Real Estate Negotiations – An Ultimate Guide


|10 min read

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Being able to ask for and get what you want is a skill that can serve you in many areas of life. In real estate, it can make a difference in your satisfaction with your experience. Whether you are selling or buying a home, there are lots of opportunities to work things out to your benefit. 

This article is a comprehensive guide on all the areas of real estate where negotiating comes into play. If you’re ready to buy or sell a home, read on to be sure.

Real Estate Negotiations

How to Negotiate with Real Estate Agents

Can you negotiate with real estate agents? When it comes to listing or purchasing a home, there is always room for negotiation. You may be trying for a higher offer from a buyer or getting sellers to lower what they will take for a property. You can pretty much always expect to negotiate in a real estate transaction.

Less common but equally important is negotiating with real estate agents. Both those who represent you and those representing the other party.

Only half of all homeowners negotiate with their agents before listing. Missing out on savings and better terms.

If you’re wondering how to negotiate with real estate agents, read on.

What is Negotiable?

You can negotiate any aspect of your contract with an agent before signing. By far, the most significant thing to negotiate is an agent’s commission fee. Most agents need sales to grow their portfolios. This means they may be flexible in the fee they collect to get those sales.

What you can negotiate:

Commission Rate

This is a percentage of the total sale price that goes to both the buyer’s and seller’s agent. The seller usually pays this expense, even in a For Sale By Owner home. 

This amount will depend on the agent, but it is something to discuss before committing. The typical commission is 5-6% of the cost of the home. The agents split this between them and their respective Brokerage.

For instance, on a $500,000 home, a 6% commission rate would be $30,000 split between both agents. 

Remember, the rate can vary and be different based on your location and agent experience. It’s reasonable to find out first what the commission rate is for real estate agents in your area.

The good news is, as with most things, this rate is negotiable.

Marketing Costs

These will vary by the agent in both price and what’s included. Most of the time, this cost includes:

  • Photographer,
  • Property description writer
  • Promotional copywriting
  • Promoted social media ads
  • Sometimes even space in home magazines

Closing Time/Contingencies:

If you’re planning to move into a home after the sale of yours, you can put a clause in the contract that only guarantees a sale after you find a suitable replacement property. If it’s a seller’s market and buyers are scrambling for properties, you can expect them to honor those wishes without issue.

Tips for Negotiating a Real Estate Deal

Need help negotiating with a real estate agent? We’ve got you covered. The good news is, it’s not as difficult as you might think.

Here are some things that might help you get the price you want:

Be willing to do things yourself

  • Maybe you handle sharing your listing on social sites
  • Take your own pictures
  • You can work on getting your home staged or
  • Be the one searching for homes you’re interested in

Educate yourself on the market

Know what the going rate is for an agent and what your agent usually asks. If you are selling and it’s a hot market, there might not be a need for an open house or other things that take a lot of work.

Get to know the agent and what might make their job easier

Does your agent spend a lot of time on one or two things that you might be able to take off their plate? Lessening their workload could help them be open to a lower commission.

Don’t be afraid to ask

It doesn’t hurt to try to ask for a rate you want. If you think it’s fair, have the conversation.

Give something back to your agent

  • Purchasing and buying with the same agent
  • Offering a list of referrals
  • Agree to work with them on more properties (if you’re an investor)
  • and selling during slower times to help up the quota

Why an Agent Wouldn’t Want to Negotiate

There are a few reasons why an agent would be reluctant to negotiate terms with you. The most obvious is that they don’t want to lose the money. Additionally, many agents think sellers are difficult to work with when they try to get a better rate.

Agents might worry that if they give you a discounted rate they’ll have to honor it for everyone you tell as well.

If you want to know the best rate for your agent, compare their value and their costs.

You Get What You Pay For

It’s important not to get too greedy when it comes to cutting commission fees in an attempt to cut costs. In slashing fees, you can slash the quality of work performed on your behalf. When you negotiate with real estate agents, you can’t expect an agent to put in the same amount of work for a 6% commission as they do a 1%.

Though you have the ability to say how much you are willing to pay, asking an agent to accept a fraction of their normal rate is unreasonable. If you want your agent to do everything it takes to sell your home or find you your dream home, it comes at a cost. As with many things, a good rate motivates agents to go above and beyond.

As with anyone doing a service for you, the price you pay is negotiable based on your needs and expectations. You are able to negotiate with a real estate agent to get a rate that works for you. Use our ideas and tips and if you are still looking for an agent, search our directory for the best in your area.

How to Negotiate When Selling a Home

You’re ready to sell your house. You list and get an offer, now what? Depending on the market and the people involved, you may have most of your work ahead of you. Rarely does a real estate transaction end after one interaction.

