If you don’t negotiate regularly, the thought of haggling with an experienced negotiator can be terrifying. When under such pressure, many people strike back angrily, however, if you’re able to recognize the negotiation tactics homebuyers use to lower price beforehand, you can take steps to protect your interests so that you come out ahead.
What you’ll learn:
If you’ve invested hours into building rapport and have worked earnestly to reach a win-win deal, it can be frustrating when homebuyers unexpectedly ask for more. It can be tempting to give in; however, sellers must look to uncover if the homebuyer’s request is legitimate or a full-on bluff.
1. Homebuyers ask why you’re selling
a. Homebuyer says: What’s got you thinking about selling/When do you need to sell by?
b. Homebuyer is really saying: They’re inquiring about your situation to gauge how motivated you are to sell. The more motivated you are, the more leverage a homebuyer knows he has regarding the likelihood you will accept a deal at the bottom of your bargaining range.
c. Suitable seller response: I’ve been considering selling for quite some time and I’m just exploring my options. I’m not in a rush.
i. Even if your situation demands quick action, legitimate homebuyers like Good Vibes Homebuyers have proven processes that provide quality, rapid results on any timeline, so homebuyers do not need to know why you’re selling.
2. Homebuyers ask about home repairs
a. Homebuyer says: What upgrades have you made/What repairs do you think are needed?
b. Homebuyer is really saying: They are estimating the cost of repairs that will be necessary to make your home like other recently renovated, sold houses in your neighborhood.
c. Suitable seller response: I’m not familiar with home rehab costs and I don’t want to say something needs repairs when it doesn’t. So that you can provide me with your best offers that won’t change at the last minute, how about we schedule a time for you to visit?
i. This negotiation tactic homebuyers use to lower price is unavoidable as all homebuyers include repair costs in seller offers. This means you don’t personally have to come up with cash for any repairs, but it does affect how much cash you receive at closing. The goal of a home inspection is to produce an accurate repair estimate and not all homebuyers are created equal when estimating repairs. To ensure they don’t either over- or underestimate repairs, you should expect them to arrive with a licensed contractor or to have testimonials on their website which demonstrate they’ve successfully completed deals before.
3. Homebuyers ask your price
a. Homebuyer says: How much do you think your house is worth/What do you think a fair price would be?
b. Homebuyer is really saying: They are trying to establish the ceiling for negotiations in which to negotiate down from.
c. Suitable seller response: I haven’t kept up with prices in my neighborhood so I’m not sure what would be fair. Do you think you can help me determine a price?
i. When faced with this negotiation tactic homebuyers use to lower price your goal is to get them to offer their price first. This maintains your leverage and allows you to uncover their negotiation floor so that you, especially if unfamiliar with your neighborhood’s values, don’t provide a price that is under market.
When asking for your price, homebuyers are trying to establish the ceiling for negotiations in which to negotiate you down from.
4. Homebuyers set a low-price anchor, often as a range
a. Homebuyer says: Based off recently sold comps, your property should be worth about $150,000 to $160,000.
b. Homebuyer is really saying: They are establishing their target purchase price and it’s usually at the bottom of their bargaining range.
c. Suitable seller response: Ask how they come up with their number/range.
i. When faced with this negotiation tactic homebuyers use to lower price your goal is to uncover whether it’s a real number or a ploy. As they explain, focus solely on what they’re saying so that you begin to build rapport and aren’t overwhelmed by the voices in your head.
5. Homebuyers react with shock to your price
a. Homebuyer says: Whoa! Your price is way too high. We just can’t do that.
b. Homebuyer is really saying: Rather than genuine surprise it could be an orchestrated reaction that is designed to trap you into negotiating down. Alternatively, their valuation could be accurate causing a genuine reaction. If so, expect legitimate homebuyers to provide you with justification and documentation showing you why their valuation is accurate.
c. Suitable seller response: Can you help me understand why it seems so high?
i. This negotiation tactic homebuyers use to lower price is designed to get you ready to negotiate yourself down. Your goal should be to hold your ground. Ask what they’re comparing your home to and focus on creating solutions by having value-adds ready to bargain. The bottom line is, be prepared to trade, not cave.
Good Vibes Homebuyers are exactly as our name reveals, we’re homebuyers and we embrace Good Vibes only. Although we practice certain negotiation strategies, not one of them is unethical, immoral, or designed to lead sellers astray. Our reputation precedes us and if it became damaged, we would be ushered overnight out of the homebuyer business. We’d like to stay in it.
1. Where can I find more tips on negotiating with homebuyers?
a. The book “Never Split the Difference” by Chris Voss is a great resource that many homebuyers use to negotiate. Read a summary of its negotiation tactics so that you can level the playing field.
2. Getting my price is most important, how can I achieve this?
a. Be open to paying for things like closing costs, moving costs (yes GVH typically pays for these), or to trading appliances like refrigerators and your washer and dryer.
3. What’s another negotiation tactic I can use against homebuyers?
a. Be mindful of your body language. An estimated 70% of interpersonal communication is conveyed via nonverbal behavior. This means “how you are” is more important than what you say.
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