by Mike Colpitts 
Now more than ever negotiating home prices is an essential skill in real estate. Learning how to negotiate home prices is key. I’ve been trained as a skilled negotiator in several schools and certified as a real estate agent to battle for my clients. Working as a real estate analyst for seven years taught me some of the best lessons to fight for my clients.
The market in Fort Myers, Florida and surrounding communities is picking up in sales these days, but prices are declining so sellers understandably want more money for their properties. Sellers are fighting for higher prices and buyers are still hoping to get that rock bottom deal. The best time to get the best deal on a home or condo might be when the market is still declining.
Negotiate Home Prices Step #1
As an agent representing a buyer, I bring comparable sales that show the current value of the seller’s property. That way I get to show the homeowner what the true value of their home is. There’s really no argument here. Pricing direct like-for-like properties demonstrates to sellers what the true value of their home is in the current market. Sure, exceptions can be made like an extra bedroom or a pool, but all in all the clear value of a home can be demonstrated meaningfully to sellers so they understand the real value of their home.
A new paint job or better front yard landscaping might make a few thousand dollars difference, but not a significant amount to impact real estate negotiating much.
Seller Motivations Key to Negotiate Home Prices
Representing the seller can be done the same way clearly demonstrating to the buyer or buyer’s agent the true value of a home. Negotiating to support your clients home price when its higher than any other comp in the current market can be difficult at best. If sellers are stubborn or refuse to budge on their price when given or offered a lower price it might be best to let them think about it overnight. Afterall, the current market isn’t like the housing market that was racing during Covid.
Very few negotiations will be disrupted with new or better offers.
Negotiating price is only part of the agent’s job. Terms, dates for contingencies and other issues like inspections are also integral to the home selling process. As home prices continue to decline and sales escalate, more and more agents tend to leave the business. This is my fourth real estate market decline since 1990 when I first started selling real estate, and all of them have been different, driven by varying factors and economic drivers.
Negotiating real estate deals in any market takes a lot of work, knowledge and patience. Agents who realize this do better for their clients.
When it comes down to it, agents represent their clients and may make recommendations if they are asked to do so under varying agency representation agreements. Agents who are experienced in the practice of real estate and and are negotiating real estate deals for their clients get their clients more money at the closing table.
Tough Clients Can Take Months
The most difficult clients I have ever had have been those who refuse to budge on price when they are given a very strong offer on their property. Once I had a client who got 7 offers at list price or higher and refused to take any of them. They wanted more money. This went on for several months and they eventually sold their home for less than they were first offered. The market was changing. Such is life in real estate.
The first offer is usually the best offer or eventually works out to be the best offer.
When you hire an agent to work with you, you might ask them about their most difficult experiences. Get ready for a long story. Successful real estate agents enjoy telling you about their experiences. Negotiating real estate deals isn’t for everybody but for those of us who really enjoy the business, negotiations are the key driver in the whole selling process.
There are very few secrets on how to negotiate home prices successfully. Clear communication is the most important aspect of real estate negotiating. Few people realize that there are two types of sellers in any transaction. There are also generally two motivations. People either want to sell to make a profit or gain something or are motivated by fear. The fear of loss is a major reason.
Perhaps a homeowner just lost a job or needs to get money to buy a new home elsewhere. There are all sorts of twists on the motivation of sellers. Some homeowners are open about their motivations. Others keep it a secret like it’s a top secret security issue. Does it matter what their motivation is? Of course, to the seller.
I once sold my own home just 14 months after buying it. The housing market wasn’t moving much. It was in a transition stage, and I wanted to move to another state to take a project director’s position in a major real estate development.
I was understandably anxious to sell quickly. Did I tell the other agent? Yes, because I was motivated to sell as quickly as possible to get moving.
The Buyer Got a Great Deal!
Should I have had another agent represent me so I would have been detached from the transaction? Yes of course. Everything is 20/20 in the rear-view mirror. I learned that agents who represent themselves have a fool for a client. When I see people taking real estate classes only to represent themselves I always have to shriek. Such is life when you learn how to negotiate home prices.