taking the risk that the buyers would walk or get angry and make their own counteroffer for 50 cents less. Luckily, the buyers laughed and accepted the counteroffer, saying “If they need to have the last word so badly, let them. For $1 it’s not worth talking about”. Good for them for keeping level heads.

Tip: Don’t take stupid risks for little reward. Keep your emotions out of the negotiations.

There are plenty more stories from where these came from. Although every negotiation is a unique experience, the lessons to be learned stand the test of time. I hope you’re able to use them to your advantage to negotiate the best deal possible for yourself!

And if you happen to know anyone who can use the kind of real estate help that involves honest answers, straightforward advice, no pressure, expert negotiating skills and being treated like family, 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.