Negotiations are fundamental to all real estate deals, whether you are selling a rental property or your own home. Seldom do sellers sell their property at the listed price. Instead, buyers will often make counteroffers that suggest a lower price or even different terms to the sale. In such situations, it is time to go into a negotiation with the buyer.
For sellers, the aim of real estate negotiation is to sell a property at a good price. As a result, sellers with good negotiation skills can maximize their profit margins from a sale. If you are planning to sell your property, you should make sure that you are well equipped with the basic real estate negotiation tips. While it is not possible to become an expert negotiator overnight, here are the 10 best real estate negotiation tips for sellers to keep in mind when negotiating the sale of your property.
Related: How to Sell Your House: A Complete Step-by-Step Guide
1. Collaborate with a Real Estate Agent
One of the best real estate negotiation tactics is working with a real estate agent who possesses strong negotiation skills and letting him/her lead the process. Sellers often have emotional attachments to their homes, which usually manifests itself in the form of hardball tactics. Some emotional sellers may not even be open to negotiations at all. Real estate agents are professionals and involving them in the negotiation process makes it possible to hold your feelings back. A good real estate agent can emotionally detach themselves from your property during negotiations. This is critical because your focus should be getting an outcome that is in your favor and sometimes emotions can cloud your vision of what is best.
2. Set a Realistic Asking Price for Your House
One of the best real estate negotiation strategies to help you accelerate the sale process is pricing the property correctly. To price your house competitively, you need to look at neighborhood comps. A savvy real estate agent can help you conduct comparative market analysis so that you can set a realistic asking price. You can also use Mashvisor to get real estate comps.
Pricing your property correctly (but competitively) will attract more buyers and lead to a bidding war. You will also not have to spend a lot of time on negotiations. A house that has sat in the market for long eventually becomes unattractive to buyers. Therefore, prolonged negotiations will often lead to lower prices for your house. Setting the right price in the first place can prevent this from happening.
3. Be Polite and Courteous
Respect is critical in winning the confidence of the prospective buyers interested in your property during negotiation. This can help both parties achieve positive results. Therefore, sellers should ensure that they stay polite throughout the negotiation process and do their best to not appear rude. Sometimes potentially good real estate deals get canceled because the buyers felt insulted by the sellers. So even though negotiation in real estate can get stressful for both parties, staying calm is key. It may also encourage the buyer to act in the same way, making the entire process smooth and painless.
4. Get a Home Inspection
Another key real estate negotiation tip is knowing what you are selling. To strike a good deal, you need to have a good understanding of your property. Thus, getting your home inspected can put you one step ahead of the buyer. A good home inspection can unearth a lot about your property that you may not have known earlier. This may include the state of your home’s structure, the state of key systems, potential safety hazards, etc. An inspection will allow you to fix some of these issues. When you are equipped with key information about your property, you also won’t be taken by surprise when an incisive buyer points out certain property defects. Buyers can use such defects to negotiate down the property price.
Related: The Ultimate Property Inspection Checklist for Real Estate Investors
5. Offer to Pay Closing Costs
Closing costs such as appraisal fees, inspection costs, and attorney fees usually amount to about 3% of the home’s selling price. However, many buyers are often cash-strapped from other expenses like down payment, renovation costs, moving expenses, etc. Thus, they usually can’t afford to close the deal unless they are assisted with the closing costs.
One of the real estate negotiation tips that sellers can use is to choose to pay the closing costs. When making an offer on a house, buyers will often request the property seller to pay the closing costs. Consenting to a buyer’s request to pay for closing costs often leads to a much quicker sale. However, to ensure that you preserve your margins, you can counter by increasing your asking price. Just make sure that the price you quote will be approved by the buyer’s lender.
Related: Who Pays Closing Costs When You Buy an Investment Property?
6. Offer a Home Warranty
7. Create Competition
To get the best possible price for your property, you need to create a healthy competition. You can create competition by listing your house on the market through several different channels. You can also schedule an open house but only accept offers after the open house. Since potential buyers will expect to be in competition, they are likely to place higher offers.
You can list your property for sale on the Mashvisor Property Marketplace. Here, it will be viewed by thousands of potential buyers!
8. Put a Timeline on Your Counteroffer
During a sale, a buyer can submit an offer that doesn’t excite you and you counter their offer. Therefore, you become involved in a legally binding negotiation, which prevents you from accepting a better offer if it comes along. This can often turn into an endless back and forth with the property buyer. One of the real estate negotiation tips for sellers to sell a home quickly is to put an expiration date on your counteroffer and stick to it. This way, the property buyer will be compelled to put aside small issues and make a quick decision. However, you shouldn’t set such a short deadline that the buyer is turned off.
9. Don’t Be Afraid to Reject the Offer
During a real estate negotiation, always be ready to reject an offer if it doesn’t meet your requirements. This real estate negotiation strategy shows the buyers that what you are offering is worth it. The buyer can only submit a new offer if they are really interested in the house. By rejecting an offer and not countering, you are not locked in a negotiation with a particular property buyer. Therefore, you can accept a better offer if it comes along. This creates pressure among buyers to quickly submit a more competitive offer if they really want to purchase the property.
This real estate negotiation tactic can be particularly useful when the property has been in the market for only a short time. It is also a good strategy to use if there is an upcoming open house. Nevertheless, property sellers should always assess the state of the market before rejecting offers.
10. Keep Your Cards Close
No matter how tempting it may be, you should avoid talking about your stresses in selling. Even if you are under pressure to make a quick sale, you should never let the property buyer know. If a buyer is aware of your time pressures, it can weaken your position. In that case, they are likely to negotiate you down.
The Bottom Line
Selling your house or investment property is a big financial transaction for most people. It can also be quite challenging since buyers are striving to get the most value while spending the least. However, arming yourself with the above real estate negotiation tips will put you in the driver’s seat and help you get the best real estate deals, even with difficult buyers.