The average real estate transaction includes a fair amount of psychology. Both sides -- buyer and seller -- have to feel warm and fuzzy about the offer on the table. Each side has to be convinced that he or she landed a fabulous deal. Everything matters; and yet, buyer and seller are determined to convince each other that nothing matters. "Take it or leave it" is often the underlying message each side is trying to send.

When you're the seller, how can you possibly "stay cool" when it's important to quickly sell your home before that sudden job transfer or to get a child into school at the start of the year? If you're the buyer, same question.

Within the bargaining process, regardless of the pressure involved, there is a need to stay cool because buyers and sellers can smell desperation. If you've got to sell your house in a hurry and a prospective buyer knows it, he or she clearly has the upper hand.

If, on the other hand, you're selling in a tight market, and you've got prospective buyers who are gushing about how perfect your house is, that's going to cost them.

"Sometimes the mere psychology of creating urgency and the element of "perfect timing" may just be enough to bring up multiple offers," says Ron Wynn, a Los Angeles broker. "This is a very tricky market, and sometimes staying a step ahead of the market is the answer."

For sellers, the key is time. If you've got time on your side, you won't feel pressured to grab the bait the first time it floats by. Instead, you can wait until you receive the offer that you and your broker feel is justified.

New York attorney Joshua Stein says that "once the parties are into negotiations, both sides usually want to eliminate uncertainty and to resolve issues quickly. The Negotiator should not let this sense of urgency lead him to concede issues without getting something in exchange." (See The Art of Real Estate Negotiations: Practical Psychology at the Table)

Houseclicks.com, say sellers are driven by individual motivations that ultimately determine the ease with which they negotiate with buyers. "Extremely Motivated" sellers are typically driven by such circumstances as a divorce or death in the family; however, while negotiations tend to be easier with extremely motivated sellers, emotions also may run higher.

At the other extreme are what Houseclicks refers to as "Take a Shot" sellers who have no particular motivation (or timetable) for selling their homes and are merely on the lookout for a high-paying buyer. Take a Shot sellers carry with them a reputation for being difficult negotiators. Regardless of the profile they fit, sellers find it difficult to rid themselves of the "my home is my castle" and "I know exactly what my home is worth" mentalities, both inevitable side effects of the years of memories and memories invested in their homes.

It's human nature, perhaps, that whenever we make purchases -- particularly major ones -- we seek reinforcement from ourselves and others. We like to be given constant confirmation that we've landed a great deal -- that we've purchased wisely and couldn't possibly have done any better.

So, if you're negotiating, be flexible. If you've gotten most of what you want and the other party wants a small concession, it may make sense to give it so that the other party can sense some "victory" in the bargaining process.

"Both parties need to feel they have had a constructive process of give and take, producing a reasonable outcome in which neither is a victim," Stein says. "Any suggestion that the result unreasonably favors one party or the other may lead the 'loser' to think they gave away more than they had to."

For more articles by Courtney Ronan, please press here.

Published: March 28, 2001

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