Last Updated on April 4, 2024

How Will Negotiations Go When Buying A House?

By Alan F Macdonald

How Will Negotiations Go When Buying A House?

Short Answer

It depends.

Long Answer

I know I use that short answer a lot. It’s exactly what I say to my clients when they’re ready to make an offer, though. They want to know what to offer and where those negotiations will go; So I kept this record of negotiations so I could show what one negotiation was like. All negotiations are different, this is not typical. There is no typical, but here is an example:

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    My buyers liked this house in south Edmonton. It was priced at $579,000.

    My clients offered $550,000 for the home.

    Sellers counter at $577,000 and asked for a sooner possession (a hard counter).

    Buyers offer $555,000 and agreed to 12 days earlier possession.

    Sellers counter $572,000.

    Buyers offer $560,000.

    Sellers counter $570,000.

    Buyers offer $562,000.

    Sellers counter $569,000

    Buyers offer $565,000

    Sellers counter $568,000

    Buyers firm at $565,000

    Sellers counter $567,000

    Buyers still firm at $565,000

    After a few days, the sellers’ real estate agent calls back and says the sellers will take $565,000. However, my clients change their mind and no longer want the house. So you tell me how negotiation is supposed to go! My clients always planned on $565,000 as their target price for the home, and after they got their intended target price, they walked. Bet you didn’t see that coming, did you? Well that shows that you never know how negotiations are going to go. This took many days with many phone calls and my clients walked away from negotiations and ended up purchasing a house in an entirely different neighbourhood. You just can’t predict how real estate negotiations are going to unfold.

    Here is a chart of the negotiations and how they went:

    House purchase negotiations example

     

    This situation isn’t meant to imply that there are no techniques to negotiation – there are. But the example is meant to illustrate the complicated nature of people. And people only get more complicated when a large sum of money is on the line. A lot of factors are at play in real estate negotiations, but predicting an outcome is like trying to predict anything that involves people and money – it’s not possible. You can guess and estimate and theorize, but knowing what’s going to happen, isn’t going to happen.

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