How to negotiate selling your home makes up a vital component of any sales strategy. Sellers should actually plan for this event well in advance of receiving an offer from a buyer. Preparation for negotiating your home sale price begins by obtaining information on prices of similar homes that have sold in your neighborhood within the past six months. Your real estate agent can provide you with a report called a comparative market analysis, which contains data on the most homes that have sold.
Improving the Condition of Home
Prior to putting your property up for sale, do what you can to increase its value. Always start with the minimum repairs necessary to bring the home’s asking price in line with neighborhood comparables. Then, proceed to make the home stand out from other houses on the market. Presenting your home at its best, and increasing the value before listing it for sale, does not require you to invest in large and costly upgrades.
After ensuring the home meets the basics buyers look for in houses located in your neighborhood, commence an extensive cleaning inside and outside the home. De-clutter the yard, garage, closet and rooms. This is a perfect time to have that garage sale or donate items to the Goodwill. Initiate the packing in anticipation of your move, which creates more space. Enhancing the curb appeal of the property can also improve the home’s value. Again, make inexpensive changes, such as installing a new entrance door, painting or fresh landscaping.
On the interior of the house, focus on making cost-effective changes in the kitchen or bathrooms. Studies have shown that these rooms boost home values the most for the money invested.
Pricing Your Home
Price the home right before putting it on the market. Many sellers and inexperience real estate agents believe pricing the home high to have negotiating room to realize the desired sale price. However, this approach works to the seller’s disadvantage. Most buyers and real estate agents will simply ignore an overpriced home newly listed on the MLS.
This strategy puts a homeowner in the predicament of having to lower the price to attract interested buyers. However, many buyers will make lowball offers because they believe the seller has reached a desperation point. Work with your agent and use the comparative market analysis to help settle on the best price.
Develop a Negotiation Strategy
Figure out your bottom line. How much do you want to clear from the sale after you pay all of your costs? Use the sold data from the comparable market analysis provided by your real estate agent. Compute the amount it cost you to make improvements. Add closing costs, real estate commission and subtract the total cost from different final sales price scenarios.
Tip for Reviewing Offers
Try to discover as much information as you can about any buyer who makes an offer on your home. Extra information accompanying the offer can provide priceless insights into the buyer’s frame of mind. The information helps you to plot the best way to negotiate with that particular buyer.
For example, some buyers make offers well below the asking price because the price exceeds their budget. Knowing that the buyer has concerns about the budget may prompt you to counter the buyer’s offer by proposing to pay a percentage of the buyer’s closing costs. In some cases, the buyer may offer the full price, but ask the owner to make certain repairs. You can counter by offering to absorb half the cost of the repairs, providing a 1-year home warranty plan, or giving the buyer a credit at the closing.
Avoid the temptation to accept an offer too quickly. Most offers will give you two or three days to accept. The Negotiation Board says sellers should use that time to their advantage and compare the offer to the most rent sold data for comparables.