How to Negotiate the Sale Price of Your Home
Before engaging in negotiations, it pays to have a well-thought strategy.
Understandably, most people find the negotiation aspect of selling privately rather intimidating. However, it’s not as scary as real estate agents would have you believe. We’ll let you in on a little secret, if you prepare yourself in advance it’s a piece of cake. Sure, this process is easier said than done but when you think about it you negotiate every day.
To all you parents, trust us when we say you have definitely nailed the art of negotiation. Think of all those countless dinners when the kids refused to eat their vegetables. Or all the tantrums that were thrown because you said ‘play-time’ was over. See? You’re better prepared than you think.
The process of negotiating your property’s sale price is quite similar to parenting and negotiating with your kids – let’s call those kids Harry and Eva. The word ‘negotiations’ often has a negative connotation. However, despite popular belief, negotiations do not equal conflict – and we can’t stress this enough. Rather, it’s a conversation around finding a suitable compromise that both parties are satisfied with.
Let’s review our guidelines for negotiating your property’s sale price, which we’re sure you’ll find is a reflection of parenting your little ones. These guidelines will help ensure you are prepared for confronting situations and you’re able to handle them in a level-headed manner.
If you wanted to teach Harry and Eva how to be good listeners, you would lead by example, right?
Let’s say one evening at the dinner table they begin harassing you for round two of dessert. You’d likely give them the opportunity to explain why they think they deserve that second serving of double-chocolate cake before bed, right? Alright, fine, maybe not in this instance…
The point is to talk less and listen more. The more you listen to your buyers, the more information you’ll discover. Maybe your buyer has been searching the market for a long time? Maybe it’s your property’s location they’re most interested in? Take note of the conversations you have with potential buyers when they visit your Open for Inspections. These details make for great selling points when you’re in the negotiation stage.
Sometimes when the kids really frustrate you, you might lash out and say something you don’t mean. On the other hand, when they do something marvellous and you want to encourage their positive behaviour, you might be too quick to react and make promises you can’t keep.
The same goes for negotiating the purchase price of your home. In all the excitement, you may say something reckless or forget to consider all your options. Do your best to avoid making impulse decisions even if you’re desperate to sell your house. Give yourself time to reflect on the offer and discuss it with someone you trust.
Get It in Writing
Now, we’re not saying you force little Harry and Eva to sign agreements every time they agree to clean their rooms (although that’s not a bad idea), what we are saying is you hold them accountable. Just like they hold you accountable when you promise them a trip to Maccas in exchange for some peace and quiet.
Whenever a potential buyer makes an offer, be sure to get it in writing so you’re able to hold them accountable for their offer.
Buyers might verbally propose offers during your Open for Inspections. Politely say you’re happy to accept written offers then follow up after the inspection if you don’t hear back. An offer isn’t legal until it’s on paper so it’s important to get everything in writing and hold your buyers accountable for following formal procedure.
Always Be Prepared to Walk Away
You know when you try negotiating with your children, but they’re relentless? Then the conversation escalates to conflict where there’s no room for compromise and you’re forced to put your foot down? Fortunately, negotiating the sale price of your home never escalates to that level (phew!)
Remember, when it comes to selling property negotiating is simply a conversation. Prepare yourself in advance by establishing a price threshold that is financially viable, and enter every negotiation with your definitive ‘lowest price’ in mind. If a buyer proposes an offer you’re not willing to accept, there’s nothing wrong with deciding to walk away.
With all the above considered, don’t you think negotiating a sale price for your home is easier than parenting? We tend to agree.
Now that you know the basics of how to negotiate, you’ll be better equipped to make well-thought, strategic decisions when speaking with buyers. However, as they say, there’s no such thing as being over-prepared. Before engaging in negotiations with a buyer, take some time to think of all the questions they might ask. Put yourself in their shoes and think like a buyer.
Here’s an idea, make yourself a mini quiz! Think of the different scenarios and questions you could possibly encounter in the negotiation stage. Consider the information below as food for thought to get you started.
– The Asking Price
If asked about your sale price, what will you say? How much or how little information you disclose is up to you, but it’s a good idea to have a sound reason for why your property is worth a higher price compared to a similar property down the street.
– Your Threshold
What is the lowest price you’re willing to accept? Are you willing to accept below your asking price? If so, by how much? Consider your absolute lowest price before entering negotiations and, as previously mentioned, do your best to stick to it.
How long do you want the settlement period to be? Will you choose 30, 60, 90 days or longer? Why? (Hint: Your chosen conveyancer/ solicitor can help you determine this detail).
– Initial Offers
What if you receive your target price within a few days of launching on the market? Will you accept the offer or will you wait to see what other buyers might offer? How long is their offer valid? What will you say to the buyer if you reject their offer?
– Multiple Offers
If you receive offers from two interested parties, what are your criteria for choosing the optimal candidate? Do you simply select the highest offer or will you allow the other party to make a counteroffer? Will you disclose that you have multiple offers on the table? If the higher offer is subject to finance, will you accept that one? Or will you accept the lower, pre-approved offer that has the funds to proceed?
These aren’t simple questions to answer. Once you’ve set your sale price, begin asking yourself these questions to make sure you’ve had enough time to prepare. The more you prepare in advance, the less stressed you’ll be when it comes time to have these conversations with potential buyers.
If you’re sitting here and the end of this article still thinking negotiating is scarier than disciplining your kids, then have no fear. If you sell with us at buyMyplace, you’ll have access to Professional Negotiators who will provide advice and help keep you on the right track.