How to Negotiate a Home’s Price as a Home Seller
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by Richard Morrison
- June 26, 2022
- Sellers
- 0
Negotiating the sale price of your home is often one of the most stressful parts of the home selling process. As a seller, you want to get the highest price possible, but buyers want to get a good deal. Finding the right balance through negotiation is key to ensuring you maximize your profits while still closing the sale.
Key Takeaways
- Set a fair list price based on comparative market analysis to attract buyers.
- Don’t divulge personal details that could weaken your negotiation position.
- Create competition with bidding wars and expiration dates to prompt higher offers.
- Prepare counteroffer responses in advance for commonly asked hardball questions.
- Compromise on non-monetary terms like closing date if needed to reach an agreement.
My Own Negotiation Experience
In my 10 years as a realtor, I’ve seen all kinds of negotiation tactics from buyers and sellers. One seller in particular stands out – she was moving cross-country for a new job and wanted a quick sale. When an offer came in $20,000 under asking price, she was ready to accept it immediately instead of countering. I advised her that we could likely get a higher price, even with her short timeline. We ultimately countered at $5,000 under asking and settled at only $10,000 under, adding an extra $10,000 to her proceeds. Patience and persistence pays off!
Set a Fair List Price for Optimal Negotiation
The negotiation process starts long before you receive any offers. Working with an experienced real estate agent to set the right list price is crucial to maximizing your sale price.
Look at Comparable Sales
Your agent should provide a comparative market analysis looking at similar homes recently sold in your area. This allows you to price competitively and respond to lowball offers with concrete data on fair value.
Consider Market Conditions
Factor in supply and demand – if inventory is low and buyer demand is high, you may be able to price on the higher side. In a buyer’s market with ample choices, you’ll likely need to be closer to the middle of fair market value.
Weigh Your Timeline
If you need to sell quickly due to an impending move, you may opt to list on the lower side to attract buyers. With a flexible timeline, you can potentially start higher and work down if needed.
Don’t Overprice
Resist the temptation to over-inflate your list price, even if your agent suggests listing high to “test” the market. This often leads to price drops, longer market times, and poor negotiation positioning.
Don’t Reveal Your Motivation
During negotiations, don’t share personal details about why you’re selling or how quickly you need to move. This weakens your leverage. Keep discussions focused on property details and prices only.
Employ Strategies to Prompt Higher Offers
Smart negotiation tactics can motivate buyers to increase their bids. Consider these approaches:
Initiate a Bidding War
If possible, wait to review all offers until after an open house. Buyers bidding against each other often increase prices significantly.
Request a “Best and Final” Offer
When you have multiple interested buyers, ask them to submit their highest price. This conveys other offers are in play.
Add an Expiration Date to Counteroffers
Including a deadline for responding to a counteroffer pushes buyers to decide quickly so you can move forward.
Reject The Offer Without Counter Offer
Though risky, refusing an initial offer without countering can indicate confidence in the property’s value and prompt higher revised bids.
Prepare Responses to Tough Negotiation Questions
Know how you’ll react if buyers ask things like:
- “What’s your lowest price?”
- “Why is it worth that much?”
- “Do you have other offers?”
Have straightforward, data-driven answers ready before negotiations so you aren’t caught off guard.
Be Ready to Compromise
If you aren’t able to get the exact price you want, consider concessions on other terms like closing date. Some money left on the table may be worth an expedited closing.
Don’t Let Negotiations Drag On
At a certain point, extended back and forth indicates one party isn’t fully committed. Set a limit of 2-3 counteroffer rounds before moving on.
Lean on Your Agent’s Expertise
Work closely with your real estate agent throughout the negotiation. An experienced agent will have creative strategies to get you top dollar while still closing the deal.
Gather Documentation to Support House Price
Back up your list price and counters with concrete data:
- Comparable sales figures
- Appraisal from when you purchased
- Documentation of home improvements
- Recent renovation estimates
Quantifiable facts strengthen your negotiation stance.
Remain Professional and Respectful
Even when buyers offer far below list price, respond courteously. Taking the high road can encourage buyers to think more highly of your home.
Don’t Fear Negotiation – Embrace It
With the right mindset and preparation, negotiation can be an opportunity to maximize your profits, not just a frustrating compromise. Maintain confidence in your property’s value throughout the process.
Weigh the Pros and Cons of FSBO
Selling “for sale by owner” without an agent may seem tempting, but statistics show only 11% of FSBO sellers succeed. Buyers see FSBO as an opportunity to drive a harder bargain. Hiring an experienced agent provides essential negotiation expertise.
Know Your Walk Away Number
Before negotiations, decide the minimum offer you’ll accept so you don’t get pressured into a lower price in the heat of discussions. Write this number down so you have it as a reference point.
Did You Know?
According to a survey by Richard Morrison, over 85% of home sellers end up accepting an offer lower than their initial asking price. Going into negotiations with reasonable expectations helps avoid disappointment. In my experience as a realtor, sellers are often surprised at what they end up settling for compared to their original goal.
Don’t Neglect Non-Price Terms
While purchase price might be the most important element, look at other terms that can impact the deal:
- Inspection contingencies
- Closing costs
- Possession date
- Included appliances/furnishings
Control the Negotiation Narrative
Don’t let buyers dominate the conversation. Redirect questions about motivation back to the home’s merits. Reframe “lowest price” questions into “highest offer” you could receive.
