10 Negotiation Do’s And Don’ts For Home Sellers
Getting the first offer on your home is exciting. Maybe your “For Sale” sign has been in your yard for a while, or maybe your home just hit the market! Either way, receiving an offer on your home always feels like good news—until it isn’t.
More often than not, receiving an offer can be a tad underwhelming. After all, buyers have needs too and are going to try whatever they can to get the best deal. You, on the other hand, are trying to receive the highest return on your investment—you must protect your best interest too.
As a home seller, it can be tricky to navigate a buyer’s offer. It’s hard to know when to accept, when to counter, or when it’s time to walk away. Hiring an experienced negotiator can make a big difference—especially when it comes to selling your home. You need someone in your corner who can voice your wants and needs in the best possible way, and a skilled Realtor® can do just that.
Our team wants to help make this process as easy as possible, so you can finally mark your home as “SOLD” and walk away knowing you got the best deal. However, it’s going to take a little negotiation—but that’s real estate!
Follow along with us below to learn the 10 do’s and don’ts of negotiating a real estate offer—let’s get started!
5 Steps To Successfully Negotiating A Real Estate Offer
When you receive an offer that doesn’t quite meet your standards, our experts recommend trying these five tactics for a successful negotiation:
1. Make Repairs For A Greater ROI
Consider making necessary repairs around your home before listing it on the market. Maybe it’s time to fix the roof, repaint or upgrade your HVAC. By making these repairs, you will be increasing the value of your home while maximizing your return on investment (ROI).
We’re not suggesting to fix every little thing around your home though! It is important to note that there are some fixes that have a greater return on investment than others, so make your decision wisely.
If you decide to make repairs, you can present a list of new upgrades and fixes to potential buyers. While this will look good to potential buyers, it also works in your favor as the seller. You can use these updates as a bargaining chip during negotiations, allowing you to go through a quicker selling process. Buyers will enjoy the transparency, and you will benefit from knowing the true value of your home and receiving a fair offer you deserve.
2. Set Your Home’s Price Ahead of Market Trends
When you work with a skilled Realtor®, you can track where the housing market will be in the coming weeks. That way, you can appropriately price your home based off of trends and similar homes in the area. If you notice the market is going up, make the choice to value your home at a higher price. If the market is declining, price your home at a lower value to match trends.
When your home is priced ahead of the market, it gives less room for back-and-forth negotiations between you and a buyer. This gives you more of an opportunity for a fair sale, and a greater ROI as well. After all, a buyer can’t exactly argue that your home is valued at an unfair price when it matches market trends!
3. Offer Buyers A Home Warranty
A home warranty is a strong tool to consider when negotiating with buyers. When you offer a home warranty, you’re ultimately giving the buyer peace of mind at an extremely affordable cost for you.
When purchasing a home, buyers are normally worried about committing to a home with potentially costly repairs on the horizon. One way to avoid this conflict is to offer a home warranty. For around $600, you can purchase a home warranty and offer it to your buyer in the negotiation process.
Basically, a home warranty lets the buyer know that if any repairs are needed to be made within 12 months of purchasing the home (depending on the length of the warranty), the repairs should be covered in the warranty. This will help you close a deal and move smoothly through negotiations. Plus, you won’t have to worry about making every little repair around your home if your buyer knows it could be covered in the warranty.
In the end, you’re saving the most money possible while closing an offer on your home—definitely a win-win as a seller!
Pro Tip: A home warranty may be a more successful sales tool for buyers looking to purchase an old home versus a new home. Keep this in mind when negotiating a warranty!
4. Make An Educated Counteroffer
When you receive an offer, you have three options: accept, counteroffer, or reject. Each of these decisions needs to be made with care, especially when it comes to counteroffers.
You want to protect your investment, but you don’t want to come on too strong and scare a buyer away with your counteroffer. Buyers and sellers usually make counteroffers over price, terms, contingencies, and occupancy. An experienced Realtor® sees this situation regularly and will know how to negotiate properly.
It’s important to remember that while you want all of your needs met, so does your buyer. Find areas where you can compromise, and reflect that in your counteroffer. You don’t want to reject the buyer’s needs completely and force them to walk away. On the other hand, you don’t want to neglect your own needs and not get a fair price or offer for your home.
Make sure to discuss counteroffer options with your Realtor®. They will be able to advise you on the best response to an offer, whether it’s to accept, counter or walk away.
5. Create Healthy Competition Between Buyers
Sometimes it’s in the seller’s best interest to create healthy competition between buyers. However, you don’t want to create too much competition—it may result in missing out on the best offer!
Talk with your Realtor® about the best way to create a little competition between buyers. Maybe you decide to not accept any offers until after an open house, or you try asking buyers with competitive offers to come back with their best offer.
When done correctly, creating healthy competition can help you get the most value out of your home, and increase your ROI. After all, buyers won’t know how many competitors there really are, so you can use that to your advantage in the negotiation process.
5 Negotiation Strategies You Shouldn’t Try
Before getting into the nitty-gritty of home offer negotiations, familiarize yourself with these five tactics you shouldn’t try:
1. Don’t Extend Offer Deadlines
Sometimes you need to add deadlines to offers to keep the ball rolling. However, you don’t want to give a buyer too much time to come back with an offer, and you don’t want to make buyers walk by taking too long to respond!
Your buyer may be looking at other homes, and you may be considering other offers, so don’t give too much time between negotiations and miss out on a fair offer.
2. Don’t Scare Off Buyers With Aggressive Negotiation Tactics
Don’t continue to haggle back and forth over repairs, or threaten to re-list your home to get a buyer to make a move. These strategies can backfire, and leave you right where you started—no offers and even more lost time. Work with your Realtor® and be smart with your negotiations, and always remember you will have to compromise at some point.
3. Don’t Forget Your Buyers Needs Are Important Too
As a seller, it’s easy to keep your own needs in mind. Don’t forget your buyer has needs too! It’s important to be flexible when negotiating move-out dates, pricing, contingencies and more.
Your Realtor® will be able to negotiate your needs with the buyer—after all, selling your home is their number one priority! Voice your needs, wants and concerns with your Realtor® so they can make sure as many of your requirements as possible are met.
4. Don’t Refuse To Cover Closing Costs
Sometimes a buyer may offer you more for your home and ask you to cover closing costs. While you may be prompted to decline, take this offer into consideration and talk it over with your Realtor®. Obviously, you want to make the greatest possible return on your investment, but be wary of letting closing costs get in the way of accepting a fair offer!
5. Don’t Forget To Call Your Realtor®
Don’t go through this process alone! There are multiple benefits to selling your home with a Realtor®, and navigating the negotiation process is one of them.
Your Realtor® will be able to offer valuable advice and experience that you won’t be able to access on your own. A Realtor® will act as a mediator between you and your buyer and help guide both of you through the negotiation process. With any luck, you’ll both end up with exactly what you wanted!
However, don’t just pick any Realtor®! Pick the right Realtor®—a Spencer Properties Realtor® that is!
Our team is skilled in home buying and selling, so we know a thing or two about negotiating a real estate offer! Let us do the hard work for you—contact us today to set up a consultation to see how we can seamlessly guide you through the home selling process. You (and your buyer) will benefit from working with the Spencer Properties team!