Negotiating for the best price is one of the critical duties of a buyer’s agent. Of course, there’s more to the job than knowing how to negotiate house prices. However, you can show your worth as an agent when you help your buyer get the best deal possible.
Here’s a quick guide to buyers agent negotiation strategies. We’ll also discuss what items are negotiable during a home sale and how the negotiation process works from a buyer’s perspective.
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.
2. Closing date
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. The closing date can be negotiated.
3. Home repairs
Home inspections may uncover needed repairs. Buyers may negotiate for those repairs to be completed by the seller 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 the negotiation process. The seller may be unwilling to come down on 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.
6. Real estate agent commissions
The seller typically pays real estate agent commissions. However, recent 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 that buyer’s agents. However, it does mean that there will be more discussions about negotiating buyers agent commissions.
Related article: Key Changes Mandated by the NAR Lawsuit Settlement
How to Negotiate House Price: 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 buyers agent consults with clients to understand their goals and limitations.
What is your client’s key consideration? Do they need a fast closing date? Are they short on cash and need help with the closing costs and real estate commissions? Understanding your client’s goals and limitations will enable you to better work on their behalf during negotiations.
2. The buyers agent evaluates the property’s condition.
Buyers 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 buyers 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 buyers agent will conduct a comparative market analysis (CMA) to determine the fair market value of the property. 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 buyers agent may also prepare a rationale for the offer to present to the homeowner and their representative.
5. The buyers agent reviews any counter offers carefully with their clients to discuss potential concessions and their implications.
The buyers agent will ensure that their client understands the counter offer and how each contingency 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.
Buyers Agent Negotiation Strategies
It’s critical that real estate agents put their clients’ best interests first during negotiations while also being fair to all parties involved. Here are some additional tips on how to negotiate house prices and other contingencies as a buyers agent.
Related article: 11 Tips to Master Real Estate Negotiation
Escalation clauses
Consider advising your client to include an escalation clause that automatically increases the offer if competing bids exist.
Personal letters
Some buyers appeal to the sellers’ emotions by writing a letter explaining why they want the property.
Financial stability of buyer
If your client is already pre-approved for a loan, use this financial readiness during negotiations.
Related article: Homebuyer’s Loan Guide: 7 Types of Mortgage Home Loans
Contingencies
Advise your client on how to use contingencies to affect their bottom line without changing the property’s price.
Positive relationships
Establish a positive, professional relationship with all parties to facilitate smooth negotiations.
Open communications
Maintain clear and respectful communication with all parties, including your client, the homeowner, and the other agent.
There’s much more to being a real estate agent than learning how to negotiate house prices. During your pre-licensing courses, you’ll learn about state and federal real estate law and other key industry concepts to help you pass your real estate exam. Enroll in pre-licensing courses with Colibri Real Estate School. Colibri offers flexible online learning options for busy students. Our courses are highly rated and will cover topics you’ll need to know to pass your state’s 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.
