Tips for Negotiating Your Sale Price
Before engaging in negotiations, it pays to have a strategy. Create a plan of attack and a set of guidelines to keep you focused.
Understandably, most people find the negotiation aspect of selling privately rather intimidating. We’ll let you in on a little secret: if you prepare yourself in advance, it can be a piece of cake. Sure, it’s easier said than done but when you think about it, you negotiate in your everyday life. To all you parents out there, you have definitely nailed the art of negotiations over the years. Think of all those countless dinners when the kids refused to eat their veggies. Or all those times the world was ending 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 them little Harry and Eva. The word ‘negotiations’ is often interpreted with a negative connotation. Negotiations do not equal conflict, we can’t stress this enough. Rather, it’s a conversation around finding a suitable compromise so both parties are happy with the result.
Let’s deep-dive into our guidelines for negotiating your property’s sale price, which we’re sure you’ll find is a play-by-play of parenting your little ones. These guidelines will help ensure you’re prepared for those confronting situations and can handle them in a calm, cool and collected manner.
If you wanted to teach little Harry and Eva how to be good listeners, you would lead by example, right? Right.
Let’s say the kids start harassing you for round two of dessert. You might give them the opportunity to explain why they think they deserve a second serving of double chocolate ice cream cake before bed, right? Okay, fine. Maybe not in this case…
The point is to talk less and listen more. The more you listen, the more you’ll find out about your buyer. Maybe your buyer has been looking for a long time? Maybe they really like the view from your front window? Maybe it’s the location they’re most interested in? These are great hints to take on board. Make note of the conversations you have with potential buyers when they visit your Open for Inspections, or when you have follow up chats over the phone. These hints make for great selling points when the negotiation stage.
Sometimes when the kids really tick you off, you might lash out and say something you don’t mean. On the other hand, when they’ve done something marvellous and you want to encourage that behaviour, you might make promises you can’t keep.
The same goes for negotiating the price of your home. In all the excitement, you may say something rash, or forget to consider all your options. Do your best to avoid making impulse decisions, even if you’re desperate to sell your home. Give yourself time to reflect on the offer. Discuss it with your partner, family, or someone you trust. Don’t be afraid to say “let me think and get back to you”.
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). But what we are saying is that 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 said offer.
During Open for Inspections, it’s natural for buyers to ask you about your asking price. What’s more is buyers may even slide in a casual offer during conversation, which could catch you off guard if you’re not ready. Politely say you’re happy to accept written offers, then give them a call after the inspection to follow up 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 buyers accountable for following formal procedures.
Always Be Prepared to Walk Away
You know when you try negotiating with your kids, but they’re relentless and it escalates to conflict where there’s no more room for compromise so 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 real estate, negotiating just a conversation. If someone makes an offer you’re not willing to accept, don’t hesitate to walk away. Sometimes you may even have to put your foot down with yourself. do some financial calculations and establish a price threshold that is financially viable. Go into every negotiation with your definitive ‘lowest price’ in mind. As tempting as it may be to accept something slightly lower, be firm with yourself and be prepared to walk away.
With all the above considered, don’t you think negotiating a sale price for your home is easier than parenting? Yeah, we think so too.
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. But 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.
You could make yourself a mini quiz! Think of the different scenarios and questions you might encounter in the negotiation stage. Consider the points 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 you disclose is up to you, but it’s a good idea to have a sound reason for why your property is priced higher than a similar one up the road.
– Your Threshold
How low will you go? Are you willing to go below your asking price? If so, by how much? Consider your absolute lowest price before entering negotiations – and as we said before, do your best to stick to it.
How long do you want the settlement period to be? 30, 60, 90 days? Longer? Why? (Hint: Your chosen conveyancer/ solicitor can help you with this one).
– First Offers
What if you receive your target price within your first few days on the market? Will you take it or will you wait to see what others might offer? How long is their offer good for? What will you say to the buyer if you reject their offer?
– Multiple offers
If you receive offers from two interested parties, what is your criteria for choosing the best candidate? Do you simply select the best of the two, or will you give the other party a chance to make a counteroffer? Will you disclose to both parties you have multiple offers on the table? If the highest offer is subject to finance, will you take that one? Or will you accept the lower that has the funds to proceed?
These aren’t all 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 your property with us at buyMyplace, you’ll have access to Professional Negotiation services that you can add to your campaign at any time.