Negotiating Real Estate - Go Slow
Why would you from time to time go slowly when negotiating real estate deals? It's all about the power or time investment. Let me clarify with a story.
One of my less-pleasing experiences selling real estate was when I sold a property for a very good guy, and he was a lawyer. I was still new to real estate, and this lawyer knew all the angles. Without getting into all the dirty tricks he used, I'll just say that the buyer had everyone involved angry, frustrated and worn down.
As a final blow, he arbitrarily decided that he wanted the price lowered by another $5,000. Now that's hardball negotiating. The seller was almost ready to throw away the whole deal, but he had been trying to sell the home for two years, and we had been working with this buyer for months. None of the brokers or agents involved desired to see all their effort turn out to be nothing.
There were three agents below two brokers involved in the sale. We all settled that taking legal action against the buyer wasn't worth it. Instead, we gave in. The seller had enough of the buyer’s deceits, so each of the other five parties to the sale (2 brokers, 3 agents) settled to each let a $1,000 of the commission go, just to close the deal.
This is an extreme example of using "time investment" to your advantage. After putting so much time, none of us wanted to lose the whole thing. The lawyer knew that and used it. In this instance, there was nothing in the contract that permits him to negotiate the price again, making it wrong in my mind. Still, it turns out effective.
Negotiating Real Estate Deals - Ethically
In other scenarios, it is just decent negotiating. If you want to get the best price on a car, do you think you'll get it after spending two minutes with a salesman? Let him invest two hours showing you cars, and he'll be begging the manager to let the car go for your low offer. The same is true with real estate negotiation.
Remind the seller about time, to let him remember the time he has already invested. To do this politely, say something like "Look, neither of us wants to lose the time we've spent on this and start all over, so why don't I..." Then offer some small concession.
He is slightly cautioned that he could lose his entire investment with nothing to show for it. The words "start all over" may even scare him. You set the prospect, and then you provide a way out. This is not offensive as well when done right. You say "Neither of us..." to let them know you're both in the same situation, and it's not just you threatening them.
This is, of course just one technique of many for negotiating real estate deals. Take the time to learn several, at least.