How To Negotiate a Real-Estate Deal, and Actually Get What You Want

Negotiating can save home buyers and sellers money. According to a survey conducted by LendingTree in May 2023, 63% of buyers have successfully negotiated a home’s price, 38% negotiated closing costs and 36% got sellers to pay for repairs. 

It is common to engage in negotiations—sometimes protracted ones—in real-estate deals, particularly for acquisitions of luxury homes. But as a new year brings new deals, a refresher in negotiation basics never hurts.

Mick Duchon, a real-estate agent with the Corcoran Group in Miami Beach, spent several weeks last year dealing with the back and forth between his seller, who owned a 2,700-square-foot condominium in a luxury building in Surfside, Fla., and an interested buyer. The unit was listed in August for $14.9 million, but the buyer made an initial lowball offer of $13.25 million. 

“My client was surprised because it was so far below the most recent comparable sale,” said Duchon. “But I explained that since we are in the luxury space, there are not many transactions on an annual basis, so we should consider engaging with this buyer by sending them a message that there was flexibility but that we were nowhere near a deal.” 

The seller dropped his asking price to $14.5 million, and the buyer countered at $14 million. When the seller refused to budge, the buyer upped his offer to $14.3 million, leaving the parties $200,000 apart. The seller ultimately agreed to the $14.3 million offer, and the deal closed in December at that price. 

Terms other than price are also commonly negotiated for luxury properties. Leonard Steinberg, a corporate broker at Compass in New York City, said that furniture is frequently negotiated and for a very good reason: Designer furniture can take a year or more to manufacture, so asking for furniture to be included in the sale is a “smart ploy” by a buyer, he said.

But sometimes buyers have more unusual requests. When Andrew Fortune, broker/owner of Great Colorado Homes in Colorado Springs, represented the seller of a $1.075 million home in 2021, he was faced with a term he’s never seen before; the buyer’s request for an extended closing date to install a motion-activated bear cam on the property to see if bears were present (they weren’t). “I hated agreeing to it,” he said. “But in the end, we sold a very luxurious home in a slow luxury market, so it was worth it.” 

Although the buyer was concerned about bears because the house backed up to a state park, the seller had only seen one bear in over a decade. Since he knew the risk of the deal falling through was low, the seller agreed to the terms.

“Buying or selling a house can get very emotional,” said Mori Taheripour, a lecturer at the Wharton School of the University of Pennsylvania and the author of “Bring Yourself: How to Harness the Power of Connection to Negotiate Fearlessly.” “The more info you have ahead of time, the more levelheaded you remain, and you won’t make a decision you’ll regret later.”

According to the LendingTree survey, 24% of buyers and 32% of sellers later regretted concessions they made when haggling over a home. Information such as how many houses are on the market, how long they have been listed, whether prices are rising or falling, the seller’s motivation (if he or she needs to sell due to a job transfer or other reason) and how much equity the seller has are all key factors that could give you a leg up as a buyer during negotiations. Similarly, if a seller knows that the prospective buyers have already sold their home and need a place to live quickly, that information gives the seller an edge.

“As a buyer, I would love to know if the seller has other buyers about to put in an offer. That tells me the seller has a Plan B, so I better hustle,” said Leigh Thompson, a professor of management and organization at the Kellogg School of Management at Northwestern University, who has written several books on negotiation. “Or, if I find out the seller hasn’t had a showing in six months, I know I’m in the driver’s seat.” Your real-estate agent can be an invaluable source of this type of information if he or she has a good rapport with other agents in the area. 

If you’re negotiating the purchase or sale of a home, either on your own or in conjunction with a real-estate agent, here are some things to consider. 

Don’t be afraid to ask for what you want, but be careful how you phrase it.

Everything is negotiable. If there is a specific term you want in the contract, ask for it, but do it in a manner that is respectful and diplomatic. “Try to sound reasonable, and don’t make demands,” said Steinberg. “The worst thing that could happen is you get ‘no’ for an answer.” Try phrasing the request in the form of a question, such as “Would you consider including furniture in the sales price?” as opposed to making a demand, such as “We won’t agree to the price unless furniture is included.” 

Adjust your negotiation strategy for new construction.

Developers are reluctant to negotiate on the purchase price of a new home because the recorded price affects the perceived value of other homes in the development they are building, said Jeremy Kamm, a real-estate agent with Coldwell Banker Warburg in New York City. “Whatever negotiability there ordinarily is in new construction is all done on the back end in the form of concessions,” he said. So, while developers may refuse to budge on asking price, they might throw in additional options or upgrades, such as window treatments, upgraded cabinetry or flooring or even cover closing costs or prepaid condo or co-op maintenance fees. 

Don’t push too hard.

Good negotiators take into account the relative bargaining power of the parties. Someone in a better bargaining position, such as a prospective buyer in a very slow market with lots of comparable homes, has more leverage and may be able to push harder to get the terms they want than someone in a less-favorable position. But push too hard, and you risk losing the deal entirely.

“Especially in a tight real-estate market, if you approach the negotiation as a win/lose proposition, you’ll make it a lot easier for somebody to reject your offer outright,” said Taheripour. “But if you are more collaborative, if you establish a relationship, it’s more likely both sides can work through the problem together.”