NegotiationThe fine art of negotiation in this economy is indeed a “fine art.” On the one hand we in the housing industry want the sale so badly we are willing to sacrifice a huge amount of profit to get it. On the other hand, buyers know they can deal and if one builder doesn’t crater, the other one will. Often, the buyer sees a new home as a commodity translated “all locations, construction quality, lifestyle, and housing products are the same … therefore, who has the lowest price in the area is the best deal.”

This is totally fallacious thinking as the Pros in the housing industry know too well. Shoddy workmanship and a misconceived plan in a marginal location will not bring the appraisal a well located, masterfully built and appointed home will. The job of the salesperson is to communicate simply … “There is no free lunch. This is the best time to buy a new home in the history of the housing industry. And, don’t compromise with the single biggest purchase you will ever make. Buy the home that’s best for your family. If rates go down a bit, so be it. If rates go up, you win. Or, try a long-term lock if you fear volatility.

Conversely, with the government printing presses running nonstop, where do you think inflation is going? The only difference between inflation and appreciation is ownership. If it appreciates and you own it, you can cash it. To help you fill the negotiation, here are some tips and tools.

THE TIPS

  1. Hold the line! You are a true value for true price builder. True price protects your sacred equity.
  2. Don’t give anything away! If you give them one seed, they’ll take the whole lawn.
  3. Add-to-value is better for everyone, not discounting price. Focus on add-to-value.
  4. If you are empowered to counter the offer, make your first pass at list price or a tad below. Not more than 1% or 2%. Then bring in the value addeds to make the “deal.”
  5. In lieu of a discount, try a 2-1 buy down. Look at the numbers. After 5 years, the buy down recipient is ahead or $1,450.00 vs. a discount of $20,000 on a $300,000 home!
  6. Remind the buyer that when real estate appraisers discover there is random discounting in a community, they take the value of the home to the lowest level of the discount.

“Never forget the power of silence;
that massively disconcerting pause
which goes on and on and may at last
induce an opponent to babble
and backtrack nervously.”
~Lance Morrow