The Power of Negotiation: Buyers and Sellers Need Different Strategies

Most people assume negotiation is one skill you use in every real estate deal. After 35 years, including living through the 2007 crash with clients on both sides of the table, I can tell you it is two different skills. A buyer and a seller are trying to do opposite things with the same property, and the strategy that wins for one will lose for the other.

What a buyer is really negotiating for

A buyer's leverage is timing and information. The market moves in your favor the day you are willing to walk away, and it moves against you the moment you fall in love with a house before you have agreed on the terms. The strongest buyers in the foothills are the ones who know what their well test, septic inspection, and fire-zone research are going to say before they write an offer, because that knowledge becomes their negotiating position.

• Separate the house from the deal: love the property, negotiate the contract.
• Use inspections as information, not anxiety. Every report is a card in your hand.
• Keep your financing contingency real. A loan that might fall apart is not leverage, it is risk.
• Let the seller's motivation set your pace. A house that has sat 90 days plays differently than one priced with three offers.

What a seller is really negotiating for

A seller's leverage is price discovery and patience. The first offer is not automatically the best offer, the highest price is not automatically the safest deal, and accepting a lowball on day three because you are nervous is exactly how equity gets left on the table. I tell every seller the same thing: we are not negotiating for the number, we are negotiating for the net result, after credits, repairs, contingencies, and the timeline that actually works for your life.

• Price from market evidence, not from what you need the house to be worth.
• Let multiple offers compete in writing, and hold the line on terms that erode your net.
• Disclose early and fully. A clean disclosure is the strongest negotiating position a seller has, because it keeps the deal from collapsing later.
• Remember that every week a wrong price sits on the market costs more than a small price drop on day one.

Why 2007 changed how I negotiate

The crash taught me that a deal closing is not the same as a good deal. I watched clients who were protected by honest pricing and clean paperwork get through the downturn, and clients who were pushed into bad terms for the sake of a signature pay for it for years. Since then I have kept one rule for every transaction: never let a client walk into a deal without an advocate who has their back.

"A good agent doesn't cost you money. He makes you more than he charges. The negotiation is where that shows up."

Whether you are buying your first foothill acreage or selling the family home after 40 years, the strategy has to fit your side of the table. That is the difference between hiring someone who knows how to negotiate and hiring someone who knows which negotiation you are in.

If you want to talk through your specific situation, call us at (530) 409-8351. Take care, Doug.