The art of negotiation is a useful skill for all aspects of life, but especially as a home seller, this trait can save you thousands of dollars if you use it correctly. Most people mistakenly think that the negotiation process starts when the buyer makes an offer on the house. In reality you should have a strategy long before even the first offer comes across your desk.
Here are a few tips to negotiating a sale so you can sell your home quickly:
Pricing Strategies
The bet way to sell a house is for you to have a couple of strategies in mind from the start of the process. As an example, it is very important to do your research into the price of your house to make sure you are listing your house at the right price.
One great strategy is to do what is called forward pricing. This means that instead of just picking the price of some of the recent closings you could instead look at the trends over time and price it based on where it is going and not where it is currently at. If you find a comparable home that sold for $100,000 six months ago but the housing market has been going up by 10% per year, then the same home would be worth $110,000. To put your house on the sale for the lower amount will leave $10,000 on the table so you want to make sure that your price reflects the current market.
Sometimes people will also raise the price of the house beyond what they would be willing to take for a final sale price. As an example, if you would be happy to sell for $100,000, you can set the price at $110,000 then when you negotiate the price down you will still end up with the house selling for the price you wanted to begin with. You could even get the higher price and if the deal goes well. One thing to keep in mind is that you don’t want to price the house too high because that will scare off the potential buyers.
It’s Just Business
As the homeowners the memories you have for the house can be a very emotional thing but the details of the sale should not be. This can be even more true if you are selling a house by owner and you do not have a real estate agent to help you deal with the negotiations. The one that has the most power is the person that shows that they are willing to walk away from the sale. You never want to seem like you are desperate but at the same time you do not want to be unreasonable during the negotiations either.
A good seller will consider the most unreasonable offer and at minimum give them a counteroffer, even if it means lowering the price a little bit. For example, if someone offers you $75,000 for a house you are asking $150,000 for do not just walk away from the sale but instead counter with an offer of $140,000 to show that you are at least open to discuss negotiations. It is highly important to keep the conversation going for as long as possible because the more time both parties invest in the process the more likely they are going to end up closing the sale. Negotiations do not always have to mean lowering the price instead you could offer small concessions like changing the finance details, or timeline, for the closing. Making these types of small changes to the original offer will give the buyer the impression that you are willing to work with them on the terms of the sale.
Concessions
Often, a small concession can be a big step forward to closing the sale. Concessions can feel like big win for buyers towards the end of a deal. Often the timing of a concession is far more important the value of a concession itself, psychologically.
Summary
Along with determining what pricing room you will allow, consider concessions and timing. Do not wait until middle of negotiation to outline your tactics since a good negotiation can be result in a very profitable sale.