win-win negotiating

** Win-Win Negotiating **

"That's my final offer. Tell them they can take it or leave it." You've just negotiated yourself into a deadlock. The best way to handle a deadlock is to avoid getting into one. Easier said than done? Try these negotiating basics to give you the win-win techniques that get you to the closing table.

1. The first rule is the Golden Rule.
All parties need to feel that they have gained something, so treating them like you want to be treated allows both of you to "win". Always be nice and never use a threatening tone. A friendly but assured reply gets the message across, even if it's unpleasant. Treat the potential buyer or seller as an ally, not an opponent. Negative comments will kill a deal! They may have waited a long time to reach the point of negotiating, so show them appreciation! If you have been trained to respect the "tough negotiator", you may be making a mistake. Someone who "digs in his heels" and won't budge is not negotiating. A true tough negotiator is someone who doesn't uit and finally succeeds in getting an agreement. Avoid giving a "Take it or leave it" ultimatum. It's better to give a final offer without a hint of it being final. If they reject it, simply resubmit it again, but apologize that you can't do any better. That avoids threatening them. With emotional issues, your message is less important than how it's delivered. Sometimes permitting the seller or buyer to feel they are in cntrol, keeps you in control. Should they ask you to offer more or less than you want, answer with, "I will give it serious thought". When they ask, "Have you had enough time to think?" or, "What is your answer?: say, "I'm still thinking about how I can make it work". When they call you the next day say, "I think I can make it work for this amount". Responding in this way keeps things moving in your direction. Answering with a "This is it" stops the negotiating and any hope the other party has of making the deal.

On the other hand you should also realize that the other party and their agent may be poor negotiators. If this is true, it should be easy to move them to your position. Many times sellers or buyers lose sight of the objective to sell or buy the home. Instead they begin to focus on how good a deal the other one is getting. When you begin saying, "I won't move another inch, it's the principal of the thing", you're in trouble. It's one thing not to give in because the facts are in your favor, it's another not to bedge because things are not working out the way you want. We suggest you keep your eye on the prize.

2. Ask questions to determine where the negotiations are stuck.
Ask simple questions like, "What part of the offer is making you uncomfortable", or "Is it the price or the closing date that doesn't work for you?" Objective, quantifiable issues are the easiest to deal with. If you can, work from the easiest to the hardest. If the difference is a reasonable sum, try "splitting the difference". This works best towards the end of negotiations, save it for then! Emotional issues are the problem when someone is obviously upset. They may even yell, cry, or be silent, and use words like "insulted" or "mad". They may have always wanted a big yard because of a memory from their past, or are being forced to move through circumstances you can't control! The best thing to do is offer your sympathy and understanding. Emotional issues take longer to resolve, and if you're not seen as an ally, your negotiations will stall.

3. Keep your information private.
The more the other party or his agent knows about you or your property, the more power they have negotiating. For example, if they know what you are willing to take or that you are having financial problems, they will only offer that much, choosing to use time as a tactic and "wait you out". It puts you in a weak position and ruins your chance for a higher offer from them. Use hinting to keep things moving in your direction without giving too much information. For example, when presented with a low offer the seller may respond, "That's a nice offer, but I wonder if the buyer would give more money if I threw in the washer/dryer/refrigerator." Or the buyer might ask, "What about this. Would your be willing to come down if we didn't ask for the appliances?" No commitment has been made, but you may receive a little more information about the flexibility of the seller or buyer. Both parties need to be well informed about the comparable sales in the neighborhood. You can be sure that the other party has this information and will come to the negotiating table with it in hand! If you are unaware of these comparables you are negotiating without credibility and you will lose.

4. Use time as your ally.
Sellers: The balancing act between responding too quickly or too slowly is a fine art. In general, it's best to keep things moving or the buyer will feel unappreciated and move on. Buyers:If an ad says "Seller relocating", or you find out he has bought another home, he is under a time constraint. Now is the time to try a low offer. Keep the door open to raising the offer, or he may be too insulted to reply. Final offers are not always final. Allow some time to pass and sometimes feelings will change. You could wait a few hours to reply or even days. If things are stagnant, sometimes people need some space to think.

5. Put it in writing.
Verbal offers are commonly used by low-balling buyers. If they are afraid of buying, don't have the money, or are simply trying to "steal" a property, they will tell their agent to give you a verbal offer. They may do this to buy more time as they wrestle with their own indecision, because: a) They know it's too low and don't want to take the time to write it up. b) They are embarrassed to put it on paper. c) They are hinting and want to see your reaction. Never reply to or counter verbal offers. It weakens your position. The best response to a verbal offer is, "Put that offer in writing and I will respond".

6. Be prepared to renegotiate after the home inspection. A major repair like a bad furnace, leaking roof, termite infestation, mechanical, structural, or electrical problems, high radon readings, asbestos, failed septic system, poor well test, or a crumbling foundation needs to be negotiated with the attorneys involved. Smaller items can be dealt with between the parties, but cosmetics are not included in the items that need repair.

7. All parties feel at a disadvantage, so use this to your advantage.
Brokers know upon signing an offer to purchase many buyers expect the seller will not agree to the offered price. Buyers expect a counter offer. For sellers it is exactly the same, you never expect a full price offer. Moreover, it is the same for all other parties connected with the sale- the brokers, the bank, the lawyers. Noone expects all parties to get everything they want. If you recognize this from the beginning and use it in your negotiating strategy, you will fare better.

8. Deal falling apart? Let it!
It's not worth the aggravation and another deal is usually just around the corner. Put the house back on the market or find another home. Waiting around for the courts to help you rarely is in your best interests. It is costly and time consuming. As a seller, your home will be entangled in the legal proceedings, and should you find a new buyer you will be unable to close, because there will be a "cloud" on you title. We usually suggest you give the money back and find another buyer. Move on!

9. There's another offer coming in...
Creating an auction effect for your property is an effective but dangerous tactic. Do not tell a prospective buyer you have another offer before the offer is made. (You are never under an obligation to tell them there is another offer.) The buyer or buyer's broker may not want to get into a bidding war for 2 reasons: it may force them to pay more than they want, and in a hot market, they don't want to risk the time loss and huge disappointment of not getting the home. Don't lose a solid buyer to an offer that "might" be coming in. We have seen many offers promised that didn't materialize, and it puts the seller in the position of having to return to the buyer who backed out to tell them the offer never came in. They lose credibility and negotiation power in the buyer's eyes. When you are working with multiple offers, it works well to counter each with the same number. Give them a deadline to come back with their counter, and honor it. You'll often be surprised that the lowest initial offers can end up coming up the highest. Ask for the Best and Final offer when you are close, and continue working with the one that works best for you intil it is clear that they can go no further. Get the contract signed immediately. You should never let the buyer know what the other offers are. It gives them too much information. Remember: You are in control during a multiple offer. Don't be pressured into responding sooner than you want. If you are the buyer, don't be intimidated by other offers.

For more information:
Chris Phillips
5560 Kirkwood Hwy.
Wilmington, DE 19808 US
Email: cphillips@remax.net
302-442-4200
Fax: 302-442-4201