A Case for Win-Win Negotiations

Buying and selling a home can be a stressful and emotional process. Buyers and sellers stand on opposing sides with very different ideas about the purchase amount, terms, and timelines that should control the contract. It’s an environment that’s ripe for contention, but a real estate transaction doesn’t have to be a battle ground. By recognizing common ground, empathizing with the opposing side, and employing a level head (and level-headed professionals), better outcomes can be achieved with less stress and fewer fallouts.

When it comes to negotiations, I always recommend approaching with the goal of a win-win solution whenever possible. If a win-win isn’t possible, I strive for a win-draw and do my best to avoid a win-lose. Hear me out as I share some why’s and how’s of negotiating for a win-win.

the end goal aligns, so start there

With few exceptions, buyers and sellers share a common goal. Both parties want ownership of the property to transfer from one owner to the next. Buyers and sellers simply have different ideas about how to get to the end goal and different thoughts on what constitutes a fair deal.

Buyers typically want to spend a fair amount on a home that the seller has maintained and repaired to their satisfaction. Sellers usually want to receive a fair amount without needing to do an extraordinary amount of repairs prior to closing. Both parties want to feel secure in the contract and valued, and everyone tends to be worried about the unknown or worried that someone will take advantage of them.

there are MANY points of negotiation

Throughout a real estate transaction, there are multiple points of negotiation, risks of delay and opportunities to speed up, and chances to build goodwill or tank the deal. It starts with the purchase price, but from there, an entire contract is built with variables, contingencies, and additional points of negotiation that stretch through closing. Parties that push hard to win in the face of the other’s loss, set themselves up for unnecessarily difficult negotiations down the road when confronted with the inspection contingency, Title contingency, appraisal issues, closing date adjustments, HOA reviews, etc.

Standing firmly is necessary, and sometimes a win-lose outcome is unavoidable. However, how you approach things can mean the difference between unpleasant conversations that help the sale move forward and the end of the transaction due to frustration.

understanding and empathy go a long way

Taking time to look at the issue from the other’s prospective. What are their motivations and goals? What are their fears? How can you help to bolster their goals while addressing their fears? What can you offer in return? How can you help them feel understood and secure?

Buyers, a seller’s future dreams may rest entirely on their ability to clear a certain net for their property and/or on the sale closing on time. Expenses and added time can eat into their net, increase their anxiety, and threaten their goals.

Sellers, a buyer may have limited experience in ownership and maintenance, and/or their future financial stability may rest entirely on carefully doing their best to ensure that they maintain a certain level of cash on hand after the sale and avoid any big repair expenses shortly after closing.

trust, but verify

That fear of the unknown that I mentioned earlier makes it really easy to lean into mistrust. I’m not saying that every buyer and seller should trust the people on the other side without cause or careful review. I am saying that it’s best to trust that the people and professionals involved have good intentions and then verify everything to your satisfaction.

Buyers, read the seller disclosure, property information, Title report, etc. Ask questions about anything unclear or concerning. Have the home inspected by a professional home inspector, take advantage of your right for additional inspections if needed. Gather estimates for needed work before requesting repairs, carefully consider requests, and ask for service and repair receipts. Remember, no seller has perfect knowledge of their home. Try to avoid the assumption that a seller attempted to hide things if the home inspector found something that wasn’t disclosed previously or if a past repair was poorly done. It’s possible, and sometimes pretty likely, that the seller had no knowledge of the issue.

Sellers, review the contract’s financing agreement, request a pre-approval and evidence of down payment funds, and have your agent ask the lender questions about terms and conditions that could effect the buyer’s ability to close on time. Use the steps of the financing addendum to followup with the lender, stay on top of the progress of the loan application, and request that the buyer waive their financing contingency when allowed. When a buyer presents estimates and asks for repairs, avoid the assumption that they trumped up the issues or amounts. Take the opportunity to get your own estimates before responding, and carefully consider your response in any negotiation period.

Everyone should be encouraged to verify information and do their due diligence, and all parties should be patient as the other works through these steps. Avoid assumptions of maleficence, protect yourself with information, and show patience and grace as others do the same.

it’s all in the approach and the validation

I’m competitive, I’m stubborn, and I like to win, but negotiating a real estate transaction isn’t about me, my ego, or my client’s ego. It’s about the best outcome for my client. A win that forces the other side to accept a painful loss just for the sake of the win can easily foster mistrust and kill any chance of negotiating down the line.

Contention isn’t always avoidable, but everything is made better when empathy is exercised and everyone feels valued. Over the years, I’ve witnessed the practice of negotiation for a win-win foster ideal outcomes for clients, and I’ve seen needless aggression rip real estate transactions apart. When it’s time to negotiate, take a deep breath and lead with a level head. I got you.