7 Elite Agent Real Estate Negotiation Tips for Sellers
Are you considering listing your home on the market? Maybe you already took the plunge, and one of your biggest investments is now for sale – congratulations! The thought of incoming offers can be exhilarating and terrifying, whether you are about to list or have already listed. You might feel confident about your home’s worth, the selling process, and its prospects on the market. However, many don’t feel confident negotiating when the offers start rolling in. This is why we can’t wait to help guide you with 7 real estate negotiation tips for sellers.
Negotiations are an essential part of any transaction, and negotiating the sale of a home is no exception. However, it is very rare for sellers to sell their property for the listed price. Instead, buyers will and are often encouraged to make offers. To summarize John F. Kennedy’s famous remark, “Let us never negotiate from a place of fear, but let us never fear the process of negotiation!” While we can’t turn you into a real estate negotiation expert overnight, we can give you the confidence to enter into the negotiation concerning the sale of your home!
1. Choose A Realistic Asking Price
One of our first real estate negotiation tips for sellers is to start on the right foot. First, it is imperative to price your home correctly. Of course, you don’t want to list too low and lose money on your investment, but you also don’t want to list so high that you’re constantly fielding lowball offers. So, start by looking at the price range of similar homes in your neighborhood. A knowledgeable real estate agent is an excellent resource to help you conduct a comparative market analysis to set a realistic and fair asking price!
Pricing your home competitively will attract the right kind of buyers. It reduces the time you will spend on negotiations and increases your chances of buyers entering a bidding war. In addition, a house that sits for months on the market is a red flag for many potential buyers, often leading to lower offers.
2. Put Yourself In The Buyer’s Shoes
Your grandma was right; kindness and respect will get you farther in life. Treating potential buyers with kindness and respect helps increase buyers’ coincidence and excitement about purchasing your home and will help you during negotiations.
Always go the extra mile and be kind, courteous, and helpful. Being rude (especially in hopes of gaining a position of power) is pointless (and inconsiderate) if the buyer leaves because they don’t like how you treat them. Remember that entering into a real estate negotiation is stressful for both parties. Staying calm helps encourage your potential buyer to keep calm and results in smoother and more positive negotiations.
While you remain friendly and open, keep in mind that you don’t want to overshare. Avoid discussing with your potential buyer if you are in a major rush to sell your home. If a buyer becomes aware of your time pressures, it can result in the buyer trying to negotiate with you to lower the price.
3. Get A Home Inspection
Yes, you know your home inside and out. However, it helps to have a deep understanding of what’s going on with your property. Many mortgage companies require a home inspection, and buyers often opt to have one completed even when it is not needed. It helps if you already know the fine details of what you are selling. A home inspection conducted by a reputable inspector enables you to understand what is going on with your home’s structure and any potential (costly) safety hazards and repairs.
Buyers often use defects to help negotiate the price down. However, if you already know the property’s weaknesses, you can counter with the knowledge that your home is competitive, even considering potential repairs.
4. Offer to Pay Closing Costs
Appraisal fees, attorney fees, and inspection costs all go under the blanket term “closing costs.” The closing cost is usually around 3% of the home’s selling price. Buyers are often tapped out on excess cash due to the down payment, moving expenses, and potential renovation costs. It helps to close the deal when the seller offers to pay the closing costs. Buyers often request the seller pay the closing costs.
Keeping this in mind, when a buyer first makes their offer consider that the buyer will most likely ask you to pay the closing cost. So, when you counteroffer, consider that extra 3% and maybe counter with an increase in price to help negate the closing costs. You can counter with consent to pay their closing costs and an increased purchase price. If the buyer objects, it helps for your agent to explain that by paying the buyer’s closing costs, you are ultimately lowering the home’s sale price.
5. Understand Contingency Clauses
A contingency clause is an additional condition that the buyer requires before the sale of your home will go through. Most contingency clauses are ways for the buyers (and occasionally you as the seller) to escape the deal if something goes wrong. As the seller, it is helpful to reduce the number of contingency clauses the buyer includes in the agreement. Contingency clauses can bite you in the bottom! So be careful when reviewing the buyer’s contingencies! Here are several of the most common home sale contingencies:
- Financing: The buyer will purchase contingent on their financing. You can help avoid this contingency by checking to see if the buyer is pre-approved.
- Contingent sale: The buyer will purchase contingent on selling their current property. This can result in a frustrating sale! Your finances are now tied up in the ability of your buyer to sell their home.
- Inspections/Disclosures: The buyer will purchase, but only if they approve your disclosures and a professional inspection. This is the most common and popular contingency, and you most likely will not sell your home without it.
- Timing: The purchase is contingent on the buyer being able to move into the home within a certain amount of time.
If you receive a contingency offer, then evaluate each contingency by answering each of the following questions:
- Is the contingency reasonable?
- Does this contingency reduce the value of the offer?
- Can I live with the contingency, or should I limit it? You can restrict the contingency by putting a timeline in place.
Do not be afraid of contingencies, as they are all part of the negotiation process. When handled correctly, they will not hinder the sale of your home!
6. Countering The Offer
As a seller, you often won’t (and shouldn’t) accept a potential buyer’s first offer on your home if it is below the asking price. Buyers enter into negotiations expecting a counteroffer. Usually, the initial offer is lower than what they are willing to pay.
Usually, you will then make a counteroffer that is higher than the buyer’s offer but below your list price because you don’t want to lose the sale. You want to appear flexible and willing to negotiate. However, we might argue that instead of dropping your price, counter and stick to your list price. If you priced your property reasonably, countering at your list price lets the buyer know the value of your home and that you would like to get the money you deserve. While you risk having the buyer walk away, you also avoid wasting time on buyers with lowball offers who won’t close any deal without a bargain.
Another option is to counter just slightly below your list price, no more than $1,000. This approach lets you show the buyer your home is worth your asking price while also showing you can be flexible.
Finally, put a timeline on your counteroffer. It is common for you to counteroffer and then wait an indefinite period of time while the buyer contemplates your offer. While this is happening, you cannot accept a better offer if it comes along because you are now stuck in a legally binding negotiation. Therefore, it is helpful to always include an expiration date with your counteroffer. The buyer will need to set aside minor issues and make a timely decision. However, you do not want such a short deadline that the buyer has no time to consider your offer. We recommend giving the buyer two business days to either reject or accept.
7. Work With A Trusted Real Estate Agent
One of the absolute best real estate negotiation tips is to work with a real estate agent with strong negotiation skills, candor, and your best interests at heart. An expert agent with experience in your market helps you navigate the negotiation calmly with knowledge and market insight. As a seller, you often form emotional attachments to your home, which often results in hardball tactics. Having a professional will help you get the most favorable outcome and reduce your stress.
In addition, there are many legal considerations that homeowners need to navigate when selling a home. Therefore, it is helpful to have someone well-versed in the laws and conditions of your state to ensure everything goes smoothly.
Finally, a real estate agent will help you put your best foot forward when showing your home, assisting buyers to become excited about your home and its beautiful condition!
Selling your property is a big decision and a significant financial transaction. We understand that the negotiation process is intimidating. However, if you keep in mind these 7 real estate negotiation tips for sellers, you can enter the process with confidence. If you want to sell your home in Southwest Florida, call Jim Westerfield and his professional, knowledgeable team! See what other homeowners say about their selling and buying experiences working with Jim! See what we are selling on Facebook, Instagram, and Twitter to keep updated on the latest and greatest in luxury living!