As mentioned previously, making sure you have the right price for your home is absolutely essential. It will give you the confidence you need to ensure the step we discuss today – how to negotiate as a seller – is a success.
PAY ATTENTION AND KNOW YOUR ADVANTAGE
You need to be active as a seller and read the market for your home. Look at the number of showing requests you’re getting and recognizing how much demand there truly is for your property.
Remember that you have more information than the buyer. Buyers are working with a black box – they only know what they’ve seen. They don’t know how many other people have seen your property or the level of interest (counting business cards dropped on the kitchen counter isn’t all that reliable).
It’s crucial for you to use this informational edge. If you have not seen a lot of interest and a buyer comes along, negotiate in a manner that will keep the buyer’s attention, rather than scaring them off. Conversely, if you have noticed a lot of interest in your property, it’s less risky to negotiate more aggressively.
FOCUS ON THE WAR, NOT THE SKIRMISH
On any first sign back (counter offer), try to eliminate all the small things quickly get rid of all items aside from the price. You may need to make a concession or find common ground on the closing date, deposit, or other considerations to maintain momentum and get down to negotiating one thing at a time. Spending too much time on nitty gritty details will end up emotionally draining both sides of the deal, and could make way for a complete breakdown. It’s difficult for people to juggle multiple items in a negotiation. So get down to just the one thing that matters most: price. At the end of the day, if you end up needing to carry the mortgage for an extra month in order to meet the buyers’ terms for closing date, just do it and account for that amount with the price you negotiate.
USE YOUR BEST PITCH
If your information suggests that you’re negotiating with the only buyer you’ll see for a while, you need to deal with them and be more aggressive with your price. The buyer may offer a price that doesn’t come close to your expectations. Stay calm and don’t get emotional. At the very least, you should sign back (conter offer) at a price just slightly less than the listing price .If you counter at a full listing price, you risk burning a bridge and losing the buyer for good vs leaving the door open for a buyer to come to terms with the price.
As you work your way through the negotiation process, gather more information if you can. Who’s the buyer? Is this their first purchase? What’s their occupation? Can you anticipate how they prefer to negotiate? Do they own other properties? You can then tailor your approach going forward. If it’s a buyer who has purchased five other properties in the past, you could likely cut to the chase and avoid the back and forth.
Avoid using complete, closed-door ultimatums.
FIND THE CAPACITY TO CLOSE
All most sellers really care about is their ability to fulfil their promise to show up on the closing date with all the money. If you’re picking between two buyers with similar offers, find the one you feel has a stronger capacity to close. A strong deposit, firm offer, bank draft in hand, and quick closing are all positive signs.
DON’T LOOK BACK
Once you have closed your deal and agreed on a fair price, don’t look back. It’s so easy to have seller’s remorse. You can always ask, “Did I sell it for the most money I could have?” The bottom line is that time moves forward, and the market is constantly changing. Your deal is now done, and the market is not the same as it was when you sold it yesterday, last week, last month, or last year. Your motive when you listed your home was to get as much money as possible within a reasonable amount of time.
If you have sold your property with conditions, a buyer might attempt to re-negotiate on a surprise found in a home inspection. If it truly is a surprise, that’s one thing. Be transparent about what you’re selling. It’s difficult for a buyer to demand a price reduction for a furnace that will need to be replaced in two years if you presented the facts when selling it. This is why it’s foolhardy for sellers to try to hide problems – you may end up shooting yourself in the foot. You cannot hide defects as a seller. So either disclose them, or bite the bullet and pay for repairs before you list so you can manage how much they cost you.
If you have some questions, you might be able to find answers here (5 common questions from sellers).
If you have any further questions or want to learn more tips, email us at email@example.com or call us at 416.222.1212.