The Negotiation Process Made Simple

by c21commonweath_ldowling 12. November 2019 10:08

Selling a home is exciting, but it can also be a bit intimidating. Every seller hopes to receive multiple offers, spark a bidding war, and settle on a price far above asking, but this doesn’t represent reality for many of us.

In the real world, most houses go for less than the asking price—about 80% of them, according to Zillow.

Negotiation Is Key

When you're selling a home, you go in understanding that you may not receive your asking price. However, that doesn't mean you have to accept whatever offer you receive. Negotiation is the key to unlocking the potential profit in your property.

It may seem like the buyer has all the power in real estate deals, but this isn't actually the case. As a seller, you have a product the buyer wants. Negotiation is all about using your power wisely. Here are five tips that can help:

Know the Market

Every good salesperson understands their product and the market. The first step in successful negotiation is putting yourself at a good starting point. If you set your starting price too high, you can put off potential buyers. Set the price too low, and you might settle for less than you want.

Home Inspections Let You Hold the Cards

Smart buyers ask for home inspections before making an offer. If the inspection turns up any problems, the buyer gains leverage in the negotiation. If you have the home inspection done ahead of time, you will know of potential problems before the buyer does. You can address the issues or adjust your price accordingly.

Create Competition

Some buyers want to come in and make an offer as soon as a house is on the market. As a seller, you can refuse any offer until after you have an open house. Even if you receive only one offer, you can put pressure on the buyer by making them think there were multiple offers on the table.

Your Offers Have Expiration Dates

Some buyers try to turn negotiation into a series of multiple offers and counteroffers. When you make a counteroffer, consider putting an expiration date on it. This puts pressure on the buyer to wrap up the deal quickly, and if they don’t accept, you’ll be free to take any better offers that may come along later.

Don't Be Afraid to Walk Away

As either a buyer or a seller, your willingness to walk away from a deal is your most powerful weapon. Turning down an offer sends the message that you’re confident in your position. However, don’t close the door completely. Tell potential buyers they are free to make a new offer if they’re interested.

Conventional wisdom says the buyer has all the power in a negotiation, but sellers have more power than they think. Use it to your advantage with shrewd negotiation.