Negotiating Tips For Sellers
Okay, all your efforts have paid off and you’ve received an offer to purchase your home. What do you do next? If the offer is for full price, proceed to “Go” and collect $200. But the offer you’ve received is probably below your asking price, perhaps far below. How do you work out a price that will be acceptable to both you and the buyer? The first step is to discuss the offer with your agent. They will be able to offer helpful insights to guide you through the negotiating process. Let’s examine some possible scenarios.
If the offer is ridiculously low, you may counter with a discount of 2% or so. I’d generally not counter at full price, as this may drive away someone who was just checking to see how low you might go. A counter at nearly full price let’s the buyer know that you’re willing to negotiate, but not stupid. If the buyer walks away, they were never serious anyway.
If, however, the offer is within 10% of asking price, try countering at approximately 97% of asking price and check to see if there are certain conditions or incentives that you can concede to make your offer more attractive. Perhaps the buyer needs the home within a short time frame; if it’s possible for you to move within such a short time, offer to do so. Or the buyer may want you to make certain repairs, or improvements; if it’s possible to do so, and you fully understand the cost, you may be able to reach common ground.
Remember, everything is negotiable. Stay involved, stay on top of the process, and be aware of subtle hints that buyers sometimes offer that can help you during negotiations.
The most important tip I can offer is to maintain your objectivity. It’s easy for both buyers and sellers to get wrapped up in their emotions during the process, a mistake that often robs both of reason.
FIVE NEGOTIATING DON’TS
- Don’t automatically reject an unreasonably low offer. Potential buyers may be turned off by your response and just walk away, and they may have been “fishing” to see if you’d bite. Once they discover you understand the true value of your home, they may return and counter with a serious offer. If you have educated yourself about pricing, you’ll know what your home is worth and should expect to receive somewhere in that range. Your counter offer should be slightly below your asking price, perhaps 3%, and just above the price you’re willing to accept. Remember, you’re not just negotiating on the price, there may be other stipulations that you can use to entice the buyer to pay a higher price. Look for those stipulations that seem to be more important to the seller than to you.
- Don’t expect everything in your offer to be accepted. You will have to compromise. Buyers expect sellers to ask for more than they are willing to accept. But, remain firm on everything that is important to you.
- Don’t say, “Take it or leave it.” Even if you really want to tell them to “get lost,” play your cards close to your vest. You might change your mind; don’t close the door until you know the buyer isn’t returning.
- Never let the buyer’s agent know what you are willing to do. Discuss your position with your agent only; and it’s sometimes helpful not to share all the facts with them. Your agent works for you, but the ultimate decisions will be solely made by you and your family.
- Don’t sign an offer unless it contains all the specifics you have agreed upon. If there are verbal commitments or stipulations, make certain they are included in the contract. Remember the two rules of verbal agreements. “They aren’t worth the paper their written on.” and, “If it isn’t in writing, it isn’t.”
Once the offer process has begun, keep your cool. Don’t panic if a response doesn’t come as quickly as expected. The buyer may need time to reevaluate their finances or to discuss your offer with family or friends. Don’t push them for a quick answer; your counter offer should provide a reasonable time frame for acceptance. Allow the buyer to use as much of it as they need. Always show respect for the buyer by being courteous, patient, and polite.
Finally, if there are serious differences between you and the buyer, don’t be afraid to terminate the negotiations. If it appears that the chasm between you and the buyer cannot be bridged, discuss the situation with your agent, but begin looking for the next prospect. Not every offer will be a great one, and not every offer will result in a signed contract. Selling your home is a sometimes difficult process; be flexible, reasonable, and fair; and you’ll ultimately wind up at the closing table.