Negotiating for the best price is one of the critical duties of a buyer’s agent in Florida. Of course, there’s more to the job than negotiating house prices. It’s vital that you learn real estate negotiation strategies to get the best deal for your client in terms of price and other considerations that are important to your buyer.
Here’s a quick guide to buyer’s agent negotiation strategies. We’ll discuss what items are negotiable during a home sale and how the negotiation process works from a buyer’s perspective.
Key Takeaways
- While price is a key concern for buyers, agents should also negotiate other important factors, such as closing costs, repairs, and the inclusion of appliances or furniture, to create the best overall deal for their clients.
- Successful negotiations begin with a deep understanding of the buyer’s goals, including budget limits, desired closing dates, and cash flow concerns, which shape the overall strategy.
- Conducting a thorough comparative market analysis (CMA) and understanding current market conditions allow agents to offer realistic advice and strong rationale during negotiations.
- Maintaining transparent and respectful communication with all parties is essential for fostering cooperation and smooth negotiations, ultimately leading to better outcomes for the buyer.
What Is Negotiable When Buying a House?
Some of your clients will be uber-focused on the cost of the property. They may need to be reminded of other financial considerations when buying a house. Besides price, some other items can be considered during negotiations.
1. Closing costs
Sellers sometimes offer to cover some of the buyer’s closing costs to finalize a sale. Consider asking for this if your buyer is short on cash or wants to put all they have toward a down payment.
2. Closing date
The closing date can be negotiated. Buyers worried about cash flow may ask for a strategic closing date to put off their first monthly mortgage payment for as long as possible. While not directly related to the price of the house, this strategy is a money-saving strategy for cash-strapped home buyers.
3. Home repairs
Home inspections may uncover needed repairs. Buyers may ask sellers to complete the repairs or ask for a price discount to complete the repairs themselves.
4. Appliances
Buyers and sellers may sometimes use large appliances such as refrigerators, washers, dryers, microwaves, and stoves during negotiation. The seller may be unwilling to lower the price but may throw in all of the appliances, which could offer substantial savings to the buyer.
5. Furniture
Furniture or other large items (like TVs) can be used in the negotiation process – if the seller is willing to depart with these belongings. This could provide substantial savings to the buyer, especially if they are starting out and have no furniture.
6. Real estate agent commissions
The seller typically pays real estate agent commissions. However, changes resulting from the 2024 NAR lawsuit settlement may affect this practice. While commissions have always been and will continue to be negotiable, REALTORS® can no longer advertise buyer’s agent commissions on the agent-only section of an MLS.
This doesn’t mean the sellers will no longer pay the buyer’s agents. However, it does mean that there will be more discussions about negotiating buyer’s agent commissions.
Related Article: Key Changes Mandated by the NAR Lawsuit Settlement
How to Negotiate House Prices: A Guide for Buyer’s Agents
Here’s the typical process of how a buyer’s agent negotiates the price of a property. It’s more involved than what people outside the industry might think.
1. The buyer’s agent consults with clients to understand their goals and limitations.
What is your client’s goal – besides getting the best price for the house? Do they need a fast closing date? Are they short on cash and need help with the closing costs and real estate agent commissions? Understanding your client’s goals and limitations will enable you to better work on their behalf during negotiations.
2. The buyer’s agent evaluates the property’s condition.
Buyer’s agents are not inspectors or appraisers. However, experienced agents pay attention to the property and understand how features or conditions can affect the price. They use this information to advise their clients during negotiations.
3. The buyer’s agent conducts market research.
Real estate agents representing buyers and sellers must understand the current market conditions. When a buyer decides to make an offer on a house, the buyer’s agent conducts a comparative market analysis (CMA) to determine the property’s fair market value. This information is used during negotiations.
4. The buyer’s agent submits an offer for the property on behalf of their client.
This offer, which may include contingencies, is a starting point for the negotiation process. A buyer’s agent may also prepare a rationale for the offer to present to the homeowner and their representative.
5. The buyer’s agent reviews counteroffers with their clients to discuss potential concessions and their implications.
The buyer’s agent will ensure that their client understands the counteroffer and how each part of the offer may affect the financial aspect of the deal. They will help their client accept or reject the offer – and possibly submit another offer.
6. Both parties agree on the offer – or one backs away from the negotiations.
The deal will either be completed or fall apart when one of the parties decides to quit negotiating.
Buyer’s Agent Negotiation Strategies
Real estate agents must prioritize their clients’ interests during negotiations while being fair to all parties involved. Here are some additional tips on how to negotiate house prices and other contingencies as a buyer’s agent.
Related Article: 11 Tips to Master Real Estate Negotiation
Include escalation clauses
Consider advising your client to include an escalation clause that automatically increases the offer up to a specific amount if competing bids exist.
An escalation clause in a real estate contract helps buyers by automatically increasing their offer in response to higher competing bids up to a specified maximum. This allows buyers to stay competitive without having to manually revise their offer, potentially securing the property while staying within their budget.
Write a personal letter
Some buyers appeal to the sellers’ emotions by writing a letter explaining why they want the property. The seller might be more likely to accept a deal if they know more about the family who wants to buy the home.
Highlight the financial stability of the buyer
If your client is already pre-approved for a loan, use this financial readiness during negotiations. Of course, earnest money can also show that your client is serious about making a deal.
Include contingencies in the offer
Advise your client on how to use contingencies to affect their bottom line without changing the property’s price. For instance, including an inspection contingency can provide leverage to negotiate repairs or price adjustments based on any issues uncovered during the inspection.
Maintain positive relationships with all parties
Establish a positive, professional relationship with all parties to facilitate smooth negotiations. A good reputation in your local real estate market is critical to your success as a buyer’s agent.
Maintain open communication
Maintain clear and respectful communication with all parties, including your client, the homeowner, and the other agent. Look at the negotiation process through the eyes of your buyer and always keep their best interest in mind.
Enroll in RENI—Real Estate Negotiation Institute—to become a better negotiator for your buyer clients. RENI offers certifications for licensed real estate agents who want additional training in real estate negotiation.
Become a Certified Buyer Agent Expert by taking our six-hour livestream course. The course will teach you how to define and convey your unique strengths as a buyer’s representative and help you stand out from other agents in Florida.
Do you still need to earn your real estate license? The first step in becoming a licensed agent in Florida is to enroll in pre-licensing courses. Gold Coast Schools offers pre-licensing courses for Florida real estate agents. Our courses are highly rated and will cover topics you’ll need to know to pass your Florida real estate licensing exam and become a five-star real estate agent. It’s easy to get started. Purchase a package from our website, and you can begin your coursework in just a few minutes. Financing is available!