The golden rule of negotiation is to remember there are people and emotion involved when negotiating real estate transactions. There are times for hard nosed negotiation and other times where a little bit of compassion works best for everyone - know your situation!
I've recently been running into more and more transactions in the Park City area where the buyers or seller's don't care what the other side thinks about their offer. For some peoples real estate transactions it's strictly about numbers but I'm estimating that is for less than 5% of transactions in todays market.
Buyer - As a buyer you should remember that the sellers loved their home and in most cases they have made many good memories and sentimental attachment. There are times that a grain of salt and a bit of sympathy goes a long ways in negotiations. If you want to make a low ball offer, even if the property is priced way too high and warrants a low offer, the offer needs to be justified. Have your agent help soften the blow with a letter on why you want to purchase the property but you are not willing to over pay and show relevant properties to illustrate how you arrived at your offer price.
Seller - As a seller please realize that buyers have taken their time to do some due diligence and write up an offer - they want to buy your property if they are submitting an offer. There are some buyers that are investors and write up several offers each week looking for an opportunity to buy below market rate but that's not most buyers in today's market. If you respond to a fully written offer verbally or by sending an email a day or two late it could upset the buyer and they could feel like you don't even want to sell or worse they could feel disrespected.
Agents - As a professional you need to get your buyers or sellers to respond to an offer in writing and if time limits are manageable make sure you get the offer back to the other party before the offer expires. I recently submitted a contract on a property in Park City to a listing agent and the listing agent did not communicate until the contract had nearly expired. The seller responded with a counter-offer a few thousand dollars off of list price and it was two days late. This action caused the buyer to feel as if the seller was not taking him serious he demanded we barely increase our offer price even though he was willing to pay more. Ultimately, the seller was willing to sell it for less than what the buyer was willing to pay, but the buyer was so upset with the seller and his agent that there was no brining the buyer back to the table to negotiate. The lack of upfront due diligence and poor communication by the seller and his agent cost the sell. Now the buyer will move on to purchase another property and the seller could be sitting on his property for months. Remember big egos can come with big transactions but if the lines of communication are opened transaction usually takes place.