In this article, we give you some helpful hints on how to negotiate selling a house or any other property.
Before engaging in negotiations, it pays to have a well-thought-out strategy for your sale price.
Understandably, some people are intimidated by the thought of negotiating property price. Some of us have learned through experience how to negotiate with real estate agents; but even if we’ve done it a few times before, the instances are usually few and far between and not enough to really learn the art of how to negotiate. Like all skills, it’s all about practice.
However, it’s not as scary or as complicated as some real estate agents would have you believe. In fact, if you prepare in advance, negotiating house price is both straight-forward and satisfying.
If you think about it, we all negotiate every day - whether it’s with our boss in relation to time off for annual leave or with our spouse in relation to household chores. Parents, in particular, have mastered 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 ‘play-time’ was over. You’re better prepared than you think.
The words ‘price negotiation’ often have a negative connotation, however, we can’t stress enough that negotiations do not equal conflict. Rather, it’s a conversation around finding a suitable compromise, a meeting point, that leaves both parties feeling satisfied.
Let’s review our guidelines for how to negotiate price, which, as you’ll see, all echo the daily negotiations you undertake with children, friends, colleagues and family.
Watch and listen
Great negotiators need not be talkative; in fact, it’s more important that you listen and pay attention to body language and facial expressions during a negotiation. The more you listen to your buyers, the more information you’ll discover about their ceiling price, their non-negotiables, and how emotionally invested they are in your property.
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 will become invaluable during the negotiation stage, providing you with the best information on how to negotiate house price.
Think first and know that silence is ok in a price negotiation
Sometimes during tense moments, we may move too quickly or blurt out information that’s not in our best interests.
In all the excitement of a negotiation, you may say something reckless or agree to a sales price before considering all your options.
Do your best to avoid making impulse decisions even if you’re keen to sell your house. For example, if a buyer puts in an offer that you are ambivalent about, thank them for their offer and let them know you will get back to them in an agreed time frame.
Perhaps, if you are not sure of a certain offer, and were hoping for more, you could ask for the buyer to agree to some of your conditions, such as shorter or longer settlement times, in return for you agreeing to the price.
In any case, give yourself time to reflect on the offer and discuss it with someone you trust before responding.
Get it in writing
Whenever a potential buyer makes an offer, be sure to get it in writing so you’re able to hold them accountable.
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.
This will show potential buyers that while they are not dealing with an agent, you’re every bit as responsible and professional.
Be prepared to walk away
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 knowing your price threshold.
If a buyer proposes an offer you’re not willing to accept, there’s nothing wrong with deciding to walk away.
Remember, buyers are likely to be nervous on how to negotiate buying a house
If you find the process of how to negotiate sale price a little intimidating, remember your buyers may also be feeling the same way. They’ll likely be wondering how to negotiate buying a house the right way and that’s ok – remember that negotiation is simply a conversation to help two parties reach a mutually agreeable position.
Questions to consider
Now that you know the basics of how to negotiate, you’ll be better equipped to make well-thought-out, strategic decisions when speaking with buyers.
However, there’s no such thing as being over-prepared. Before engaging in negotiations with a buyer, take some time to write down the questions they might ask.
Here are a few to get you started.
– The Asking Price
When asked about your sale price, what will you say? Will you give a range or opt for a minimum offer amount? 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? Your chosen conveyancer or 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 bring? 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 are prepared. The more you prepare in advance, the less stressed you’ll be when it comes time to have these conversations with potential buyers.
For extra piece of mind, if you sell with us at buymyplace, you’ll have access to our skilled professional negotiators through our vendor advocacy service, who will provide advice on how to negotiate with your buyers to get your best sale price.