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Buying a property

5. Negotiate directly with the seller

 

Learn how to negotiate directly with the seller

You want to buy and the seller wants to sell – now what? Negotiating should be an open and honest discussion to find a middle ground that will appeal to both parties.

Some see negotiating as a war that ends with a winner and a loser. This approach is the best way… to end up with two losers! Opt for a win-win situation instead.

 

Why negotiations between two real-estate agents are not always effective

Real-estate agents negotiate with written offers and counter-offers. A buyer makes a written offer to purchase the home at a specific price and under certain conditions. The offer goes from the buyer to buyer’s agent then to the seller’s agent, then to the seller and the other way around for the answer. The two agents are not allowed to exchange important information, such as the minimum price that the seller is willing to accept.

It’s a complicated and slow way of negotiating. The Eureka.House method is much simpler.

 

How to negotiate using the Eureka.House method

Experience has proven that it is easier and faster to negotiate verbally than in writing. However, do not make a written offer until you and the seller have both verbally agreed on the important points.

While negotiating, try to find a middle ground. A way to do this is to figure out which points are more important to the seller than to you.

Here is a good example:

  • Let’s say you are more flexible about the occupancy date, even though you’d like to move in sooner. On the other hand, the seller wants an extra month to prepare. You also want certain inclusions in the sale (dishwasher, lawnmower, snow-blower, blinds, etc.), but the seller doesn’t want to include these items, even though he doesn’t need them. In this case, you could make a deal with the seller and offer the extra month in exchange for the inclusions.

This is a very good example of a win-win situation: each gets something that matters to them in exchange for something less important. Give and take in a way that satisfies both parties – this is how to negotiate.

Make two lists to prepare for negotiations:

  • Essential conditions for you and the seller (including the maximum price you are willing to pay for the property).
  • Non-essential conditions on which you’d be willing to compromise.

Make sure NOT to show your lists to the seller.

 

Already have an agent?

The agent will probably control the negotiations. All the same, make sure to have a frank and open conversation with the seller beforehand. Nothing should stop you from verbally agreeing with the seller before writing up the offer, even if the agent is not used to this.

Remember: If you have an agent, the seller listing his/her home with Eureka.House must pay your agent 2% of the sales price, plus tax(es). The seller might even increase the asking price to cover this fee. This is why some sellers refuse to deal with buyers who have agents.

 

Read and understand the seller’s declaration

The seller’s declaration is a document containing useful and important information about a property, especially regarding existing hidden defects.

Is there water damage in the basement? Have there been any cracks in the foundation and have they been fixed? All problems, past and present, must be specified in the seller’s declaration.

This document can draw your attention to a serious problem that can’t be seen, such as vermiculite in roofing insulation. The price and sales conditions should be adjusted to account for this type of problem.

Read the seller’s declaration carefully. If the document indicates a defect, then you cannot pretend it’s a “hidden defect”, since you’ve been informed and thus have no recourse against the seller.

Remember to read this document BEFORE negotiating the asking price and other conditions.

If necessary, see our Sample Seller’s Declaration Form.

 

Be a serious and responsible negotiator

While negotiating, don’t try to lowball the seller by making an offer for a much lower price. The seller will think you’re wasting his time and can also refuse to negotiate further.

Take notes. Don’t solely rely on memory, or you can miss an important detail. Also, if you make a mistake when repeating information, the seller might think you’re trying to trick him. This will only hinder negotiations.

Very important: No matter what the outcome of negotiations, be polite and respectful. Acting inappropriately will not buy you a home.

 

Negotiate the price and conditions

In the offer to purchase, certain conditions are negotiable and others are not.

What you should negotiate:

Ce qui devrait être tenu pour acquis, sans négociation :

For more detailed information about what should and should not be negotiated, see the page What you should negotiate. You can also take a look at our Sample Offer to Purchase.

 

A second visit?

Don’t hesitate to ask the seller for a second visit before making an offer.

 

Agree verbally before drawing up the offer to purchase

You may be unable to find a common ground with the seller. It’s also possible that the seller has accepted an offer from another buyer. Don’t be too disappointed; it’s normal. Continue your search and visit other properties. The next one could be the right one!

Once you and the seller verbally agree on the important points, it’s time to make an offer. It is best to write up the offer with the seller.

Next step : See what you should negotiate or make an offer on your future home.

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