There’s so much advice on getting the right price for your home but what’s lacking, is the nitty-gritty on negotiation and an honest and truthful representation of what is likely to happen when negotiating the sale of your home.
Whether you want to hear this or not, the truth is that when it comes to your price, you need to be prepared to negotiate.
Dig your heels in too hard, and buyers will walk away and, guess what? Yes, you’ll be stuck living in the house that you were desperately trying to sell.
Power play: 5 ways to negotiate your house sale
Follow these five rules to negotiate the sale of your home and start the journey to your new one.
Don’t write off an offer – think of it as a whole
If you’ve set your price at $457,000 and a buyer offers you something that starts with a 3, you’re likely to be upset, offended even and want to turn around and immediately tell them that you’re not interested. My advice? Don’t.Firstly, that offer shows that the buyer is interested in your property. They’ve made an offer and usually where there’s one offer, there’s another. Consider how you would approach buying a house, you’re not going to put in your best offer first, are you?Secondly, consider other factors that come with the price. For example, can they settle quickly? Or, take a bit of time? Have they already sold their home? Can they arrange a building inspection straight away? Are they flexible?
Research suggests that often the first offer is the best. Over 71% of respondents stated that their first offer was the best.
As the adage goes, time is money, so if you kick an offer in the butt that might work well for you in all other aspects, think carefully. Do you want your buyer to disappear and look elsewhere? While achieving the right price is paramount to selling your home, it is not the be all and end all.
Keep all potential buyers in the loop
So, you’ve got a buyer. That’s great news. However, is every aspect of ‘sealing the deal’ complete? For instance, has the buyer had their finance approved and, have they carried out a building inspection? If the answer to either of these two questions is ‘no’ you need to keep any other potential buyers in the loop.While you want this sale to go through, you’d be mad to turn away anyone else who might be interested before everything is signed off. Just like in a game of rugby, football or hockey, you need to have a ‘bench’ where the reserves can sit until it is time (or not) for them to have a go. It’s the same with any interested parties.How can you make the members of your ‘bench’ comfortable? By keeping them in the loop. Let them know you have an interested party with an offer and that at the moment you’re going ahead pending contracts. If any aspect of the ‘conditional’ deal falls through, you’ll be in touch and, if everything goes well, you also let them know so they can continue their search.
In short, don’t write off other parties until the deal is signed. Sometimes the ‘star player’ is on the bench at the start of the game.
Don’t let pride stand in the way of negotiating a deal
Your house was your pride and joy at one time. Remember how excited you were when you first moved in? Think back to all those memories that you made within those four walls and how on moving day, you’ll have a little tear in your eye as you drive away for the last time. However, you now want to sell that home. You want to move on. And, to do so, you need to sell. So, don’t let a silly thing like pride stand in the way of your dreams.I met a house hunter recently who told me a story. She had her heart set on a property and had an offer accepted. It was her dream home, perfect in every way except… when she had a building inspection carried out, they discovered termites. Now, while termites are a pain, they’re also not the end of the world. Moreover, in this case, the inspector recommended only asking for a $2,000 discount. Guess what the vendor said? He said ‘no’.I had to ram my fist into my mouth because turning down a sale for the sake of knocking $2,000 off the price of a house is madness for two reasons, firstly, that the vendor allowed pride to get in the way of his sale. $2K must have been around a 0.4% discount on the entire sale price, and he had allowed it to fall through. Secondly, and importantly, because the deal had crumbled due to a building inspection, the agent would need to declare this information to any future buyers, which could affect the price even more.
My final piece of advice? Pack your emotions in your pocket, lock them up and only let them out when you’ve drawn the curtains and, there are no buyers around!
Create room to negotiate
I’ve seen this a hundred times; the opportunity to negotiate gets nipped in the bud immediately – in one of three ways.– The first is when an interested buyer asks a vendor if they’re prepared to negotiate, and the vendor responds by saying ‘yes, of course’.- The second is when the buyer asks, ‘how much are you looking for?’ and, in response, the eager vendor says, ‘we’ll accept $545,000,’ which happens to be $50,000 less than the advertised price.
– The last is when there’s an offer, and the vendor says ‘no’ outright and walks off in a grump.
All three of these put you in a weak position.
As always with selling a home, it pays to put yourself in the position of your buyer (which just happens to be useful practise if you’re buying a new property yourself). Both parties want the best price – for themselves. You want to sell your home for $Z, and the buyer wants to buy it for $X. In the middle of these two is $Y. Of course, sometimes the first offer is way off, and more like $P but don’t be put off. Negotiation is the name of the game.
If an offer comes in too low, don’t walk away. Instead, tell the buyer that you’re looking for more. Keep the lines of communication open by either saying:
‘Thanks for your offer, however, it’s not acceptable. Can you improve it and then we can discuss?’ Or,
‘Thanks for your offer, it’s a little too low. Would you offer $Y?’
Negotiation doesn’t need to happen in the space of five seconds. Take your time. Ensure everyone is comfortable and that there’s room to breathe, reflect and think smartly.
Know when to shut up!
Selling your home is exciting, especially when a potential buyer is about to put an offer on the table. However, what you don’t want to do is blow the negotiating by saying too much at the wrong time.It’s simple when a buyer makes an offer, or you are making a counteroffer. Keep quiet. Zip up your mouth or stuff your fist into it if you need to.For example, your buyer asks you if you will accept $X and you say ‘Thanks for the offer, but I’m afraid that’s too low. Can you make another one?’ Then, you shut up. You do not offer a price; you do not try to justify, explain or backtrack. SILENCE.
Or, the buyer makes an offer, and you give a reasonable counteroffer. ‘Thanks for your offer of $X but I’m afraid it’s too low. Can you offer $Y?’ Back off. Zip up and wait. Again, do not start rambling or adding ‘but’ or ‘because’ or ‘if only’.
Those moments when you are quiet are the ones in which your buyer is making an important decision, possibly the most significant one they’ve ever made in their entire lives. If you start clouding their mind with your rambling, they will feel confused, backed into a corner, and you risk them walking away.