Use Art of Negotiation To Triumph as Buyer
By ELLEN JAMES MARTIN
Some years ago, Roy Lewicki fell in love with a country-style Victorian house in Vermont near the university where he'd been offered a professorship. Years of practice in developing negotiating skills helped him complete the deal for the property.
"Good negotiation is not about one or the other side winning. It's about both sides winning," says Lewicki, the author of several books on negotiation, including a textbook that's used widely in business school classes.
This "win-win" principle of negotiation was one of the techniques he used in purchasing the Victorian house from the seller, a single woman in her 70s.
In every encounter Lewicki had with the owner, he highlighted the many positives he admired about her place. He sent her complimentary "thank you" notes after each visit. When ready to craft a bid, he made sure his offer reflected fair market value. He knew a lowball bid could have insulted her and caused her to cut off negotiations.
Not only did the woman accept Lewicki's first bid, she responded to his good will by generously offering to give the professor and his family a number of valuable pieces of furniture, including antiques.
Lewicki's advice to homebuyers: "Never pass up the opportunity to be really nice to the sellers. People have a strong emotional investment in their homes, even when they've done a bad job of upkeep."
Here are several other tips related to homebuyer negotiation strategies:
Pick a real estate agent who knows the turf and is a credible negotiator.
Whom you choose to represent you in the purchase of a home can be influential in determining whether your deal turns out well, says Leo Berard, charter president of the National Association of Exclusive Buyer Agents (www.naeba.org).
Lewicki suggests that prospective homebuyers start by creating a short list of possible candidates. Look for agents who have an established record selling a large volume of homes in the community where you'd like to live.
"You should seek out people who are 'network leaders' in the area, meaning they have the knowledge and expertise to provide you excellent service. They'll know if the market is hot or cold, if it's glutted with unsold properties or not. They'll also know the true value of any given home," he says.
Using your short list, call for references from several of the agent's past clients, asking how well their deals were handled and whether the agent demonstrated strong negotiating skills on behalf of his or her clients. In addition, ask if the agent helped identify major defects in the property before the deal was sealed.
In evaluating candidates, Lewicki also suggests you look for a candidate who has the same "negotiating profile" as you.
"Some buyers -- such as investors who could easily walk away if they lost a particular house -- appreciate an agent who is an aggressive negotiator. But other buyers, like a job transferee who has just one weekend to find the right place before catching a plane back on Sunday night, may feel uncomfortable with an agent who drives a hard bargain," Lewicki says.
Think twice before bringing a lawyer into your negotiations with the sellers.
Would-be homebuyers intent on getting the best possible deal may assume their strongest ally in the bargaining process would be a lawyer. But Lewicki says the involvement of a lawyer can have a chilling effect on otherwise cordial negotiations.
Of course, there are situations in which, by legal requirement, you must have a lawyer at the bargaining table. And the use of a lawyer could be advisable to help break a deadlock when negotiations falter over the acquisition of an unusually large or expensive property.
Negotiate over repairs with an authoritative home inspector behind you.
As Berard says, nearly every homebuyer is justified in paying the price for a professional home inspection.
"It's simply the prudent thing to do to have any offer you make on a house conditional on a satisfactory inspection that looks for defects large and small. And the more qualified your inspector, the more accurate will be his findings," Berard says.
Realize that timing can be critical in negotiating. Sometimes you happen upon a property that speaks to you so loudly that you don't want to dawdle for fear you could lose the place to another bidder."Timing is huge in negotiating. You have to strike when the timing is right," Lewicki says.