There is no "one size fits all" strategy of negotiating a real estate contract. Negotiation is process of communication back and forth in order to reach a joint agreement. Many of our clients have been very experienced negotiators, and we have learned a great deal from them, as well as from books on subject. We would like to share some of our thoughts on negotiating with you:

What do we want to achieve in a negotiation?

The best negotiators bring an attitude of high expectations to table. They are hard on problem and soft on people. Letting seller know what you need, in a clear and reasoned way, is first step toward getting it. We try to keep all of these goals in mind:

Enable you to move into your new home. Obtain lowest possible price for property. Close within an acceptable time frame. Solve any repair issues fairly. Have no title, survey or loan problems, or solve any that do arise. Develop a good working relationship with seller. Have no future problems after closing.

Is a cooperative or combative approach more effective?

Our experience shows that cooperative style is most effective and efficient way to complete a transaction. Professional negotiators usually try to preserve relationship between parties, and work together to resolve problems. The goal is not to reach an impasse in which neither seller's nor buyer's needs are met. Buyers sometimes submit a letter to seller describing why their house is not worth what they are asking, pointing out deficiencies, etc. This almost always backfires, and starts negotiation off with a defensive seller. It is best to anchor your price to marketplace, while remaining very complimentary of their home.

How do you work with a combative strategy by a seller or agent?

The combative style is sometimes encountered. This strategy includes: negative comments, emotional statements, table pounding, threats to walk out, ego involvement, and stated positioning. Creative solutions and trade offs are not as likely to be found in this environment. Working with a combative style negotiator requires a considered approach:

Do not respond emotionally. An angry or defensive response will escalate negotiation into a no-win battle. Do not argue. Arguing usually positions them more strongly and drags negotiation process off course.

Do not ignore their arguments or statements. Listen carefully, but do not accept or reject. Firmly anchor pricing and other terms to outside data. Show that price has not been chosen arbitrarily. Reduce misunderstanding by following up with written summaries of discussions. Do not allow hazy or unclear proposals to stand. Offer some "wins" on some of terms. Face saving is very important.

Look for ways to meet their underlying interests.

Remember that they may have a beautiful home that satisfies buyer's goals.

Is every point in contact negotiable?

Yes. However, one of most effective means of coming to an agreement is to rely on consistent standards or norms when possible. For example, it is common practice for seller to pay for title policy and for buyer to pay survey cost. Using accepted standards prevents buyer and seller from haggling over every point. Working within accepted "norms" for our area helps to legitimize offers, and focus negotiation on just a few points. On other hand, all points in an offer can be used to help structure deal. They offer trade-off opportunities for both parties to get what they want from negotiation.

According to Webster’s New World Dictionary®, Inflation means "an increase in amount of money and credit in relation to supply of goods and services".

To complicate matters, did you know that according to Federal Reserve (ironically/comically charged with maintaining a stable dollar) and its own records, there is now twice number of dollars in circulation as there were in 1995? I bring this up to ask question: are things we purchase worth more as time goes by or is money we buy them with worth less?

Good as Gold?

Ask people following gold or supporting a return to a gold backed currency (which by way was written into United States of America’s Constitution). The dollar is worth less and less each day. Yet, in a now famous speech delivered last year, newest Federal Reserve Governor stated that “Fed” had a printing press and was not afraid to use it. Whether this concerns you yet or not, is not purpose of this article.

What should be of interest to us all is to dare look for signs of this inflationary phenomenon in other places in our lives.

Then and now It’s fairly obvious when comparing everyday items such as glass bottles, cans and cars built 50 years ago to those built today. Technologies have certainly helped streamlined waste in this process, but important question here is can we buy more or less product now with same amount of money? For example, deposit for recycling a bottle of cola is now more that price of whole drink with bottle not many years ago.

But let’s look deeper. For instance: • How many TV channels are available now? Do you get same value from watching? • What is cost of using foul language now compared to a number of years ago? • What is price of hours you work compared to value of your salary, health, stress, etc? • What is price of accessibility (with mobile phones, e-mail, etc.) compared to value of your (health, stress, free time)? Which is increasing / decreasing? • How much value do you receive from your taxes and all its paperwork? • What is current level of trust you have for authority figures? • What about family values? (Some Swedish children were recently asked what home was and their answer was “a place that you always cleaned”.) • Finally how much time do you have nowadays to just reflect?

In each of these cases, which way is cost trending compared to its value? Can we agree that while value of each either remains same or is being diluted, cost continues to increase?

The consmer society Let’s now return to subject of money and our seemingly endless need as a society to purchase more stuff. It is interesting to note that as our need for more stuff keeps increasing, values mentioned above (and many others) seem to be weakening. These values and other so called "human" and "societal" factors seem to be slowly breaking down, but in such a benign way that process does not seem to cause much concern. Just like proverbial frog who will eventually boil to death in a slowly boiling pot of water, we seem to be numbed to inflation’s effect. Yet, more we lose these precious properties and qualities that make us human, more we seem to becoming machines "stressed" to perform better. How much of your life has become about performance and effectivness?