There can be a lot of back and forth before terms are agreed on. That is when being able to negotiate well can really benefit you as a home seller. Read on to learn how they can help and how you should use them.

When to Negotiate

If you’ve listed your home for a fair price and feel it is in good condition, you may think someone will come along and simply offer the asking price and everything will be simple. Rarely does this happen. Even in a seller’s market there are a lot of little pieces of the sale to think about. 

As a seller, it’s important to determine what your bottom line is. What price and terms are you willing to accept to close the deal?

That doesn’t mean you’ll get to that point, but it will help you know when to walk away.

What to Negotiate

In a real estate transaction, everything is up for negotiation. Some of the main ones that you will most likely have to think about are:

  • Home price – how much the buyer will pay
  • Closing date – when the ownership changes hands
  • Rent back – after closing, how long the previous owner can stay and who covers that cost
  • Repairs – who will pay for any repairs that need to be made
  • Closing costs – who pays closing costs
  • Contingencies – whether to include

These are all things that can make an offer more or less appealing. You have the option to ask for what you want in all of these items and to negotiate until it fits what you feel is appropriate for your home.

How to Negotiate

Entering into a negotiation may seem intimidating. Luckily, as the seller, you usually have more control as you already own the property someone else wants. Unless you are in a desperate situation, there is no need to accept terms that you are not completely comfortable with. Read on for some tips to get started.

Find a Good Real Estate Agent

Agents have all different approaches to doing their job. Some are overly aggressive and some take a backseat approach. Wherever they are on the spectrum, they have likely found what works for them. You need to decide what approach you prefer and find an agent that fits.

You also need to assess an agent’s professionalism, knowledge, and experience. All of this can influence whether or not you will be successful in negotiating. 

Taking time to do research on agents in your area and picking the best one for you will go a long way in your home buying process.

Have Solid Reasons Behind Your Asks

If you intend to reject offers below your list price or not negotiate below a certain threshold, make sure you have reasons.

These reasons can be the current market, what homes in your neighborhood have been selling for recently or updates you made on the home. It will be obvious to homebuyers if your house is overpriced

If you are able to give solid reasons and the comps and market research support those reasons, a buyer is more likely to concede to your asks. 

If it seems your price is high for no good reason, you may have a tough time negotiating with buyers.

Know the Sellers’ Motivations

Knowing why someone is buying and what the most important wants are is very valuable in the process of negotiating. 

It isn’t always just about getting the lowest price. Sometimes buyers have a short turnaround time and need to find something quickly. Other times they may care more about how much they have to pay out of pocket initially. Some may want a long time till closing and some want to close as soon as possible. These are all things you can work with and negotiate to make both sides happy.

Getting this information is usually up to your agent. You can be sure your agent is getting these details simply by asking them to talk to the buyer’s agent.

Real Estate Negotiation Strategies

Of course, both sides involved in a property sale seek to get the best deal.

As the seller you want to get a fair, or better than fair, price for your home. Likewise, buyers want to get the property for the lowest price and best terms possible. 

To get a win-win real estate contract for both parties, you might need to use pricing negotiation strategies.

Sales Negotiation Strategies

  • Begin with a fair price because overpricing is very likely to drive interest away
  • Base your asking price on recent sales prices of similar properties in the area
  • Respect the priorities of the opposite party
  • Be ready to compromise in order to reach a win-win situation

Tips for Negotiating the Sale of Your Home

As a seller, you need to be well equipped with some useful tips for negotiation. Here are some tips to help you out:

  • Get your property inspected in order to understand exactly what you’re selling. Pay special attention to the state of your home’s structure, electrical and heating systems as well as any safety hazards that your buyers can encounter during the negotiation phase.
  • Get a real estate agent who has remarkable negotiation skills and allow them to take care of the process. Good realtors can emotionally detach themselves from your property in the course of negotiations and concentrate on getting an outcome.
  • Price ahead of the market. Speak with your realtor to familiarize yourself with local market trends, and what your property will be worth in the weeks to come. If you are aware of what market you’re currently negotiating in, you’ll have a better idea of how much negotiating power you have against your buyer.
  • Set a timeline and stick to it. To sell your home quickly, you can put a short expiration time on your counteroffer. This way, your buyer will be compelled to make a decision quicker.
  • Open your house for potential buyers. A home can only be sold if someone gets to see it, so let them. Accept requests for showings and hold open houses.

Real Estate Counter Offer Strategy for Sellers

Buyers generally submit an initial offer below the asking price. 

