Negotiating the Sale of Your Home
Negotiations really begin when you list the house for sale. Information you tell the agent could easily be conveyed to potential buyers, either directly or through other agents. So be careful what you say. Your agent won't deliberately try to harm you, but people talk and things slip out.
If you let it be known that you are an anxious, motivated seller, offers are apt to be lower. So, unless you're in such a hurry that you want the market to know that you will entertain all offers, be quiet about your circumstances.
When the house is shown it is best for you to be absent, or at least not available for conversation. If the agent comes looking for you to answer a question, do be helpful, but don't stick around and get drawn into a conversation about price and/or your motivation. You could say something you'll be sorry for.
When the offer is presented…
You've set a realistic price on your home for sale, yet the first offer comes in well below what you're asking. How should you handle it?
First - don't get mad! You may feel insulted or think the prospective buyers are trying to take advantage of you. They could be. But still, the best plan is to banish those thoughts!
Instead, put yourself in the buyer's shoes. If you were them, wouldn't you try for a lower price? Tradition almost demands that buyers negotiate the price of real estate and motor vehicles. Paying the "sticker price" is tantamount to not playing by the rules. You may have even listed your home for sale at a slightly higher price to allow for this part of the "game."
Then, realize that in addition to tradition, there could be other reasons why the buyers have come in with a low offer. Those could include:
- I love this house, but I only qualify for $X. I want it and if I don't try I won't get it. The worst that can happen is they'll say no.
- I love this house, but I know that if I lock into a payment over $X I could get myself into a financial bind.
- I love this house, but I see some repairs I'll have to make and I need to hold back some money for them.
- I like this house slightly more than another at a lower price. I'll see if I can get this one for the same price.
Assume that people aren't trying to insult you or take advantage of you. Assume that they are merely protecting their best interests… just as you are. That attitude will make it much easier for you to negotiate pleasantly.
Be calm and consider the offer before you answer. Your next steps have to be determined by your own circumstances and the condition of the market. If you're in a hurry to get moving and the market is slow your decision should be far different than when you're in no hurry and houses are selling quickly.
Read the offer to see if the buyers are offering any other kind of concessions that could be of value to you. This could include an offer to let you remain in the home for a period of time after closing. If they're offering something in trade, consider its value to you. You may really want their used motor home! (But check Blue Book prices and have a good mechanic verify its condition.)
Next, confer with your agent to see if market conditions have changed since you listed your home for sale. This can and does happen! Then determine your absolute bottom line.
Sometimes, when an offer is far below asking, you can get the buyers to negotiate with themselves. This is done by not really responding, but instead telling your agent that you don't know how to respond because it is so low. Say something like "See if they can't do better than this."
When you do respond to an offer, go only halfway from your asking price to your bottom line. Then, if there are subsequent counter-offers, make each concession smaller than the last. This conveys the clear message that you aren't suddenly going to cave in and grant a huge reduction.
Try to avoid using the words "Final counter-offer." There's something about that phrase that sounds combative and puts others into a non-cooperative frame of mind. Instead, make your final counter-offer and say no more. The buyers might agree to it. If they don't, but instead submit yet another counter, simply respond with the same offer again.
Negotiating well can result in both you and your buyers being satisfied that the transaction was fair.
REAL ESTATE FOR SALE
East Tennessee & SW Virginia
(423) 360-2071 Cell
(423) 538-4353 Home
(423) 217-0346 Office
(423) 764-3637 Fax
701 Bluff City Highway
Bristol, Tennessee 37620