Compromise is the art of the deal
More often than not you're going to find something in the buyer's purchase offer that you don't agree with. Maybe the offered price is too low, or the conditions and inclusions are too demanding.
You are now presented with three options:
- Acceptance
An accepted offer means you've agreed to all the terms and conditions exactly as set forth in the offer to purchase. Congratulations! You are on your way to closing the deal! - Rejection
You reject an offer when you do not agree with the terms (such as price) and conditions set forth in the offer to purchase. - Counter offer
Prepare a counter offer when you agree with some of the terms and conditions in the buyer's offer, but not all of them. The counter offer may change the price or closing date, or it may add or delete conditions.
If you choose to make a counter offer, the buyer can accept the new terms and conditions, reject them outright (and look for another house), or they can decide to work with you to establish mutually agreeable terms. Unless your counter offer was extremely unreasonable, the buyer will likely choose the latter option. It's time to negotiate!
Counter offers: tips to help you negotiate and arrive at a suitable compromise
- Choose your battles wisely
You may fancy yourself the Donald Trump of residential real estate, but do you really want to jeopardize the whole sale haggling over the inclusion of comparatively insignificant items like your old drapery or a rug? Save your stubbornness for the issues that matter most. - Keep it real
Sure, a big profit would be nice, but if you insist on a price too far off the fair market value, you can expect the buyer to walk away. - Be a lover, not a fighter
There is no doubt that the give and take of negotiation can frazzle the nerves. But becoming combative when you hear something you don't like won't get you any closer to closing the deal. Quite to the contrary. Remember the saying "you catch more flies with honey than with vinegar"?
A few tips: Be polite and collaborative in any dealings with the buyer or his real estate agent. Let the buyer know you hear and understand their issues. Be respectful when disagreeing with or rejecting terms. Try to communicate your own wishes clearly. Be patient and helpful when misunderstandings do crop up. - Know when to hold 'em (and when to fold 'em)
Prepare for negotiations ahead of time by knowing what terms of the deal you can compromise on, and by opposition which terms are deal-breakers. Ensure your priorities are communicated clearly, and don't be tempted to exaggerate your position. This is no time for bluffing, lest your bluff be called. And remember, negotiation is all about give and take, so expect to make some concessions. By establishing your position in advance you'll be able to handle a little of the give painlessly and with certainty. - Know when to walk away
It's unlikely that you and the buyer will be unable to come to mutually acceptable terms, but you have to prepare yourself for that eventuality. If it eventually becomes clear that the buyer will never budge on terms you deem vital (no matter how long talks extend), it is time move on.
Coutesy of: http://www.royallepage.ca/en/realestateguide/selling/closing/negotiating.aspx
