Best examples of negotiations for real estate agents

Published On: 20/03/2025

Negotiation is a core skill that separates average real estate agents from top performers. The ability to secure the best deal for your client—whether a buyer or seller—requires a combination of market knowledge, communication skills, and strategic thinking. In this article, we will explore two of the best examples of negotiations for real estate agents: one from the buyer's side and one from the seller's side. These examples will illustrate how effective negotiation tactics can be used to achieve favorable outcomes for clients.

Example 1: Negotiating on Behalf of a Buyer

Scenario: A Competitive Market with Multiple Offers

John, a real estate agent, is representing a young couple, Alex and Sarah, who are looking to buy their first home. They have found a property they love, but it is in a highly competitive market where multiple offers are expected. The listed price is $500,000, but the sellers have already received several offers above the asking price.

Challenges:

The property has multiple offers.
The couple has a budget and cannot exceed it significantly.
The seller prefers a quick closing.
Other buyers are offering above-asking price.

Negotiation Strategy:

Building Rapport with the Listing Agent – Before submitting an offer, John contacts the listing agent to build a rapport and gather insights. He asks about the seller’s priorities beyond price. The listing agent reveals that the seller is moving out of state and prefers a fast, hassle-free closing with minimal contingencies.
Making an Appealing Offer Beyond Price – Understanding that the seller values a quick closing, John crafts an offer with a 30-day closing period instead of the standard 45 days. Additionally, he advises his clients to include a larger earnest money deposit ($15,000 instead of $10,000) to show financial commitment.
Strategic Use of an Escalation Clause – Since multiple offers are on the table, John includes an escalation clause stating that his clients will automatically increase their bid by $2,000 above the highest competing offer, up to a maximum of $515,000. This ensures they remain competitive without grossly overpaying.
Minimizing Contingencies – While keeping the home inspection contingency in place to protect his clients, John suggests shortening the inspection period from 14 days to 7 days to make the offer more attractive.
Personal Touch with a Buyer’s Letter – To further appeal to the seller’s emotions, John helps Alex and Sarah draft a heartfelt letter explaining why they love the home and how they envision building their family there. This personal touch often resonates with sellers.

Outcome:

Despite competing offers, the seller accepts Alex and Sarah’s offer at $512,000 because of the quick closing, strong financial commitment, and emotional connection. John’s strategic approach ensures his clients secure their dream home without overextending their budget.

Example 2: Negotiating on Behalf of a Seller

Scenario: Selling a Home in a Buyer’s Market

Emma, a real estate agent, is representing a client, Mark, who is selling his home in a market where buyers have the upper hand. The home is listed at $650,000, but after four weeks on the market, interest has been low. A potential buyer, Brian, submits an offer for $620,000—$30,000 below the asking price.

Challenges:

The market favors buyers, leading to lower offers.
The home has been on the market for a while, making buyers expect price reductions.
The seller wants to maximize profits without scaring off serious buyers.

Negotiation Strategy:

Counteroffer with Justification – Instead of rejecting the $620,000 offer outright, Emma counters at $640,000. She provides a comparative market analysis (CMA) showing similar homes that have sold in the $640,000–$650,000 range, justifying the price.
Adding Value Instead of Lowering Price – Knowing that buyers in a slow market look for deals, Emma offers to include high-end appliances and a home warranty (worth $5,000) rather than reducing the price significantly. This makes the offer more attractive without compromising the seller’s bottom line.
Creating a Sense of Urgency – To push Brian to act quickly, Emma informs him that another potential buyer has expressed interest and may submit an offer soon. This tactic encourages Brian to finalize his decision instead of delaying negotiations.
Negotiating Closing Costs – To make the deal appealing, Emma negotiates that Mark will cover $5,000 in closing costs instead of reducing the price further. This makes the buyer feel like they are getting a better deal while keeping the sale price higher.
Offering Flexible Move-Out Terms – Since Mark is in no rush to move, Emma includes an option for rent-back for 30 days after closing, allowing the buyer more flexibility in their moving timeline. This small incentive further sweetens the deal for Brian.

Outcome:

Brian accepts the counteroffer at $638,000 with the added benefits. By leveraging strategic negotiation tactics, Emma helps her client achieve a sale close to the original asking price while keeping both parties satisfied.

Example 3: Negotiating for a First-Time Homebuyer in a Tough Market

Scenario: A Tight Budget and a High-Demand Area

Lisa, a real estate agent, is working with a first-time homebuyer, Michael, who has a limited budget of $350,000. He has found a house listed at $370,000 in a desirable neighborhood but cannot afford to go much higher. Other interested buyers have already scheduled showings, making the situation more competitive.

Challenges:

The home is priced above Michael’s budget.
There is competition from other buyers.
The seller is hesitant to negotiate below asking price.

Negotiation Strategy:

Highlighting the Buyer’s Strengths – Lisa communicates to the listing agent that Michael is a pre-approved buyer with solid financing. She also emphasizes his willingness to accommodate the seller’s preferred closing timeline.
Offering a Higher Earnest Money Deposit – To show financial commitment, Lisa suggests Michael offer a $10,000 earnest money deposit instead of the standard $5,000, making his bid look more serious.
Strategic Price Reduction Offer – Instead of making a lowball offer, Lisa advises Michael to offer $355,000 while waiving minor contingencies, such as requesting cosmetic repairs. This strikes a balance between affordability and appeal to the seller.
Appealing to the Seller’s Needs – Through research, Lisa discovers the seller is downsizing and concerned about moving logistics. She includes an offer for Michael to cover some of the seller’s moving costs (up to $2,000), making the deal more attractive.
Quick Inspection and Closing Flexibility – To further entice the seller, Lisa shortens the inspection period from 14 to 7 days and provides a flexible 30-day closing period, accommodating the seller’s timeline.

