How to successfully negotiate as a home buyer

September 22nd, 2009

I can’t believe how many of today’s home Buyers and home Sellers believe that “take it or leave it negotiations” are productive.  I’ve negotiated over 200 transactions of my own as well as another 100 for other agents as a real estate office manager in the city of Piedmont.  A simple rule that I recommend following is to never be the one to end the conversation.  For example, I’m representing a home buyer who has made an offer on an Oakland Hills home.  The property is listed for $825,000 and has been on the market 35 days with no price reductions.  My Buyer writes an offer at $780,000.  The Seller counters at $815,000.  My Buyer responds back at $790,000.  The Seller then comes back at $810,000.  At that point my Buyer essentially slams their hand on the table saying “$790,000 is my final price.”

In this market a Seller, by negotiating is making sure that they are squeezing as much value out of their home sale as possible.  The Buyers, while reading in the papers that prices are falling in the Oakland Hills, Berkeley Hills and Piedmont market places, are very concerned about purchasing in a declining market and of course are always looking to get the most house for the least money.  So the art of negotiating in real estate isn’t just knowing what TO do, it is often knowing what NOT to do.
Even if my Buyers do the hand slap on the table, I find that a “polite NO” is generally much more effective.

Try this on for size:
Dear Mr and Ms. Seller,
Thank you for taking the time to respond to my clients offer.  This is a challenging market and while we understand your position it is important to respect that both sides have their own respective financial realities.  These Buyers unfortunately are simply not in a financial position to meet your number.  As a good faith gesture and as a sign of their enthusiasm to make your house their future home, they are increasing their offer by $1,000.  We realize that this is a far cry from what you are asking but we are hoping that this good faith gesture will ensure that if after another few weeks of marketing your home for sale and if another buyer doesn’t materialize, that there is nothing such as hard feelings that would prevent you from re engaging us.  I truly think these are the right buyers for your wonderful home.

Sincerely,
Brian Santilena
Pacific Union Real Estate
Oakland, Berkeley and Piedmont

Brian Santilena has been representing home buyers and home sellers in the Oakland Hills, Berkeley Hills and Piedmont California marketplace since 1998.  He is a Realtor, CRS Certified Residential Specialist, liscened contractor and Sr. Sales Associate with Pacific Union Real Estate.  He is highly knowledgeable in the Oakland Hills premier neighborhoods such as Haddon Hill, Rockridge, Montclair, Glenview, Trestle Glen, Crocker Highlands, Oakmore, Laurel District and Redwood Heights.  Berkeley Hills neighborhoods such as Northbrea, Westbrea, North Berkeley Hills, Berkeley Flats, Thousand Oaks, South Berkeley, Gourmet Ghetto, Elmwood, Uplands, Claremont, LeConte.  City of Piedmont, City of Kensington, City of Albany.  Please feel free to CONTACT BRIAN if you have any real estate needs in Oakland, Berkeley or Piedmont CA

 

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