CONTRACT NEGOTIATIONS – “WIN-WIN” IS ALWAYS A WIN!

Negotiations are a crucial part of all real estate transactions.  We negotiate far more often in our everyday lives than we realize.  We are negotiating all the time, for example, the time we go to lunch with a friend, the date when a report will be submitted to the boss, the price  of an item at a flea market, who will go first in a game, etc.  All examples of daily decisions involving another person or persons, requiring compromise – requiring give and take.

In a real estate transaction, negotiations are not only about the price. Although price is the entry ticket to the rest of the transaction, there are other terms and conditions that must be negotiated, for example, the timing of the sale – when it will close, the amount of down payment, the condition of the home - “as is” or including repairs that the buyer has requested.

Ideally the goal is to have a “win-win” situation in real estate transactions. While there are some people that view contract negotiations as a “win-lose” outcome, the truth is everyone will benefit by striving for a “win-win”.  Compromise is an important part of getting to a result that will satisfy both sides.  It’s important to identify terms that need to be negotiated from terms that are true “deal breakers.” But there are really, very few conditions in a standard contract that are serious enough to kill a deal.  Sometimes emotions are responsible for turning what should be negotiable terms into non-negotiable terms. 

Often communicating voice-to-voice is more effective in getting to a “win-win” transaction, than emails and texts. Some issues need to be discussed to understand the underlying motives of the parties. Knowing everyone’s key terms up front is important, because while something could be a non-issue on one side, it could be the very selling point that makes it a win for the other side.

Buyer and seller have to express and make known to their agent, what’s really important to them.  Conversely, buyer and seller have to avoid looking for a “win-lose,” when the issue is not important to them. From the beginning of the transaction, it has to be about the issues rather than the emotion.

One of the keys in negotiating is to recognize that each party will have his/her own perception coming into the negotiations, and that is his/her reality. It’s important to stay level-headed during negotiations. Though it may be an emotional experience for both buyer and seller, it’s critical not to let negative emotions take over and become a factor. In the end,  “win-win” comes about when a solution is acceptable to all the parties, and there is a sense of trust and fairplay.