Tips for negotiating a real estate contract

On Behalf of | Nov 10, 2023 | Real Estate Law |

Negotiating is a major part of any real estate deal, and knowing how to negotiate is a skill you need if you are in the real estate business. It is normal to feel uncomfortable when negotiating, especially if you want the deal to go through.

You might not want to risk the deal by appearing too tough. At the same time, you do not want to be too soft and end up with a contract with unfair terms. These ideas can help.

Learn to be a good listener

Do more listening than talking. Many people start talking about what they want and why, trying to convince the other side, instead of first listening to what the other side wants. Learn what their priorities are so you can craft your arguments around them.

Recognize that sometimes money is not always someone’s top priority. In a real estate contract, perhaps the priority is making sure the property is in high-quality condition or in a desirable area. A seller’s priority could be making sure they are selling to a trustworthy buyer rather than getting the highest price for their property.

At some point, you will talk about money. If you are the buyer, your first offer should generally be for around the market value of the property. Starting with an offer that is too low may cause the seller to simply pass on it, so negotiations cannot even begin.

Don’t always rely on technology

The way you speak and act can make a huge difference. Be aware of your facial expressions and body language. Crossed arms can indicate defensiveness while certain other movements can signal nervousness.

Today’s technology gives us the ability to conduct transactions without ever speaking or meeting the other party, but this might not always be the best. If your negotiations appear to be stalling, consider a telephone call or in-person meeting. It can go a long way toward resolving issues that are holding up completion of the contract.

It takes time and practice to develop good negotiating skills. Even if you are sure that you have negotiated the most favorable terms for your real estate contract, it still helps to have a professional review your real estate contract before signing.