Last week, my wife and I bought a house near Boston. The negotiations lasted a week, then ended badly.
Let's talk mistakes.
1) Not negotiating. Ever wonder whether something's negotiable?
The higher the price, the more wiggle room. Houses and cars are negotiable; your dry cleaning bill isn't (unless the job got botched).
That leaves a lot in-between.
Consider hotel rooms. The rates must be negotiable; no two people ever pay the same thing, and no one ever pays the price that's listed on the door of their room.
Why not ask, "Is there any flexibility?"
That's a good negotiating question for lots of ambiguous situations. Flexibility sounds like a virtue.
Who doesn't want to be flexible?
But with houses, you assume flexibility. No one takes the asking price literally.
The house we bought was priced at X.
I wish I could tell you more about X, but I can't because X is a ridiculous number, unless you live in a place like Boston where everyone is insanely convinced that a price like X is a steal.
Actually, the price was X + $34,900. The $34,900 part seemed negotiable. We bid X minus $35,000.
That allowed the seller to say, "Let's just split the difference."
Unfortunately, the seller must have had a different script; he only lowered his price by $1,000.
Our plan wasn't going well.
2) No reservation price. Your reservation price is your limit. If you're buying a house, it's the most you'll spend; if selling, it's the least you'll accept.