There are those that negotiate for the most reasonable deal possible and those that negotiate for the sake of negotiating. Sellers and buyers alike need to realize that the best deal possible is one where both get what they want in the deal.
This isn't necessarily an easy point to arrive at and is often a lesson in patience. In real estate, there's something called the X-factor — a potential home buyer may spend countless hours viewing properties until they finally find their preferred home, and then they may be tempted to immediately ask how much less they should offer than the listing price.
There isn't a tacit X-factor percentage that should automatically be subtracted from all listing prices. Homeowners are often just as eager to sell as buyers are to buy, and when that is the case the asking price is frequently set closely to comparable sales.
Still, the quest for a deal spurs many to start with a low-ball offer that's unrealistic and often insulting to the seller. If the seller is offended, negotiations can die before they've begun. Any serious buyer shouldn't carry a magic automatic deduction in their head; instead, look at comparable sales in the area and determine what the value is to you based on how well the property matches your family's needs.
How a purchase price is arrived at is a personal process. When accepting an offer, a seller considers how quickly they need to sell, whether they already have a replacement home, what is owed on the property, and other personal pressures.
On the other hand, two buyers can look at the same property and come up with very different personal values depending on location, appeal, amenities, the school system, and how well the home fits their needs. Aside from personal value, both parties must also consider how much a lender will lend based on the home's appraisal.
Price isn't the only negotiable part of a sale. Timelines, which items will stay or go with the home, and who pays for problems discovered on inspection are all commonly negotiated points. Negotiating is a give-and-take process of compromise, not a one‑side win.
To avoid a winner-take-all dynamic, buyers and sellers should prepare a list of top priorities before negotiations begin. As issues arise, priorities may need re-evaluation to decide what is truly a deal-breaker and what can be traded.
Many problems, such as minor fees and repairs, can be solved by meeting in the middle. Agreeing to split costs often saves time and money compared with protracted haggling. For example, a seller who risks an extra mortgage payment by delaying closing might find it cheaper to pay half the cost of a minor repair and close the deal sooner.
Sometimes there are legitimate deal breakers, and if so, it simply wasn't the right match for the parties involved. Before abandoning the negotiation, consider mulling over the troubling issue for a few days and revisit other agreed areas; progress on other points can increase willingness to compromise on a sticking point.
Negotiations also intersect with insurance and risk considerations for properties with specialty uses. For related coverage considerations, see Ski Resorts Insurance.
Keeping priorities clear, communicating respectfully, and being prepared to split certain costs will usually produce the best outcome for both buyer and seller. For more information about relevant coverage topics, review Ski Resorts Insurance.
If you need help interpreting contract terms or available options, consider taking the next step to talk to your agent before finalizing offers or counteroffers.
Frequently Asked Questions
How should a buyer decide on their initial offer?
Base the offer on comparable sales, the home's condition, and how well it meets your needs rather than applying a fixed percentage discount to the asking price.
What if my low offer offends the seller?
If the seller is offended, negotiations can stall; it's better to justify your offer with comps and condition notes and remain respectful to keep the conversation open.
When is splitting repair costs a good option?
Splitting repair costs is practical for minor, non-structural issues and can save both parties time and money versus delaying closing.
Are timelines negotiable in a home sale?
Yes, timelines for inspection, financing, and closing are commonly negotiated and can be as important as price to both buyers and sellers.
When should I walk away from a deal?
Consider walking away if a key priority is non-negotiable for the other side and compromise isn’t possible after reasonable attempts to resolve the issue.