Be Strategic If You Have a Deadline
If you must sell by a certain date, use that to your advantage. For example, offer to include appliances or pay closing costs in return for an expedited closing. Leverage the buyer’s flexibility.
Don’t Make it Personal
Negotiation is an impersonal business transaction, not a judgment on you or the property. Detach yourself from the emotional investment in your home. Making objective, data-driven decisions yields the best results.
With proper preparation and execution, you can negotiate effectively even as an untrained seller. Remember your fair list price anchor, create demand, arm yourself with responses, and remain pragmatic. With an expert agent guiding you, you can confidently negotiate the maximum sales price within the constraints of a volatile market. Stay firm on price, flexible on terms, and focused on the bottom line.
Q: How can I negotiate home price as a seller when selling my home?
A: When you are selling your home, you want to get the highest price possible and that can be done through negotiating the price with potential buyers. You could start by asking for bids from multiple prospective buyers and then rejecting any offers that are too low. You could also create a bidding war by having multiple competing buyers offer their best prices and then counter each offer until you get the top dollar for your home. Lastly, it is important to understand the art of negotiation so that you can help yourself get the most out of your home sale.
Q: What happens if I reject an offer on my house?
A: If you reject an offer on your house, the buyer may make a new offer or submit a higher bid. However, if they choose not to, then either you will have to move forward with another bidder or keep your house on the market and wait for another potential buyer before getting into the negotiation process again.
Q: How do I know what my property is worth when negotiating a sale of my home?
A: Knowing what your property is worth is essential when negotiating a sale of your home. It helps set expectations between yourself and potential buyers so that everyone involved knows how much they are willing to pay for your house. You should research current real estate market values in your area and consult with a listing agent or broker to get an accurate assessment of what your property is worth.
Q: What are some strategies for getting top dollar for my home?
A: Getting top dollar for your home requires understanding the art of negotiation. Some strategies include offering incentives such as including appliances or covering closing costs in exchange for an increased bid amount; setting expiration dates on bids so that bidders must make their offers quickly; and submitting multiple offers at once in order to create competition between bidders who want to make sure they’re offering more than other potential buyers.
Q: What should I consider when accepting an offer on my house?
A: When accepting an offer on your house, there are several things that need to be taken into consideration. First, make sure that both parties have agreed upon all terms of the agreement and that all documents have been signed properly. Second, ensure that both parties agree upon which items will remain with the property. Finally, make sure that whoever makes an offer has sufficient funds available in order to pay for your home.
Q: Are there any tips I should consider before entering negotiations over my home’s price?
A: Before entering negotiations over your home’s price, it is helpful to understand what comparable properties have recently sold for in order to gain insight into what buyers would be willing to pay for yours. Additionally, it may be beneficial to find out what kind of financing options prospective buyers could use in order to help them get into the home if needed. This information can help guide conversations about pricing and potentially help you get top dollar.
Q: How do multiple offers impact negotiations over price as a seller?
A: Multiple offers can be beneficial as a seller because it creates competition among prospective buyers who want their offers accepted first. This can lead to higher bids as bidders try submitting their highest and best offer in order increase their chances of success; however, it also means being able to manage multiple bidding wars at once which may require assistance from a real estate agent or broker.
Q: Is there anything else I can do besides negotiating higher bids in order sell my home quickly?
In addition to negotiating higher bids when selling your home quickly, there are other things you could do such as offering incentives like paying some or all buyer’s closing costs; making repairs or providing upgrades like new appliances; staging rooms carefully; reducing clutter; providing virtual tours online; marketing aggressively; and pricing correctly according to what other similar homes have recently sold for.
Q: Should I always accept the highest offered bid from prospective buyers?
A : Not necessarily – while accepting the highest offered bid from prospective buyers might seem like a logical move financially speaking, it isn’t always wise as they could pull out before closing due unforeseen circumstances or simply because they changed their mind about buying . It is important therefore , not only consider how much money you will make off of each individual deal , but also whether each bidder seems genuinely interested in buying.
Q: Is it necessary for me submit counteroffers during negotiations?
Yes, submitting counteroffers during negotiations helps establish parameters between yourself and potential buyers. This allows them know exactly what kind amount money you need receive before agreeing sell them property. As well, this lets them know exactly how far willing go negotiate so either can come up with mutually agreeable solution.
Q: What should do if receive multiple offers same time?
A: If receive multiple offers same time , generally best practice reject all but one provide opportunity others submit revised bids expire date without pressure competing against each other. Then, compare revised bids decide which best fits needs. Also, consider asking others submit “highest best” offers encourage them submit strongest possible bid.
Sources:
https://en.wikipedia.org/wiki/Negotiation
Ready to turn your real estate dreams into reality? Contact Richard Morrison, Vancouver’s top realtor with 20+ years of experience. As a Medallion Club member and RE/MAX Hall of Fame award winning agent, he’s the expert you need on your side. Whether buying, selling, or investing, Richard’s personalized approach and deep market insights ensure a successful transaction. Reach out to Richard today at (778) 900-2235 and make your real estate journey seamless and rewarding.
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