Negotiation Strategies

Negotiation is not about winning - it is about reaching a deal that works for both parties. Learn how to negotiate effectively on price, repairs, and terms while keeping the deal together.

Phase 4: Active Shopping Stage 4.2: Making Offers

What You'll Learn

The best negotiators are not aggressive - they are strategic. Understanding the seller's motivation matters as much as market data. Your agent should find out what really matters to the other side.

Understand when you have leverage and when to be flexible
Navigate counter offers with confidence and strategy
Calculate repair credits and prioritize negotiation asks
Know when to walk away from a deal that does not work

Understanding Your Leverage

Before negotiating, understand what leverage you have. Different situations give buyers different amounts of negotiating power.

High Leverage

Home on Market 30+ Days

The longer a home sits, the more negotiating power shifts to buyers. Sellers start worrying about why it has not sold and become more flexible.

"This home has been listed for 45 days. We are prepared to close quickly if the price reflects current market interest."
High Leverage

Significant Inspection Findings

Major issues discovered during inspection - foundation problems, roof damage, plumbing issues - give you concrete reasons to negotiate price or repairs.

"The inspection revealed the HVAC system is 18 years old and needs replacement. We would like a $7,500 credit toward replacement."
High Leverage

Motivated Seller

Sellers who already bought another home, are relocating for work, or facing financial pressure are often more willing to negotiate to close quickly.

"We understand the sellers have already closed on their new home. We can accommodate a quick closing if terms are adjusted."
Medium Leverage

Slow Season (Nov-Feb)

Fewer buyers shop during winter holidays. Sellers listing during this time often need to sell and may be more flexible than spring/summer sellers.

"Given current market activity levels, we believe our offer reflects fair value for a winter closing."
Medium Leverage

Cash or Strong Financing

Cash offers or conventional loans with large down payments are more attractive to sellers. This can offset a lower price offer.

"Our buyers are fully underwritten with 25% down. This financing is essentially as certain as cash."
Low Leverage

Multiple Offer Situations

When multiple buyers want the same home, your leverage disappears. Focus on making your offer attractive rather than negotiating hard.

In this situation, strengthen your offer terms rather than trying to negotiate below asking.

Counter Offer Scenarios

When you receive a counter offer, you have options. Click each scenario to explore how to respond strategically.

Scenario: Price Counter Offer

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The Situation

You offered $365,000 on a home listed at $379,000. The seller countered at $375,000 - splitting the difference roughly in half. The home has been on market for 12 days in a moderately competitive neighborhood.

Accept the Counter Conservative

Accept $375,000 to secure the home. You are still $4,000 below asking, and the home may attract other buyers if you delay.

Counter at $370,000 Recommended

Meet in the middle again. Shows you are serious but still negotiating. Leaves room for one more round if needed.

Hold at $365,000 Aggressive

Stand firm on your original offer. Risk: seller may reject or accept another offer. Only do this if you are truly willing to walk away.

Scenario: Repair Negotiation After Inspection

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The Situation

Your inspection found: aging HVAC (works but 15 years old, ~$8,000 to replace), minor foundation movement ($3,500 repair), some electrical outlets not grounded ($1,200 to fix), and cosmetic issues. Total potential repairs: ~$12,700.

Request Full Repair Credit ($12,700) Aggressive

Ask for credit covering all identified issues. Risk: seller may reject as excessive, especially on items that are not broken.

Focus on Safety Items ($4,700) Recommended

Request credits only for foundation and electrical - actual safety/code issues. More likely to be accepted; HVAC still works.

Request 50% Credit ($6,350) Moderate

Split the cost of all repairs. Acknowledges both parties share some responsibility for the home's condition.

Scenario: Home Appraises Below Contract Price

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The Situation

You are under contract at $385,000, but the appraisal came back at $375,000 - a $10,000 gap. Your lender will only loan based on the appraised value, meaning you would need to bring an extra $10,000 cash to close, pay a higher price for a home worth less, or renegotiate.

Ask Seller to Lower Price to $375,000 Recommended

Request seller reduce price to appraised value. They cannot easily find another buyer who will pay more than appraisal.

Split the Difference ($380,000) Moderate

Offer to bring extra $5,000 cash if seller reduces by $5,000. Shows good faith and may preserve the deal.

Pay the Full Gap Risky

Bring extra $10,000 cash to close at original price. Only consider if you are confident in the home's long-term value and have reserves.

Repair Request Calculator

Use this tool to organize inspection findings and determine your negotiation ask.

Repair Negotiation Planner

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Cosmetic
Critical Items
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Important Items
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Cosmetic Items
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Total All Repairs
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Recommended Ask: Enter repair costs above to see recommendation

Timing Your Negotiations

When you negotiate matters almost as much as what you negotiate.

Good Times to Push Harder

These situations give you more room to negotiate aggressively:

  • Home has been on market 30+ days
  • Seller already purchased next home
  • Major inspection issues found
  • Appraisal came in low
  • Shopping during winter months

Times to Be More Flexible

In these situations, focus on winning the home rather than winning negotiations:

  • Multiple offers on the property
  • Home just listed (under 7 days)
  • Hot neighborhood/price point
  • Home priced below market value
  • Spring/summer peak season

Negotiation Do's and Don'ts

DO This
  • Let your agent do the talking - they have established relationships and know how to communicate professionally.
  • Support requests with data - comparable sales, inspection reports, appraisal findings. Facts are more persuasive than emotions.
  • Respond quickly to counter offers. Delays signal lack of interest.
  • Know your walkaway point before you start.
  • Be willing to compromise on less important terms.
DON'T Do This
  • Insult the seller or their home. Criticizing puts them on the defensive.
  • Reveal your maximum budget or desperation.
  • Make ultimatums you are not prepared to follow through on.
  • Negotiate directly with the seller - this bypasses agents.
  • Nickel and dime after reaching agreement.

When to Walk Away

Sometimes the best negotiation outcome is no deal. Know your limits before you start.

Price Exceeds Value

If negotiations push you above what comparable homes sell for, you are overpaying. There will be other houses.

Major Undisclosed Issues

If inspection reveals problems the seller hid, and they will not negotiate fairly, walk away from the deception.

Unsafe Repairs Refused

If the seller will not address legitimate safety issues - foundation, electrical, structural - do not take on that risk.

Gut Says No

If something feels wrong - about the house, the seller, or the deal - trust that instinct.

Financing Falls Apart

If the appraisal gap is too large and neither side will budge, walking away protects you from overpaying.

Your Circumstances Change

Job loss, health issues, relationship changes - if your situation shifts, it is okay to exit during option period.

Key Takeaways

  • Your leverage depends on market conditions, days on market, and seller motivation
  • Focus repair negotiations on safety and critical items - cosmetic issues are weak bargaining points
  • When appraisals come in low, you have strong leverage to renegotiate price
  • Let your agent handle communications - they know how to negotiate professionally
  • Know your walkaway point before you start and stick to it

What's Next?

Continue your journey with these related resources

Multiple Offer Situations Writing Winning Offers Home Inspection Guide
View Your Full Journey Map