The seller then needs to consider the offer. Many will look at the midpoint between the buyer’s initial offer and their listing price to judge if it is acceptable or not. Sometimes the offer is so low it doesn’t even make sense to counter as you’ll never get to a point that makes both parties happy. In that scenario it is smart to just decline the offer.

If a buyer submits a fair offer you can simply accept or try for more. Again, depending on the market, either can be smart. Listen to your agent, they will help guide you in the right direction.

One popular real estate counter offer strategy suggests making a counter offer that is marginally lower than the original listing price. As a result, the sides will eventually negotiate to a middle meeting ground.

The same rules apply to other terms in the sale. Always know your breaking point and counter with concessions that will hopefully end above that point. 

If you can’t agree, walking away from the deal is always an option. If your home is in good shape and there are no major concerns, you can expect other offers.

How to Negotiate When Buying a Home

Buying a home can be an exciting time. There is a lot to plan and think about in the process. One thing that always requires thought is the amount of money you can dedicate to the home buying process. The good news is that there are ways to get these numbers to a place you feel comfortable with. Read on to find out the best ways to negotiate when you are buying a home.

What to Negotiate

Home price 

This is a pretty obvious one. Every home has a list or asking price. This is generally seen as a starting point. Buyers decide what they want to offer, this can be above, at, or below the asking price. That decision is made by looking at the market, comparable homes that have sold recently in the same area, any obvious problems with the property, among other things. We’ll expand on this later in the article.

Closing date

On average in the United States, it takes about 47 days to close on a home for all loan times. Since this is the average, it is very possible for that amount of time to be much shorter if there is incentive. Oftentimes a seller will want a quick close, this is something you can work with your lender on to make your offer more appealing. 


Before making an offer you will likely see the house multiple times. As you walk through and make note of things that need to be fixed and changed, you can work the cost of that into your offer and the following negotiation. 

Closing Costs

There are costs associated with closing on a home. These can range from around 3-6%. This pays for things like application fees, credit report checks, mortgage insurance, among other things. 

In a normal transaction, both buyers and sellers pay closing costs. During negotiations, you can ask sellers to pay all or a portion of yours. Additionally, you can offer to pay some or all of the sellers to make your offer more appealing.

Home Cleaning

Everyone wants to move into a spotless home. Many times this means hiring an outside company to professionally clean your new home. Since this comes with a cost, including who is responsible for that into the agreement can be part of the discussion.

Home Warranty

A home is a policy that can be purchased to cover the cost of repairing home utilities and appliances. Buyers can negotiate a year or so of home warranty coverage with the home seller as an add on incentive. 

How to Negotiate

Negotiating doesn’t come naturally to all of us. That’s okay. With a little preparation and a few tips, we’ll get you ready to go to bat with expert negotiators. Become a real estate negotiation expert by following these guidelines.

Find a Good Real Estate Agent

Agents have different approaches to doing their job. Some are overly aggressive and some take a backseat approach. Wherever they are on the spectrum, they have likely found what works for them. You need to decide what approach you prefer and find an agent that fits.

You also need to assess an agent’s professionalism, knowledge, and experience. All of this can influence whether or not you will be successful in negotiating. 

Taking time to do research on agents in your area and picking the best one for you will go a long way in your home buying process.

Have Solid Reasons Behind Your Asks

If you intend to offer well below asking, be prepared to justify that price. 

Of course, you have every right to offer whatever price you consider to be fair. Likewise, sellers have every right to be offended and deny your offer outright.

If you are able to give solid reasons for your lower position the seller may realize that many buyers will feel the same. If you can’t defend the offer, it’s unlikely you will get the property for the price you want.

Know the Sellers’ Motivations

Knowing why someone is selling and what the most important wants are is very valuable in the process of negotiating. 

It isn’t always just about getting the highest price. Sometimes sellers have a short turnaround time and need to sell quickly. Other times they may care more about the upfront money, like getting closing costs covered. Also possible is that they want to sell now but rent back for a few months. These are all things you can work into your offer and negotiations to make both sides happy.

Getting this information is usually up to your agent. You can be sure your agent is getting these details simply by asking them to talk to the seller’s agent.

Home Buying Negotiation Strategies

As we have already mentioned, the art of negotiation can be tough to master. 

If you’re not sure of your negotiation skills, you might be interested in these simple steps to successful negotiation:

Tips for Before You Buy

Sell before you buy

If you sell your home before you buy, get ready to buy quickly by doing all your research beforehand and having your mortgage pre-approved. 

Although it might sound risky, selling before you buy gives you a big benefit. It makes you ‘chain-free’, meaning you could buy the property a lot faster than others. 