Outcome:

The seller initially hesitates but ultimately accepts Michael’s offer of $355,000, appreciating the flexible terms and additional support. By focusing on non-monetary advantages, Lisa secures the home for Michael within his budget despite a competitive market.

Example 4: Selling a Luxury Home During a Market Downturn

Scenario: A High-Value Property with Few Buyers

Jason, a real estate agent, is helping his client, Rachel, sell a luxury home listed at $1.8 million. However, the market is slowing down, and comparable properties in the area are sitting unsold for months. A potential buyer, David, submits an offer for $1.65 million—well below Rachel’s expectations.

Challenges:

Luxury homes have fewer buyers in a slow market.
The buyer’s offer is significantly lower than the listing price.
Rachel wants to sell but doesn’t want to compromise too much on price.

Negotiation Strategy:

Framing a Strong Counteroffer – Jason counters at $1.75 million, justifying the price with a comparative market analysis (CMA) and pointing out the home’s unique features, such as high-end finishes and a prime location.
Adding Premium Incentives – To make the counteroffer more attractive without reducing the price further, Jason negotiates to include high-end furnishings valued at $20,000 and a home automation system as part of the deal.
Flexible Financing and Closing Terms – The buyer, David, is hesitant due to current interest rates. Jason suggests that Rachel offer a seller credit of $10,000 toward closing costs to ease the buyer’s financial burden while keeping the sale price higher.
Leveraging a Competitive Mindset – Jason informs David’s agent that another potential buyer has shown interest in scheduling a second viewing. This subtle psychological pressure encourages David to act quickly rather than risk losing the home.
Post-Sale Leaseback Option – Since Rachel has not yet secured a new home, Jason negotiates a post-sale leaseback agreement, allowing Rachel to remain in the home for 30 days after closing. This makes the deal more convenient for the seller while assuring the buyer that the purchase will go through smoothly.

Outcome:

After some back-and-forth, David agrees to $1.72 million, with Rachel including the high-end furnishings and covering a portion of closing costs. The deal closes successfully, maximizing value for both parties despite a challenging market.

Example 5: Negotiating for a First-Time Homebuyer in a Tough Market

Scenario: A Tight Budget and a High-Demand Area

Challenges:

The home is priced above Michael’s budget.
There is competition from other buyers.
The seller is hesitant to negotiate below asking price.

Negotiation Strategy:

Highlighting the Buyer’s Strengths – Lisa communicates to the listing agent that Michael is a pre-approved buyer with solid financing. She also emphasizes his willingness to accommodate the seller’s preferred closing timeline.
Offering a Higher Earnest Money Deposit – To show financial commitment, Lisa suggests Michael offer a $10,000 earnest money deposit instead of the standard $5,000, making his bid look more serious.
Strategic Price Reduction Offer – Instead of making a lowball offer, Lisa advises Michael to offer $355,000 while waiving minor contingencies, such as requesting cosmetic repairs. This strikes a balance between affordability and appeal to the seller.
Appealing to the Seller’s Needs – Through research, Lisa discovers the seller is downsizing and concerned about moving logistics. She includes an offer for Michael to cover some of the seller’s moving costs (up to $2,000), making the deal more attractive.
Quick Inspection and Closing Flexibility – To further entice the seller, Lisa shortens the inspection period from 14 to 7 days and provides a flexible 30-day closing period, accommodating the seller’s timeline.

Outcome:

Example 6: Selling a Luxury Home During a Market Downturn

Scenario: A High-Value Property with Few Buyers

Challenges:

Luxury homes have fewer buyers in a slow market.
The buyer’s offer is significantly lower than the listing price.
Rachel wants to sell but doesn’t want to compromise too much on price.

Negotiation Strategy:

Framing a Strong Counteroffer – Jason counters at $1.75 million, justifying the price with a comparative market analysis (CMA) and pointing out the home’s unique features, such as high-end finishes and a prime location.
Adding Premium Incentives – To make the counteroffer more attractive without reducing the price further, Jason negotiates to include high-end furnishings valued at $20,000 and a home automation system as part of the deal.
Flexible Financing and Closing Terms – The buyer, David, is hesitant due to current interest rates. Jason suggests that Rachel offer a seller credit of $10,000 toward closing costs to ease the buyer’s financial burden while keeping the sale price higher.
Leveraging a Competitive Mindset – Jason informs David’s agent that another potential buyer has shown interest in scheduling a second viewing. This subtle psychological pressure encourages David to act quickly rather than risk losing the home.
Post-Sale Leaseback Option – Since Rachel has not yet secured a new home, Jason negotiates a post-sale leaseback agreement, allowing Rachel to remain in the home for 30 days after closing. This makes the deal more convenient for the seller while assuring the buyer that the purchase will go through smoothly.

Outcome:

Conclusion

These two real estate negotiation examples highlight the importance of understanding client needs, market conditions, and creative deal structuring. Whether representing a buyer or a seller, top agents like John and Emma succeed by prioritizing their clients' goals, leveraging data, and incorporating strategic incentives. Mastering these skills enables real estate professionals to consistently secure favorable deals, ensuring satisfied clients and continued business success.