Negotiations – Buyer Strategies

Despite double-digit appreciation and a real estate market that is now favoring sellers, many home buyers are still hesitant to buy real estate. They have been conditioned through years of spaced repetition to:

1. Sit on the Fence
2. Focus heavily on price

In order to maximize your success during contract negotiations, agents must be prepared to deal with these bad habits that are contrary to a buyer’s best interests.  All of the following approaches should be considered:

1. Identify why the buyer is so focused on a specific price. The buyer may only be fixated on that price as a result of an arbitrary approach.
2. Minimize the price differential by breaking the additional cost into a much smaller monthly cost for the mortgage. If there is no mortgage, ask how long the buyer plans on owning the home, and divide the extra cost by the number of months they expect to own the home. In either case, the amount will seem minute, perhaps no more than the cost of a cup of coffee at Starbucks each day.
3. Document the year-over-year change in average prices of similar properties that have sold. Then point out the risk of similar appreciation during the coming year, and how it will impact the future price the buyer will have to pay if they wait.
4. Be sure the buyer knows how the improving market conditions could limit the selection of homes they will have to choose from.
5. If the buyer needs to sell their existing home before they purchase another home, let them know that they may be able to make up the loss by getting a better deal on the home they are purchasing.
6. Retain control of the situation by emphasizing the emotional benefits of purchasing the property.
7. Make a written list of the benefits the buyer will enjoy if they move forward with the purchase.
8. Discuss the impact current economic events may have on increasing the cost of the home.
9. If the buyer is financing a home, point out the additional costs they may have when interest rates increase.
10. Revisit the emotional benefits of purchasing a home.
11. Ask the buyers if they would be willing to “meet in the middle”.
12. Point out the consequences to the buyer if they don’t move forward with a purchase.
13. Use the Ben Franklin Close by drawing a line down the middle of a blank piece of paper, labeling one side “Pros” and the other “Cons”. Help the buyer with the list of benefits (Pros) on the left side of the paper. Then, ask the buyer to list the reasons why to wait (Cons). Do not help them with the second list.

Keep in mind, the more reasons and logic you use, the more likely you are to wear down the buyers resistance to moving ahead with a purchase. In any case, the dozens of reasons will act as spaced- repetition to break the bad habits the buyer has developed.