For some sellers, the negotiation process is a chance to duke it out with potential buyers while for others it is a nail-biting source of anxiety. In order to plan for and weather the process successfully, formulate a game plan with an agent and determine ahead of time what your goals, priorities, and expectations will be.
What factors into a successful negotiation?
Success is primarily dependent on your goals and the goals of the buyers. In many negotiations, a win-win is both desirable and possible. In other cases, the negotiating parties have widely varying interests and it is more difficult to come to a conclusion that is satisfactory to everyone.
To maximize your chances of a successful negotiation, it’s important to remember that flexibility is key. The more options you’re able to bring to the table the better your chances of walking away with a solution that is mutually acceptable.
I have countered the buyers’ offer. How long should I wait for a response?
Generally, the counteroffer will include a stated timeframe for response. This could vary from 24 hours to three days or more, especially during the holiday season or over a long weekend. If you don’t hear anything within the stated time, you have the option of moving forward with another offer or checking in to ensure that a response has not been misdirected.
I have a lot of experience negotiating as part of my job. Why shouldn’t I negotiate on my own behalf?
While many sellers feel that they are strong negotiators, it is a different proposition to negotiate with your own property and your own finances. Emotions can take over during even the most trouble-free negotiations, and it is easy to say or do something to undermine your negotiating position when you are caught up in your own personal perspective and feelings.
One of the main reasons for engaging a real estate agent or broker on your behalf is to benefit from their expertise in your market and to allow them to bring a dispassionate, professional perspective to the negotiation for your sale. This can help to keep the conversation going and the negotiation moving forward, even when tensions run high.
Everyone keeps talking about a low inventory market. How does that affect my negotiating position?
In many areas, low inventory may mean that you will have an easier time selling your home. It may be mean fewer days on market and can mean a higher price paid for your home, as well. This is certainly a great position to be in as a seller, however, it is important to remember that your home will still need to appraise for the sale price in order to facilitate financing for your buyers.
A real estate professional will keep track of market conditions as they change and help you use the most relevant comparable sales to price your home properly for the market. In addition, in the event of a multiple-offer situation, which is common in a low inventory market, your real estate agent will provide valuable insights to help you choose among the various offers you’ll be considering.
If someone wants my house, they’ll have to give me what I want. Why should I negotiate?
It is common for sellers to decide that they will test the market and wait for a more generous buyer to come along and fall in love with their home. While this does sometimes happen, you may experience some frustration as you wait for that one perfect buyer.
In addition, you may experience the law of diminishing returns since the increased number of days on market work against your position and suggest to potential buyers that there is something wrong with the house—or that you are unwilling to be reasonable in the event of an offer.
I really need a certain sale price for the house. What can I negotiate on other than price?
You will first need to check with a real estate professional to ensure that the price you need is supported by comps for your area. Once they have helped you set this price and you are sure that it is appropriate, it is time to think about other factors that will come into play during your negotiation.
You may be able to offer a quick closing if you are able to move shortly after agreeing to a ratified contract. This may be especially desirable for cash buyers who will not have to wait for financing and will be able to close more quickly. You may also be able to provide seller help at closing if needed or allow some of your furnishings, appliances, or lawn implements to convey at no additional charge to the buyer.
Once we come to an agreement and go under contract, are the negotiations over?
In many ways, the negotiations are just starting at this point. Following the home inspection, there will be a negotiation regarding needed repairs identified by the inspector. In the case of an as-is sale, however, the buyer may choose to hire an inspector for information only and forego any subsequent repairs prior to closing.
Should the appraisal on your property come back at less than the sale price agreed to in the contract, there may be another round of negotiations for the difference. You may choose to lower the price to the appraised value, the buyers may choose to add cash to their offer, or you may split the difference, giving a little on either side.
How do I know that you aren’t secretly negotiating with the other agent to push the sale through?
Real estate agents and brokers are sworn to uphold a fiduciary duty to their clients. This means that it is not simply unethical to negotiate against your interests, it would effectively end the career of the agent or broker involved. They cannot share information without your approval and they must negotiate with your best outcome in mind.
If a real estate agent is representing a buyer who is interested in your property, you have the option to agree to move forward under dual agency, choose to work with a different agent, or ask the agent to pass their buyer along to another agent. Even in the event of dual agency, however, it is the agent’s responsibility to ensure that the fiduciary relationship is upheld with each member of the transaction.