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Common Reasons that Real Estate Negotiations Fail

For the past number of years, home sellers have been fortunate to be in a real seller's market. It has been common for bidding wars to break out at open houses, and many homes have sold for far more than their asking prices. In the presence of such a great market, it may seem like the only thing the home seller needs to do is pound a for sale sign in the front yard and wait for the offers to come rolling in.

Even in a hot seller's market like the one we have just seen, however, it is important to negotiate the sale of the home properly. This negotiation process can be particularly valuable if the seller is comparing multiple offers. And if the seller's market we are in today turns into a buyer's market, it will be even more important to negotiate the best deal.

It is critical for the home seller to understand the negotiating process, and to understand how the process works. In most cases, the most successful transactions in the world of real estate are those in which both the buyer and the seller feel that they are getting a great deal. It is also necessary to understand why some real estate transactions fail, and to avoid the major causes of these failures.

Some of the most common reasons that real estate negotiations fall through are:

Allowing emotions to overrule intellect

The buying and selling of a home can be a serious emotional experience as well as a financial one. It is important, however, to view the selling of a home as a business transaction, and not to let your emotions get ahead of your intellect. It is important not to be offended by potential buyers' criticisms of your decorating style, your landscaping or other issues. Remember than everyone has different tastes, and try to take any negative commends in stride. If you are in a buyer's market, you may wish to make a small price concession to allow the buyer to redecorate the home as he or she sees fit. If you are in a seller's market, you may not need to make such a concession. In either case, however, you should not refuse to do business with a potential buyer because you feel you have been insulted.

Trying to move things too fast

Many home sellers are tempted to make the negotiations go as quickly as possible, particularly if they are in a hurry to sell, due to relocation or financial issues. It is important to avoid this temptation, and to take the time you need to compare offers. If a buyer offers a low price because the home needs major repairs, be sure that the estimate the buyer is using is accurate. Buyers will often provide an overestimate of the repairs a home needs in order to get a lower price.

Bargaining in bad faith

Bad faith bargaining occurs when either the buyer or the seller is not negotiating seriously or with the intention of actually buying or selling the home. In addition to a failed transaction, bad faith bargaining can even result in legal action. If the seller is not serious about selling the property, he or she should not put it on the market. Doing so will not only waste the time of all involved, but it could open you up to legal liability as well.

On the other hand, serious home sellers must be on the lookout for the bad faith buyer, who may waste their time with unrealistically low offers or seemingly endless negotiations. Other bad faith buyers may misrepresent their ability to afford your home, causing you to hold your home off the market for weeks, only to fail to secure financing in the end.

Not wanting to counter offer

Many home sellers are reluctant to provide a counter offer, especially if they feel the potential buyer's offer was way too low. However it is important to remember that the counter offer is a tradition with a long history in the world of real estate. Making a counter offer consists of returning to the buyer with a new price or new terms. Buying and selling a home is very much a give and take process. Failing to counter offer can leave a seller accepting a lower price than he or she could otherwise have gotten.

Letting deadlines slip away

Failure to meet deadlines is a primary reason why real estate negations fall through. Time can be either a friend or an enemy in the world of real estate, depending on the situation. It is important, therefore, that both the seller and the buyer meet the deadlines that have been established. This does not mean being totally inflexible, but if the deadlines slip repeatedly it could indicate that there is a problem looming with the deal.

Avoiding these major pitfalls, and understanding what makes a successful real estate transaction, is the best way to make sure your home selling experience is a pleasant and a profitable one.



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