Successfully negotiating the deal
With rare exception, negotiating the transaction is the most complex part of selling a home. At the same time, it’s the one that can involve the most creativity.
That’s why it’s important to have an experienced and savvy REALTOR® who has successfully worked through many different transaction scenarios. What follows is a brief description of the negotiation process and a few strategies for negotiating the best possible deal you can. This includes: keeping in mind your situation, priorities and needs, not giving your situation away to the buyer and buyer’s agent, trying to understand and respect the priorities of the buyer, being creative and, where necessary, willing to compromise to get the deal done.
The Basic Process
When a buyer, typically with the help of a REALTOR®, makes an offer on your home they’ll do so using a contract that has been developed by your local real estate association in conjunction with legal counsel. These contracts enable the buyer to set a sale price, and also include many clauses for specifying various terms of purchase, such as the closing and possession dates, the deposit amount, and a variety of other conditions.
The buyer’s REALTOR® will then deliver the offer to your REALTOR®, who’ll present it to you. You should closely review every detail of the offer with your REALTOR®, who’ll be happy to address all your questions about the offer and the process itself. You can then accept the offer, reject it, or counter it to initiate the negotiation process. Successive counter-offers, with deadlines for responding and meeting various contingencies and special conditions (e.g. a home inspection, the buyer securingfinancing), will be exchanged between you and the buyer until a mutually-satisfactory pending agreement is reached or the negotiations collapse.
Don’t Show Your Hand
Even in a buyers’ market, it’s crucial to keep certain aspects of your selling situation (e.g. your finances, why you’re selling, how urgent you are) as concealed as possible from the buyer and buyer’s agent. Remember, it’s the job of the buyer’s agent to get the best deal they can for their client, so any vulnerability you show could end up compromising your position and costing you thousands of dollars.
This is not the same, however, as expressing your priorities very clearly throughout the negotiations. Properly done, the firm statement of your priorities will strengthen your position.
It is the responsibility of your REALTOR® to make sure the buyer and buyer’s agent only know what they’re legally entitled to know and, beyond that, what you want them to know.
Understand And Respect The Buyer’s Priorities
If, during the negotiations, you can find out more about the buyer’s priorities you’ll not only improve your position, but you’ll also be able to resolve any obstacles more creatively and sensitively.
For instance, if a buyer is adamant about the sale price – perhaps because they love your property, but they’re at the limits of their available financing – they might be more flexible about the closing date or willing to make concessions about some other terms. There are no “one size fits all” approaches to negotiating, particularly in the current market. In principle, though, the more you know about the buyer’s priorities, the more you’ll be able to work with them in order to achieve your own priorities.
Have You Really Found The Right Buyer? If So, Make The Deal Happen
Particularly in a market where reasonable offers can be hard to come by, once a buyer makes one you should be willing to make a few compromises to seal the deal. You just never know when the next serious offer will come along – or what it will cost you to wait for it.
That said, here are a few basic principles of successful negotiation to consider if you’re committed to completing your sale:
- Remember your priorities and respect the buyer’s. Don’t let small things get in the way of your better judgment.
- Disclose everything. Smart sellers proactively go above and beyond legal necessity to disclose all known defects to their buyers. Most states have property disclosure forms. Use them. If the buyer knows about a problem, they can’t sue you later.
- Ask questions. Offers may contain complicated terminology, sometimes three or more addenda. Your REALTOR® can help clarify everything for you.
- Respond quickly. When buyers make an offer, they are in the mood to buy. But moods change, and buyers are known to get buyers’ remorse. Don’t delay if you want the sale.
- Stay calm and be patient. At all times keep communication civil and agreeable, even if the buyer gets tense, or you might lose your sale.
- If necessary, defer until later. If small issues get in the way of big ones, focus on and consolidate your agreement on the big issues and come back to the small ones later.
- Meet halfway. At the end of the day, if there are disagreements about relative small expenses, split the difference and smile.
- Take care with contingencies. When you’ve landed your buyer, your signed acceptance of a written offer becomes your sales contract. Except for removing any contingencies, this document is the binding basis for the sale.
- Rely on your REALTOR®. It’s your agent’s responsibility to represent your best interests every step of the way. Your success is their success.
The reality is that most negotiations proceed without much problem. In the event that there are difficulties but you’re still committed to selling, remember: where there’s a will there’s a way.
