Jim Walberg, staff writer for The Bay Area Team
As a Buyer who is wanting to purchase a home in the crazy world of Bay Area real estate it is critical to hire a Realtor who is a proven and effective negotiator. Why does this matter? The amount of homes for a Bay Area buyer to select from is at historic lows. And, the buyer pool for Bay Area homes is at an historic high, equaling a “Sellers Market”. Having a highly skilled negotiator by your side is even more critical in creating a successful outcome for any home buyer.
As a Bay Area real estate professional, we start out with the basics and then dig deeper from there when it comes to negotiating. Our overarching objective in representing a home buyer is to negotiate the best price and terms for the home they want to purchase, given existing market conditions and their unique situations. In a “Sellers Market” saying this is tricky is an understatement.
Most Bay Area home buyers are facing multiple offers on every home they submit a Purchase Agreement package for. So, the Realtors who are approaching the negotiating experience as a battle have already lost. The first step of effective negotiating is an act of discovery. The goal is to uncover as much information as possible regarding what is important to the seller. For example
- Would the seller like to continue on the legacy of their home with a young family, because they loved raising their kids in the home and the neighborhood.
- Does the seller need a rentback of 30 to 60 days.
- Would the seller prefer to sell all or most of their furnishings to the buyer.
- Are there specific items in the home that the seller would like to take with them – grandma’s dining room chandelier.
- Are there repairs that the seller has discovered which need to be addressed, and they have stated they will not be completing any of them.
These are just some of the “discovery items” that would be very important for a home buyer to know about a specific property. Now, it doesn’t mean that the buyer has to agree with all of what is discovered. However, it is critical for the seller to understand that our buyer has empathy for their situation, and it immediately conveys to them that the buyer is listening. Our job is to clear away as many of the barriers to the “price and terms” conversation as possible.
The more we are able to discover about the needs of the seller, the more effective we can help design a cover letter for our buyer’s Purchase Agreement package. This buyer’s cover letter is well crafted and is often the prevailing reason why our client’s offer is accepted. And, a stumbling block for many Realtors is they think the negotiating process is all about them. It is not. In a “Seller’s Market” is all about what is most important to the seller, and how can the buyer position their Purchase Agreement in a way that is most appealing to the seller.
Chris Voss is the author of “Never Split The Difference – Negotiating As If Your Life Depends On It”. One of the key concepts that I took from reading his book is, “The more a person feels understood, the more likely they will have the urge to arrive at an agreement with you.” So, the most important steps in arriving at an agreement with a home seller is the deep discovery process with them as to what is most important before a Purchase Agreement is even constructed.
These are just a few of the key concepts we use when engaging in an effective negotiations which finally bring both parties to “Yes” – an accepted Purchase Agreement.
Until next time… Jim Walberg