Whether you’re a buyer or a seller, you’ll want your deal to be fair and equitable. To accomplish this, you must prepare to list your home or begin your homebuying search. Understanding the current market conditions and who your competition is will impact your negotiating power and will likely hinge on these trends.

Use these ten tips to help you navigate the negotiation process successfully and get the real estate deal that works for you.

Negotiating as a buyer

1. Know the home’s sales history.
   As you begin your home search, refer to the CMA to see how many days the home you are interested in has been on the market. Then, compare this number to other houses in the neighborhood—ones still for sale and those that have sold over the past six months. Generally, if the home has been listed for more than thirty days, you may be able to negotiate more aggressively. Also, your real estate agent can provide you with the home’s previous purchase prices, list-to-sale ratios, and time on the market.

2. Negotiate home inspection requests.
   Once the home inspection has been completed, this is the time to request the seller make necessary repairs or replacements. You could also request a price reduction or a credit at closing to cover the costs. The deal can get a bit sticky and fall through if negotiations are not handled properly. However, market conditions will likely dictate how both buyer and seller come to an agreement.

3. Avoid giving a lowball offer.
   Although you may think putting in a lowball offer is a good starting point, especially if it’s a buyer’s market, you can lose all negotiating power. Why? Because the seller may feel highly insulted. If the price is too far off, they may not even counteroffer, putting you at a disadvantage in the negotiations.

Negotiating as a seller

4. Obtain a Comparative Market Analysis (CMA).
   Before listing your home or submitting an offer, your real estate agent should provide you with a CMA. This comprehensive document offers valuable information about a neighborhood’s sales activity from the previous six months. It compares similar homes in the area: by square footage, lot size, style, age, location, initial listing price, selling price, and number of days on the market. The CMA can set the barometer for deciding the listing price and serve as an entry point for the buyer’s offer, which can ultimately help during the negotiation process.

5. Analyze list-price-to-sales price ratios.
   Once your agent has provided you with a CMA, take the time to analyze it in percentages. For example, if a home was listed for $350,000 and sold for $325,000, this means it sold for 7 percent below the asking price. Conversely, if it were listed at $325,000 and sold for $375,000, the seller would have received 15 percent above the asking price. Looking at these numbers in percentages may make it easier to detect trends to help you make or accept an offer.

Negotiating as a buyer or seller

6. Determine the market temperature.
   Many sellers list their homes higher than the current market value to leave extra room for negotiation. However, doing so can also backfire on them as a strong seller’s market generally drives this tactic; in a buyer’s market, the buyer holds more power and is often a reasonable price due to higher inventory levels and reduced competition. Conversely, if trends point toward a seller’s market, you may choose not to negotiate on the terms and price. And in a balanced real estate market—when supply and demand are the same—it may be easier to negotiate, especially if both parties have reasonable expectations.

7. Work with a seasoned agent.
   Deciding the final price will be up to you (regardless of whether you’re the buyer or seller), but a seasoned agent can provide you with the necessary tools to achieve that successful negotiation. As a result, and regardless of the market trends, working with an agent who is adept at guiding buyers and sellers through the negotiation process is highly advisable.

8. Reduce the number of contract contingencies.
   A sales agreement typically has several contingency clauses, such as financing, mortgage, title insurance, appraisal, and home inspection. In a seller’s market, a buyer may opt to remove one of these clauses as a negotiating tactic. However, this can be risky, so lean on your real estate agent and lender for the best advice.

9. Negotiate in good faith.
   Be open to healthy negotiations and always negotiate in good faith. As you start the process, decide what’s most important to you and be prepared for counteroffers. It’s okay to be a firm negotiator but try to be as fair as possible. And by having a CMA at your fingertips, you can back up your reasons for your offer.

10. Negotiate on miscellaneous items.
    There may be additional items you’d be willing to negotiate or allow for some concessions on as an act of goodwill. This can include appliances, a dining room chandelier or other lighting fixtures, draperies, patio furniture, pool equipment, planters, ceiling fans, or a game table or swing set that would be difficult to move.