The price you agree on with the buyer, along with the real estate commissions you pay, will determine how much money you walk away with. Negotiating is a skill that real estate professionals practice daily and one that can mean the difference of thousands of dollars in the sale of your home. The better you understand the negotiating process, the more confident you will be with the transaction, and you and your real estate agent can work as a team.
One of the key elements is to make your home show well. When buyers are excited about the property you will have the upper hand in the negotiations.
When an offer is presented to you, you have the option to accept, reject, or counter offer. Consider how close is the offer to the asking price, if the buyer has asked for repairs or credits for home improvements, if the closing date works for you, and if you can wait for more offers.
Consider these strategies:
- Counter at your list price: buyers usually expect a negotiation, so their initial offer might be lower than what they’re willing to pay. Someone who really wants to buy will remain engaged and come back to you with a higher offer. Assuming that you’ve priced your property fairly to begin with, countering at your list price says that you know what your property is worth and you intend to get the money you deserve.
- Reject the offer: If the buyers are really interested you can ask them to submit a new offer. When you don’t counter, you’re open to accepting a higher offer if it comes along. For the buyer, this creates pressure to be more competitive. This strategy is particularly useful if the property hasn’t been on the market for long.
- Attempt to create a bidding war by holding off on all offers until a certain date.
- Agree to pay closing costs: When a buyer submits an offer and asks you to pay the closing costs, counter with your willingness to pay but at an increased purchase price. While many buyers don’t have or don’t want to spend extra cash up front to get into the home, they can often afford to borrow a little bit more. If you give them the cash they want for closing costs, the transaction may be more likely to proceed. A catch is that the price plus closing costs must be supported when the home is appraised; otherwise, you’ll have to lower it later to close the deal because the buyer’s lender won’t approve an overpriced sale.