Top 6 Negotiation Strategies Buyers Use
When looking to buy your first home, there are some tactics you can employ to lower your price. Perhaps you have read about negotiations in books or sought training in pressuring strategies. As a buyer, when you take this kind of positional and win-lose approach, their goal is generally to gain the most for themselves at the expense of the seller.
Here are 6 common negotiation tactics buyers can use to gain an advantage in sales.
How to Negotiate Price
- Anchoring. The buyer will suggest a target price to "anchor" the bargaining price.
- Whack Back. The buyer will push back on the first price offered.
- Sticker Shock. The buyer will act shocked by the price the seller offered.
- Cherry Picking. The buyer will offer a solution to gain concessions.
- Pencil Sharpening. The buyer will prime the seller into accepting a price drop.
- Going, Going, Going. The buyer will create a sense of urgency, and may even threaten to leave entirely.
By stating that you are looking for a set price and no more, the buyer is sharing a target price to anchor a bargaining range. Ideally, the seller should be the first to suggest a price, a step in the 6 essential rules of negotiation. They shouldn't wait for the buyer to do so, and if that doesn't work out, the seller shouldn't accept the number. Instead, they should question how they came up with that number, and how it fits in their budget. We recommend coming to negotiations prepared with an understanding of alternatives, as well as the seller's.
No matter what the listing price is the first time, the buyer will inform the seller that the price is set too high. This is a common buyer tactic to push back on the first price offered in search of a lower one. The seller should ask why the buyer feels this way, listening fully. Money objections aren't always about money at all, instead, it is a learned tactic that seems to work. If the buyer's objectives are focused on, there can be ideas to build value without having to lower the price.
The buyer will appear shocked by the price the seller has offered. It might be an orchestrated reaction, rather than a true, genuine surprise. The seller should wait out the theatrics and ask why it might seem too high to the buyer. A buyer's reasons might be faulty, and in this type of price pushback, it is important to help buyers understand the positive impact the seller's solution will have on them to justify the investment.
A solution might be unbundled by the buyer to gain concessions in assuming the price will stay the same. A seller should address the issues in making it appear that the new terms came out of nowhere and nothing can be done. Sellers don't have to accept the changed terms because the buyer changed them. The appropriate pricing should be discussed between the seller and buyer.
A common pushback tactic used by a buyer is the insistence that the seller will have to do better and that the buyer will need the home for less. This is to get the seller ready to drop the price because it is expected. The buyer might offer to close at a lower price until the value is established. The seller should hold their ground on differentiating the value offered, focusing on what makes the solution the best choice.
Going, Going, Going
Time pressure is a tactic used to get the seller to lower the price. This can be a power play on the buyer's part, and if the seller caves, then it will be expected in the future.
In conclusion, for Las Vegas home buyers, employing effective negotiation tactics can make a significant difference in securing a favorable deal when purchasing your first home. While it's important to be aware of these tactics, it's equally vital to approach negotiations with fairness and respect for both parties involved. Anchoring, whack back, sticker shock, cherry picking, pencil sharpening, and going, going, going are common techniques that buyers can use to their advantage.
However, sellers should be prepared to respond thoughtfully to these tactics by understanding their own pricing strategy, listening to buyers' concerns, and emphasizing the unique value of their property. Ultimately, successful negotiations should result in a win-win outcome, where both buyers and sellers can achieve their objectives in the Las Vegas real estate market. If you have further questions about home buying in Las Vegas, don't hesitate to reach out to your trusted Las Vegas Realtor for guidance and assistance.
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