Savvy Negotiation: How to Sell Your Home in a Buyer’s Market
The good news is that home sales have picked up since a summertime filled with hot days and lemonade afternoons. The not-so-great news is that buyers still have the edge when it comes to negotiating. Higher home supplies and economic pressures are still on their side.
Sellers who are determined to hold fast on their price, or at least give up less, need to be savvy negotiators. Do these 5 things to keep your side of the transaction as high as possible:
1. Be a CEO. Business people often make great deals when it comes to their business but lousy ones in their personal lives. Like a great CEO, try to stick to the numbers and keep emotions out of the transaction as much as possible.
According to Mark Weber, Broker & Owner of White Sands Realty in Naples, Florida, “Do not blame the new buyers because you paid more for the home in a different market at at different point-in-time or that you could have gotten twice as much if you had sold it to an interested party a year ago. The buyers could be in the same boat with their last purchase. Treat the transaction like a business deal and you’ll be better poised to negotiate to your advantage.”
2. Stay Open. Always counter an offer. According to Mr. Weber, “even if you know buyers are bottom fishing or “low-balling” you, make a signed counter offer anyway.” Keep in mind that compromise is the purpose of negotiation and that that purpose can’t be served if you just say “no.”
3. Review the Market. When an offer comes in the door, have your Realtor check the negotiating to find out whether any more homes have sold or gone pending. Market direction will most likely drive negotiations. If you know what’s going on, you’ll be in the drivers’ seat when it comes to getting the most for your home.
4. Stay at Arm’s Length. Appraisers and banks know that arm’s length transactions are the best indication of market value because their isn’t a lot of room for monkey business. An arm’s length transaction can be defined as a transaction in which the buyer and seller of a property act independently and have no relationship to each other. A sale to your brother or sister would not be an arm’s length transaction.
Mr. Weber asks his sellers and buyers to abide by arm’s length rule when negotiating all Naples Florida real estate transactions, “keep the sale of your home at arm’s length at all times to get the most the market will bear. Use buyer and seller Realtors as go-betweens for offers and counteroffers. Do not contact – I repeat, do not contact – the buyer directly or have them over for tea. This never works to your advantage. Even if you do come to a monetary deal, keep the transaction arm’s length until it’s closed and the buyer has taken possession. I’ve seen issues arise during inspections and even final walk-throughs that have made the best of buddies turn into sworn enemies.”
5. Ink is Your Friend. Do not get lazy (or let your Realtor get lazy) because you’re busy and can’t fax back the initialed counter, counter, counter offer. Turning a written offer into a verbal offer is never a good idea. Most offers take more than three times going back and forth these days to get a signed contract. Draw a line through the offer price and initial and date all changes clearly. Remember that you only have a deal when the last person has initialed the last change. At that point there should also be consideration (a deposit) in escrow or at least a wire on the way/check in hand.
Thanks for the great information on this website, I’ll be back!
Interesting explanation…There have been a number of sellers that are disappointed they didn’t sell earlier as they were holding out for a better offer. When factoring in the continued costs of keeping the property longer, it only decreased their final net.
What you have to really ask yourself is “what would I pay for this house (your house) in this market”? Not last year’s or the year before that. See what your neighbors have their houses on the market for.
If you are slightly higher than others, there has to be a compelling reason why yours is better. Otherwise you are just helping to sell your neighbors house!