PMC Mortgage Lender's Blog

“Negotiations are about more than price” offers 30-year veteran real estate broker, author and columnist, Dian Hymer. “Generally, the fewer the contingencies or the cleaner the contract, the more attractive it will be to the seller.”

Hymer says everything is up for grabs when a buyer and seller enter into negotiations. “Closing and possession dates can become issues at the bargaining table. What's included and excluded, time periods to satisfy contingencies, and virtually everything in the contract is negotiable.”

You should understand what motivates the other party. A seller moving to a retirement home might go for the highest-priced offer in a multiple-offer situation, even though it might not be ideal in other regards. If they are liquidating their asset, every penny will count. They might have plenty of time to negotiate their best price.

Your negotiation strategy will “differ depending on how well the home is priced and who's on the other side.”

Hymer wants buyers to enter negotiations with a clear understanding about the terms they feel are not negotiable, yet be flexible on points that would be valuable to a seller.

For instance, know your upper price limit, but if repairs to a house are required consider buying “as is” to avoid delays while repairs are made. A lower sales price may be your reward.

“Don't waste your time with sellers who are firm at a price that is considerably over market value,” says Hymer. “Some sellers eventually get tired of having their home listed and reduce the price to market value.”

Hymer says that from her experience, “many buyers don't want to negotiate. They want their first offer to be their best offer.” However, this strategy is rarely successful. Buyers should plan for some negotiation, but should not put all of their cards on the table at once.

Sellers should be aware that if buyers feel they're not getting anywhere or are being treated unfairly they will walk away from negotiations, especially in today’s market.

A smart strategy is to defend your position while being honest and fair with the other party. Many buyers feel that cash is king. But if the home is a good value and suits your long-term needs, you might increase your offer price and include a mortgage. This way, you conserve cash for other uses.

Hymer’s best strategy for negotiating to close a deal is to be “preapproved for the mortgage you'll need and provide verification of cash for the down payment and closing costs.”