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All owners would like to maximize
their profits. What to do? If you're a seller, there are 10 negotiating steps you can take to make sure your home has
the best chance for a top price and a quick sale.
1: Get a local REALTOR®
In a slow market there are relatively fewer buyers. It follows
that to generate the most demand you want your property exposed to as many purchasers as possible. Who do buyers contact when
they want a house? Real Estate Agents!
Figures from the National Association of Realtors show that 85 percent of all buyers
rely on real estate agengts when buying a home while 80 percent rely on the Internet. Who posts real estate information
on the Internet? Local real estate agents! ME!
(My name is June Watson and I am a licensed REALTOR® & I would love
to sell your home!)
2: Read the sale agreement
Virtually all jurisdictions have a standardized real estate contract which over
the years have become lengthy and complex. If you use one then you're automatically agreeing to all unmodified terms and
conditions, so read the entire agreement so you know what is being said.
But is there something in the proposed agreement that should
be changed, removed or added? Brokers should provide a copy of the sale agreement they expect to use at listing presentations
and this document should be read to avoid surprises and misunderstandings. For details, speak with your REALTOR®
or attorney.
3:
Know the marketplace
In terms of negotiation it's not good enough to know recorded sale prices because they frequently don't tell
the whole story. For instance, two homes may both have recorded sale prices of $500,000. One may actually have sold for $500,000
while the other sold for $500,000 but the owner gave a 3 percent seller credit to the buyer for a new roof and appliances
-- that's $15,000 off the top. Local REALTORS® who actually make sales know the
innards of recent transactions are thus are in the best position to provide negotiating advice.
4: Know your terms
You know your
property will sell at some price point, but rather than a given price it's best to think of a home as a package of price
and terms. For instance, in a slow market it may be better to pay a "seller contribution" to help buyers off-set
closing costs than to lower the sale price. In many cases, the seller contribution may be smaller than a price reduction and
much more attractive to buyers who need cash to close.
5: Reduce deposit requirements
To make a contract work there's a need
for a buyer deposit, the "consideration" necessary to bind a deal. If you're a seller you want the largest possible
deposit, but in a slow market you may have to settle for less. Buyers, for their part, want to make the smallest possible
deposit if only because a big deposit represents a huge psychological commitment -- and a financial one.
Less consideration may be appropriate if
the buyer is pre-approved for a loan, the purchasers have a strong interest in the property and no better offer is in the
picture.
6:
Throw in stuff
Do you really want to move a swing set or a washer/dryer? In some cases it may be best to "reluctantly"
part with such items if only a buyer will make an offer.
7: Update MLS photos
If it's August and your MLS photo shows a home with four
feet of snow in the front yard then buyers can guess that the home has been for sale for a long, long time -- meaning the
price and terms are, um, flexible. Perhaps more "flexible" than you would like. As your REALTOR® I
will keep your MLS photos current.
8: Review the marketing plan
The marketing plan developed by your real estate agent should be reviewed
as often as necessary to assure that; one, it is being followed and; two, it is changed as necessary.
9: Visit open houses
It's always
good to visit open houses or, as they're otherwise called, The Competition. It's not easy to be objective,
but is there something other owners are offering which might work for your property? Something you can make into a bargaining
point? Maybe an offer to re-paint the living room in a color of the buyer's choice is not a bad idea.
10: Have context
It's silly to
worry about small costs and concessions when your core goal is to sell the home.
In one situation, a buyer demanded an extra $500 to resolve
some alleged concern just before closing. We thought this was simply an example of buyer's remorse and said yes, got an
otherwise terrific price, and closed. Soon thereafter the local market slowed and prices softened. It was far cheaper to "lose"
$500 then to locate another buyer a few weeks or months later when the market was harsher and our final sale price might have
been many thousands of dollars less!
Would we have rather not paid the $500? Sure. But $500 was a small cost in the context of a rapidly changing market,
one where delay could have meant a serious price reduction.
Strategies for Sellers
Keys to Successful Negotiation
Selling Expenses
Negotiating to YES
Pricing Your Home
Selling FAQs
Getting the House Ready
Closing the Sale
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