Let’s Talk Real Estate
As we all know, emotions play a big part in lifeâ ”and thatâ s also very true in real estate transactions. Itâ s not always only about the number of bedrooms and the price. A real estate transaction can involve feelings of joy, anger, love, hate, sadness, disgust, surprise, expectation, anticipation, just to name a few. As real estate brokers, our job is part business consultant and part psychologist.
When you want to sell your property, you call a real estate agent who meets with you and â takes a listing.â The agent asks the sellers to put their emotions about the value of the property on hold, and allow the agent to be objective in appraising their home and arriving at a realistic listing or selling price. Can you really put your emotions on hold? Probably not, but we ask you to try to look at the property with the fresh eyes and analysis the marketplace requires so we can all be objective. A competent agent will factor in the condition of the property, where it is located, what properties with similar features in the same area have sold for, and what other properties in the same area are listed for. Brokers will recommend that sellers spruce up their home and get it ready for market by making minor repairs, painting, and staging.
All of this work sometimes leaves the sellers emotionally drained, feeling they are no longer the King of their castle, and with it, a lot of emotions about selling their beautiful home arises. The house to be sold is not just bricks and mortar, but a sacred space where kids have grown up and many of lifeâ s milestones and memories have been created.
On the flip side, the agent will begin marketing and promoting the home and look for a potential buyer to connect with the property emotionallyâ ”someone who wants to make an offer. A buyerâ s response to finding their â Dream Homeâ is often an emotional one as well. If it is a â Sellersâ marketâ there may be multiple offers, which can make the purchase an emotional roller coaster from the Buyerâ s perspective. If itâ s a Buyersâ Market the buyer has a lot of choice, which can be a bit overwhelming as well. Part of the buying process is a give-and-take with see-saw, balancing what you want, what you need, what you can afford, and what the banks will approve. So, to complicate matters a real estate transaction involves some aspect of negotiation with price, termsâ ”or bothÂÂÂâ ”which involves emotion again.
Some buyers and sellers love negotiation and see it as a game of winner-take-all. Some people dread it. And some just deal with it as a means to the end. Things can begin to go bad when people let their emotions enter into negotiations, which happens often in real estate sales. The worst situation possible is when the buyer and seller start negotiating like a sparring partner. They completely lose track of the goal (to buy or sell the home) and start to see themselves in a Rocky movie, trying to win the title fight. They overlook large items that should be important to them, and focus on smaller things that have gotten under their skin. They focus on the fact that the seller wants to take the curtains, or the built-in coffee maker or wonâ t fix the leaky sink. All of these items are a fraction of a percent of the purchase, but they canâ t get beyond it. So, to help you through one aspect of the Emotional Roller Coaster here are eight tips to take the emotion out of negotiating.
1. The most important thing you can do as buyer or seller is negotiate with YOURSELF, not the other side. Figure out the most you are willing to pay for a home, including any repairs, replacing items the seller might want to take, and negotiate to that point. (And conversely, if youâ re a seller, negotiate with yourself on the least you are willing to accept in selling the property, knowing which items youâ re willing to sell, and which items are open for negotiation.) Ignore the perceived pettiness of the other side and donâ t let your feelings for the other sideâ s behavior and negotiating tactics blow your deal. Keep coming back to negotiating with yourself.
2. Remember, you only have to deal with the buyer or seller for 30-60 days, after that the home is yours (or you have moved on) and you never have to deal with them again.
3. Stay focused on the property and your deal with yourself, and tune out the white noise of the other side.
4. See their demands and counters as pawns which are a means to get to the end of the negotiations. Some are disposable and will actually be used strategically to get you what you want in the end.
5. Stay focused on the property and the total deal.
6. Use your realtor to run interference, this helps diffuse some of the emotion, and keep things moving forward.
7. Wait to respond. Sometimes people respond out of emotion and they think better of it later. If your contract gives you a deadline, donâ t feel that you need to respond prior to then; let all the possible outcomes come to light before you answer. Donâ t negotiate from emotion, but rather as a form of strategy.
8. Stay positive and visualize the outcome of a smooth closing.
Good Luck to all you buyers and sellers. Stay calm and use the tips to keep you sane. Until next week â ¦