RE/MAX International funded a large survey a few years ago. The idea was to learn from our customers what they valued most about our services. Somewhat surprisingly, we were told that our number one assest is our negotiating skills.
Negotiating by definition pretty much covers every aspect of a deal. Knowing when to shut up is an excellent negotiating tool. Understanding the nuances of a good asking price, a good initial offering price, a well worded contingency clause, the inclusion or exclusion of certain other clauses... these are all decisions that make or break a good negotiaton.
Example #1 - I was the listing agent for a Rosedale home owner. It stated clearly on the listing that and we clearly informed everyone to "bring your best offer". The Vendor did not want to send offers back to the buyers for further consideration in an attempt to milk even more money out of them. If there is $100.00 separating the top two offers, so be it. On offer night, we are considering three offers. Two are good and we are discussing their merits. The first one is clearly better in terms of price and closing date. However, it is conditional for 1 day on financing. The Realtor tells us the buyer wants his dad (the source of his downpayment) to have a look at the property before authorizing the cash. This Realtor also tells us he has not met the dad and does now know what he does for a living or even if he lives in Toronto. The second offer is lower by .007% but is unconditional and the Realtor is professional and can answer every question clearly. She exudes confidence. My client accepts the lower offer and the other Realtor goes ballistic. Clearly, this well crafted offer won because of what it did not contain and how it was presented.
Example #2 - I'm representing the Buyer and I'm told we are one of two offers. The listing agent is from Markham, a town where homes aren't generally sold with multiple bids. I wonder if I can somehow take advantage of this. When my client and I were visiting the house the day before, I noticed a business card from a Brampton Realtor sitting on the kitchen table. As it turns out, we are competing with this fellow. Bidding on houses doesn't happen often in Brampton. "Ah", I say to myself. This could be good. After both offers are viewed by the Seller, we are informed that both buyers can reconsider their offer and improve on it if they choose. We increase our offer by a few thousand dollars. Our offer is also sparse (no unnecessary clauses), it contains the closing requested by the seller and the deposit is huge...oh, and it's unconditional.
The selling agent then calls me back a third time and asks if we want to improve our offer... again. My client, though exasparated, really wants this house so he increase his offer by a few thousand... again. However, I tell my client that we might be able to capitalize on this situation. I discuss with him the idea of keeping the highest offer in my brief case until it looks like it's needed. I ask him if I can present the lower offer and if that doesn't appear to be successful, then I can pull out the higher offer.
I was right. When I returned to the offer table the third time, I asked the Seller if she was still considering the other offer and she said "no". So, our lower offer was successful. I saved my client $7,000.00.
That's good negotiating.