When selling your home, the transaction is seldom as simple as asking for and receiving the listed price. More often than not, there’s a lot of back and forth before both parties are satisfied. Like a chess player, the seller must develop a winning strategy in what is likely to become a turn-based game of negotiation.
Unfortunately, we’re not all gifted negotiators and it can be difficult to know how best to approach what may be the largest transaction of your life. With a few tricks up your sleeve however, you’ll be more able to stand your ground and get the best price for your home. Read on to see how.
Set a Fair, Honest Listing Price
As a seller, your strongest position in a negotiation is to know as much about your property as possible, and to disclose this information in the listing. Knowing and being completely honest about the state of your home prevents nasty surprises that can damage your negotiating power.
It’s well worth having a pre-listing home inspection carried out on your home. Doing so will give you time to address any major repairs, or factor them into your final listing price. Whether you fix the necessary issues, or reduce your price, the information should be detailed in your listing, providing buyers with the full picture.
All in all, this will speed up the sales process and prevent any issues you were unaware of from scaring potential buyers away. With all the facts laid bare, you’re also more likely to attract serious bidders, who will scrutinize each detail before deciding if a property is worth their time or not.
Do Your Homework
While it might be tempting to set the highest price you think you can get away with, it’s better to value your home properly, taking into account factors such as location, property size and condition, and how much similar homes in the area have sold for recently. A good real estate agent will be able to help you set the right price for your home, ensuring buyers aren’t put off by an unreasonable price tag, while allowing you to sell as close to your listing price as possible. The agent will also make sure you understand all the terms and jargon involved in the process of selling.
Reviewing an Offer and Making a Counteroffer
When you receive an offer on your home, take a good look over it. You should have in your mind a minimum price you’d agree to sell your home for. Of course, if you’re happy with the terms of the offer, you can accept it straight away. If certain aspects of it are not favourable, however, or if you’re not trying to sell your home fast, you can make a counteroffer.
Typical reasons for making a counteroffer include: the offer price is too low, the proposed closing date is too soon or too far away, or the potential buyer wants you to help cover the closing costs. When you submit a counter offer, be sure the details are all correct as this will become a legally binding contract if accepted.
Take care to also note that while you have a counteroffer on the table, you are committed to it until the other party communicates their decision. As such, you cannot accept any new offers that may come in. Fortunately, you can retract a counteroffer any time before the other party has replied to it. It’s essential you do this first in writing, clearly noting the time and date, otherwise the buyer may claim to have already sent their acceptance of the contract, after which it will be difficult to get out of it.
It’s worth bearing in mind that most buyers expect a little back and forth action. They will typically offer lower than your listing price, but also lower than the top price they’re willing to pay. A common strategy involves making a counteroffer at a lower price than your listing price, but higher than their offer.
While this works, you can do better, especially if you’ve priced your home fairly and are confident of its value. Try making a counteroffer at your list price, or just a small amount underneath. This will filter out those who are more interested in a bargain than in your property and will show buyers that you know the value of your home. Another tactic is to reduce the expiry date of your counteroffer to one day, meaning the potential buyer will have to respond quickly or risk missing out.
Timing is crucial; if you’ve just listed your home and you’re confident there’s a seller’s market, that’s a good time to play hardball. If your home has been on the market for several weeks, however, perhaps another tactic will work better.
Rejecting an Offer
Some sellers will reject a low offer rather than counter it. This leaves them open to accepting any new offers that may come along in the meantime. Rejecting a low offer may not deter an eager buyer, but it can show a lack of flexibility. On the other hand, you prove that you’re confident about the value of your home, making it more desirable for those that aren’t just looking for a bargain.
To reject an offer, you can simply allow it to expire, but common courtesy dictates that it’s good to at least send an email.
How you negotiate a real estate transaction is largely dependent on your knowledge of the market. Being clued-up on the latest local figures, as well as all the details regarding your home, puts you in a strong position to negotiate the best price for your home. If you manage to avoid some of the most common selling mistakes, the deal could be a win-win!