For some, negotiating can be the most exhilarating parts of the home sale process. For others, having to negotiate when you sell your own home can be terrifying. No matter which side of the fence you sit on, this list of tips will help increase your confidence when you sit down at the home seller negotiation table.
When it comes to taking a test, you don’t practice circling answers or go over how to hand in papers – you need to study.
The same is true if you want to raise your negotiation skills. The most important thing you can do in the negotiation process is to set yourself up for success prior to listing. Study the neighborhood, past sale prices, and try to keep yours within 5-10% of past prices. This will give you the confidence you need when negotiating since you’ll be fully aware of your home’s real value.
Always Be Countering
You’re probably familiar with the famous line from Glengarry Glen Ross delivered by Alec Baldwin, “Always be closing.” When it comes to negotiating your home sale, the ABC rule is a little bit different.
Always be countering.
You might not like some of the offers that come in on your property – and that’s okay. Just don’t make the mistake of letting a weak offer slide by. No matter what, always counter. You never know who’s very interested, but thought they might be able to get a deal. You’ll could save thousands for yourself by countering.
Similar to doing your research, getting an appraisal is another way you can give yourself some confidence. Knowing what your home has been appraised at can help you negotiate, and is sure to make your potential buyers trust you more. Spend a few hundred dollars on an appraisal, and rest assured it will pay for itself when it comes time to negotiate your sale.
Establish a BATNA
BATNA is a term coined by Roger Fisher and William Ury in their 1981 bestseller, Getting to Yes: Negotiating Without Giving In. It stands for, “Best alternative to a negotiated agreement.”
Essentially what we’re saying here is you need to have a contingency plan. It could be renting out your place if you don’t get any decent offers, or it could mean re-listing in a few months after some renovations are made.
There are many reasons why having a contingency plan is a good idea, but from a negotiating standpoint, there’s one major advantage it provides: clarity. If you know what you’ll do without a negotiated agreement, you can feel confident when negotiating with buyers. It lays out and reinforces your vision so you won’t be caught off guard. Don’t act as if it will happen – just keep it in the back of your mind.
Pay Attention to Your First Offer
If it’s your first time selling your home, be sure you don’t ignore your first offer. This is often a knee-jerk reaction, as the first offer as often viewed as a “starting point.”
Don’t fall victim to this trap. The first offer is often the best offer, and it should be taken seriously and countered appropriately.
Don’t be Stubborn
No matter what, do not come off as stubborn at the negotiating table. People want to work with people who seem flexible – even if you’re truly not. If pricing is firm, and a potential buyer is getting close, try thinking outside the box. Offer to pay the buyer’s closing costs, or leave a room that caught their eye furnished. Try to figure out what’s important to your buyers, and make the pitch.
Keep the Ball in Your Court
This is crucial. When it comes to sales, the rule is the same as poker: never show your hand.
Buyers are notorious for asking about timetables and deadlines – don’t give them one. Keep your cards close to your chest and keep yourself in the driver’s seat. This goes for your personal situation as well. If you’re moving because of a divorce, or are taking a job in another city, don’t offer up that information. Stay cool and don’t give anyone any leverage.
Set a Date to Look at Offers
It’s always a good idea to set a date to look at offers. This has been known to start bidding wars, and while it isn’t a sure thing, this is worth taking a chance over. Communicating with potential buyers that you’ll be taking offers on a certain date shows confidence, and puts the power back in your hands. Go through your offers on the date you select and counter accordingly.