Know factors that impact a property’s value

Negotiating buying a house, you need to keep in mind the key aspects which typically affect the value of a property:

  • The size, condition, and age of the house
  • The size of the garden
  • The house’s position: orientation, outlook, noise
  • Age of the neighborhood
  • School zone
  • Proximity to amenities

Compare mortgages and get pre-approved

Things can happen quickly in real estate and you want to be ready. Doing your research on leaders and mortgages will help you get a rate you can be happy with. It also prepares you to put in an offer as soon as you find that right home.

Remember that getting the best mortgage rate on the new home is part of real estate negotiations. Getting a mortgage agreed with your lender in principle will also give you more independence when you negotiate the price with a seller.

Real Estate Negotiation Tactics For Buyers

As a buyer, you need to make decisive financial decisions in the course of the negotiation process.

Here’s a list of real estate negotiation tips for buyers to strengthen your negotiating skills and help generate desirable results.

Ask For More Than You Want

Negotiations are back and forth. Rarely is the first offer accepted outright. Sometimes offers and concessions can move forward in inches until both parties are at a place they are comfortable with. So coming out with exactly what you want initially will likely end with the seller coming out on time.

Start by offering a little lower than your max or a little longer closing. Odds are you’ll end up in a better place when it all shakes out.

As alway, get to know the market. If it’s a seller’s market you may have to be more aggressive and concede to more just to be considered among the other offers.

Give Sellers Deadlines

It may seem that sellers have the control when it comes to timeframes and deadlines but buyers can use them to their advantage as well. 

When you make an offer or counter offer, giving the seller a deadline to respond can help get an answer. The seller doesn’t have to oblige and you may still want to keep your offer if they miss the deadline, but it lets them know you are serious. 

Even a deadline that has no real penalty if missed can put pressure on the other party.  

Share a Budget Cap

At some point in the negotiation it may help to let the seller know it is your best and final. Once the seller is aware that you can’t go any higher or concede on anything else they’ll have to make a yes or no decision. Walking away from a deal may seem scary enough for them to give in to your ask. 

Price Negotiation Strategy

You can’t expect to get the home of your dreams for an unreasonably low price, but a home price reduction strategy can help you. Using these strategies in real estate negotiations can help you buy the home you want for less than you think.

  • Consider property that has been on the market for a while, and the seller wants to move out soon.
  • Don’t let the seller know how much you love the home. If the seller or their agent sees that you’re very keen on buying the home, they know they have the upper hand and might assume that you’re ready to pay any price.
  • If there is an obvious but not critical drawback, like an outdated bathroom, don’t hesitate to politely point it out and give a hint that it can be reflected in your offer.
  • Keep an open mind. Cosmetic changes can be easy. Changing school districts can be harder.
  • Know when it is a wise decision to walk away. Negotiation strategy is all about healthy decisions, no matter the type of negotiations.
  • Finally, remember that getting the best mortgage rate is also part of negotiating the best price. This can have a big impact on your monthly payment.

Tips for Negotiating in Person

Many negotiations are done over the phone or email. Sometimes these conversations are had in person. If this happens to you, a few tips can help make the process a lot smoother. Check out these Real Estate Negotiation tips when negotiating in person:

  • Take a positive attitude. Make the other side feel welcome and appreciated.
  • Pay attention to your body language. Don’t sit at the negotiation table with your arms and legs crossed. A better option is to have an open posture and a smile on your face.
  • Find common ground. For this, make up a list of items that both parties can agree on before the negotiation process starts. Next, focus on resolving the other issues that need to be settled. If the other side doesn’t agree with the options you offer, provide them with alternative options strengthened with solid evidence.
  • Try not to get emotionally attached to the deal: engage with the facts of the real estate transactions instead of your emotional investment.
  • End the negotiations on a good note, even in case of a bad deal. Shake hands and thank each side for their participation.

What is Not a Smart Way to Negotiate?

One of the worst things you can do is take yourself out of the running before the race has even started. You do this when you make an offer that is well out of the range of what was asked for. Sellers can get offended or think you aren’t serious. 

If you want to have a successful negotiation in real estate you will need to think about how you would react if you were on the other side. 


While buying a home may seem simple enough, there are a lot of steps and a lot of money involved. The key is really knowing what you are getting into and having the right people to help you along the way. 
Navigating the real estate market can be tough but these tips will help you make it out with a deal you can feel good about. Making the right decision for you and your family is important. If you have questions about home buying and your options, reach out to one of our agents, they would love to help you.

Steph Matarazzo FastExpert Inc

Steph is the Marketing Director at FastExpert and has been working in the real estate data and research world for over three years. She is passionate about educating people on the real estate market and Excel spreadsheets. She lives on the East Coast with her family and recently purchased her own home.

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