Selling a house is likely one of the most significant financial transactions you’ll ever make, and the price you agree with a buyer, along with the real estate commissions you pay, will determine how much profit you’ll make. Here are some negotiating strategies that could put you in the driver’s seat and help you get an edge in the market:
Consider the type of buyer
There are generally three main types of buyers. Knowing which one you are dealing with will give you insight into the leverage you have to ask for additional concessions.
Buyer in a chain
Any buyer who will have to sell their property to enable them to purchase yours is in a chain. Usually, the longer the chain, the more the risk of delays or your sale falling through. Ensure you do some digging before you accept an offer.
Whether renting or living with their parents, first-time buyers are considered the best customers for home sellers as they are chain-free. Usually, if your buyer is in rented accommodation, they should be able to move quite quickly, but they are usually depending on financing to purchase. But don’t make assumptions; check on their plans, situation, and expectations for when they want to complete payment and be sure that they are financially able to proceed with the purchase by checking they have a mortgage agreement in place.
Cash buyers are often the most attractive, although you may end up accepting a lower offer in exchange for cash, greater security, and flexibility. Before accepting any offer, you must get confirmation of the funding situation from professionals acting for your buyers, such as their bank, accountant, or solicitor.
Find out motivation
Nothing is more important to negotiation than understanding your buyer’s motivation for buying your house. Is it the only house available near a desirable school? Does the buyer have a friend in the neighborhood that they want to live near? Figuring out why the buyer wants to buy and what their concerns are will help you to negotiate the best deal for you.
Ask for something in return
Home sellers make counter offers when they’re not satisfied with a buyer’s initial bid or some term in the contract. Usually, a counteroffer states that the seller has accepted the buyer’s offer subject to one or more changes. These changes could include removing certain contingencies, quick money deposits, among other options.
That means if you list a property at $415,000 and a buyer submitted a low offer of $400,000, you can make a counteroffer of $412,000 or offer to include the washer and dryer without warranty.
In this way, you make the buyer make a concession for each concession you make, which creates a balance in the negotiation.
Negotiation isn’t just about price. The contract has dozens of terms that can be negotiated that have an associated cost. Make sure you understand the buyer’s position and motivation so when they ask you for a concession you are understand what you can demand in return.