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Real Estate Negotiating - 4 Steps to Success

"Let us never negotiate out of fear. But let us never fear
to negotiate." (American 35th US President (1961-63), 1917-
1963) Even the most famous recognize the need for the art
of negotiation. To be able to make a good real estate
deal, you must develop the art of good negotiation or find
someone who can do the negotiating for you.

The real secret of being a successful negotiator is to
help both parties obtain their goals. To do this you must
present your case in a businesslike way and close the
transaction. This can be accomplished in 4 steps.

1. The first step in any negotiation is to know your
goal. If you have someone else negotiating on your behalf,
make sure they understand what your ultimate goal is. If
your goal is to get the property at the lowest price, make
sure you understand exactly what is involved to achieve
that success.

Don't be afraid to reevaluate your goals. If during the
negotiation process new details come to light that may
allow you to obtain your goal by a different means, allow
yourself the ability to explore the new details, don't get
stuck in your negotiations by being to rigid.

Once you are comfortable with your goals, and understand
how far you are willing to go to obtain the property, you
are ready to move to the next step. However, even when you
are comfortable with your goals, you must be flexible.
Remember there are two parties involved and the other party
may present an option that could get you to your goal
faster. In real estate there are several ways to achieve
the same desire.

2. There are two types of negotiations: Blind and Open.

In a blind negotiation you don't know anything about the
other party. You do all the negotiation via an agent or
third party and don't meet the sellers. Keep in mind you
may be dealing only with the other parties agent and they
have their clients interest at heart.

In this type of negotiation your homework is very
important. Know the property, know the market, and know
values so you are able to negotiate the deal that is best
for you, or be able to walk away. Blind negotiations can
be handled, but they are a bit more time consuming.

Open negotiations are a bit easier, but require you do be
good at your homework. In an open negotiation you may be
working with the for sale by owner. In this way you have
access to a bit more information.

If during your negotiations you begin having problems on a
particular point, such as price, do your homework. Find
out why the other party is buying or selling. Knowing the
other parties motivation can give you the upper hand. For
instance, if you know the seller or buyer needs to move
quickly, you will then have a bit more leverage to work

What homework will help you in your negotiations?

a. Why does the other person want to buy or sell?
b. Who is the other person trying to impress?
c. Know the timing aspect of the transaction.
d. Verify the facts.

3. In the art of negotiating, it is critical to get
started on the right foot. Do not try to antagonize the
other parties to the transaction. Be very neutral about
the entire deal.

a. Don't praise or criticize the property.
b. Don't try too hard to buy or sell the property.
c. Don't criticize the other parties to the
transaction, including any agents involved.
d. Explain motivation without disclosing too much
e. Meet all deadlines or better yet be ahead of the
f. Do not lie, rather say nothing.

4. Communication is the key to negotiation. However, too
much talking can kill your negotiations. Make your offers
in a written contract and let the other party do the same.
Remember "lose lips sink ships."

When you begin talking to the other party you will give
away too much of your motivation. You may think you can
better obtain information from the other party about their
motivation, but keep in mind it works both ways.

Now that you've learned the 4 basic steps to negotiating
you are ready to go out and get the property you desire.
You must also keep in mind that not all negotiations turn
into real estate deals. Don't be afraid to walk away from
a deal that is not to your liking. Otherwise you may well
find yourself making very bad deals and wasting your
negotiation skills. Good luck and good negotiating.

About the Author: Cheryl Shank, provides more Real Estate info at and also has written
the Ultimate for Sale By Owner Guide available at

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