By Robert J. Bruss
Tribune Media Services

With the exception of the ordeal of buying an automobile, where price negotiation is part of the car-purchase thrill, most Americans hate to negotiate.

But negotiation is a profitable skill that anyone can learn. Home buyers and sellers can immediately benefit from understanding the unspoken rules of the negotiation game.

Even if you’re not buying or selling a home right now, these basic negotiation techniques can be used in virtually any negotiable situation, such as when buying a car or even getting a job.

1. SUPERIOR KNOWLEDGE CREATES NEGOTIATION POWER. Before you buy a car, you probably research its cost in a car-buying magazine that contains the wholesale prices. Or maybe you go to the public library and check the blue book prices. Whether or not you think about what you’re doing, you’re gaining superior knowledge to give you power over the car seller.

The same knowledge-is-power principle applies to real estate negotiations. The National Association of Realtors reports that more than 40 percent of buyers now begin their purchase research on the Internet. Additional buyer research sources include newspaper real estate home sections, newspaper classified ads and local home-buying magazines.

Additionally, most home purchasers also compare community school quality of several locations. These buyers realize top-quality schools are usually in localities where future market value appreciation of homes will be highest.

Smart sellers who want to receive top dollar can also gain superior knowledge by doing similar research, especially about recent sales (not asking) prices of comparable, nearby residences.

For example, last year some friends told me they were planning to sell their home and retire. They hadn’t listed their home for sale yet, but they agreed to show it to a friend of mine who wanted to buy a home in that area. The sellers told him their price was $1.4 million. After inspecting the immaculate house, he decided to “think it over.”

My friends are now glad he didn’t buy. Two months later, after interviewing three Realtors about listing their home for sale, they discovered their house was worth more than $2 million — and sold it for $2.1 million after just a few weeks on the market.

Only after gathering information on their important home purchase and sale issues can sellers and buyers make informed decisions. Expert help is often required.

Today’s smartest buyers usually need a buyers’ agent to represent their best interests finding and negotiating a home purchase. The buyer’s agent will almost always recommend the buyers get preapproved to put them in a strong negotiating position with sellers.

But buyers should politely remind their agent not to disclose any confidential information to sellers or the seller’s agent, such as the buyer’s time deadline for home purchase or the maximum

price the buyer can afford.

Additionally, the buyer’s agent can research the seller’s situation, such as by finding out their purchase price, how long they’ve owned the home, the approximate mortgage balance (if any), and other valuable information the buyer can use when making a purchase offer and negotiating the final sales terms.

2. FIND OUT AS MUCH AS POSSIBLE ABOUT THE OTHER NEGOTIATION PARTY. Another successful negotiation technique is to learn as much as possible about the other party to the negotiation while revealing as little as possible about your motivations. In real estate negotiation, if you are a highly motivated buyer or seller, chances are the other party will get the best of you.

For example, if you are selling your home because of a divorce, when the buyer learns this, he or she might try to take advantage of the situation, knowing you are anxious to sell the house. Or, if you are a corporate transferee buyer who needs to purchase before September when your children start school, you are a motivated buyer who might easily overpay for your new home.

Of course, if the motivation for the sale or purchase could affect the other negotiation party, such as a pending foreclosure sale of the house in two weeks, it should be disclosed so the buyer can get the purchase closed quickly.

3. UNDERSTAND THE IMPORTANCE OF TIME IN NEGOTIATING. Closely related to learning as much as possible about the other negotiation party is to understand the importance of time in a successful negotiation. In addition to probing to learn any deadline the other party might have, it’s important to get the other negotiator to invest considerable time in the negotiation.

To illustrate, before I bought my current residence with a lease-option, my buyers’ agent negotiated extensively with the sellers, through their listing agent, for several weeks. Almost every day she phoned their agent to discuss various details of the transaction.

After about two weeks, with no other prospective buyers in sight, the sellers finally caved in and accepted my lease-option offer (although they would have preferred an outright sale). My buyers’ agent successfully used time invested as a negotiation tactic to get the sellers to accept my lease-option offer.

4. AVOID SHOWING YOUR EMOTIONS. Although very difficult, smart negotiators never show their emotional involvement. To illustrate, if you or your spouse let the seller’s listing agent see how much you love a home, chances of negotiating a favorable bargain price decline greatly.

In other words, no matter how much you want or need to buy a home (or anything), don’t telegraph your emotions so the other party can gain the negotiation edge.

5. “HE WHO CARES LEAST” WINS THE NEGOTIATION. If you absolutely must quickly buy or sell a home, you’re not in a strong negotiation position. Instead, try to avoid getting into that “must win” situation.

When a buyer or seller gets greedy, such as a seller demanding a very high price, they usually lose the negotiation when the other party walks away. A better attitude is to be reasonable — or simply to stop negotiating.

There’s an old home-sales motto: “The first offer is often the best offer.” Sellers frequently think the first offer they receive is too low. Rather than accept it, they summarily reject it, sometimes without even a counteroffer.

Later, when better offers don’t materialize, it is not unusual for the seller’s agent to ask that original buyer if they still want to buy the home at the initially offered price. Unfortunately, by then that buyer has often purchased another home.

6. DON’T GET INVOLVED IN AN INVOLUNTARY AUCTION. Professional negotiators, such as car salespersons, often pressure buyers into an immediate purchase decision by saying another party is interested in buying the same car. This negotiation tactic is also sometimes used on home buyers and sellers.

The home auction negotiation tactic can occur, especially in a slow buyers’ market, when a seller is told, “The buyers are considering your home and another one, so if you don’t accept this offer now, I’m afraid they might buy the other home.”

Or, buyers might be told, especially in a hot sellers’ market, that “Another buyer is bringing in a purchase offer, so you better make your best purchase offer right now.”

The best way to combat an involuntary negotiation auction situation, unless you enjoy bidding competition, is to temporarily walk away.

However, as a buyer, if you’re told there is another buyer making an offer, but you really want the property, you could write in your purchase offer, “I will exceed any other valid purchase offer obtained on this property within five days by $3,000.” This prevents the negotiation auction from getting out of the buyer’s control.

7. AIM FOR A “WIN-WIN” NEGOTIATION, AND ALWAYS CONTRATULATE THE OTHER PARTY. Buyers and sellers, as well as their agents, should aim for a “win-win” negotiation outcome where both parties get what they want without giving up too much. In other words, both sides feel satisfied with the result.

Even when you know the other party has a motivating situation, such as a divorce, foreclosure, unemployment, illness or job transfer, for your long-term satisfaction, it’s best not to take unfair advantage by emphasizing it.

Finally, after the transaction successfully closes, be sure to congratulate the other party and their agent on their skillful negotiation — even if you think you were the most successful negotiator.

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