Some of the biggest mistakes made in real estate happen during the negotiation process. Sometimes, the buyer is too stubborn and the seller caves too easily, or sometimes the seller is too stubborn and loses the buyer completely. The housing market is better than it’s been in years, but you don’t want to take any chances. It’s best to be armed with negotiation skills when trying to sell your home.
The majority of homes aren’t sold for asking price. As soon as a buyer expresses interest, they’ll offer a price, and negotiations ensue. Each party seeks leverage that will get them the price they want. If you need to sell a property quickly, that’s leverage the buyer can use against you. If the buyer need a place in your neighborhood, that’s leverage you can use against them. In most home negotiations, the party that’s most prepared is generally the party that wins.
The selling process requires balance. It requires learning to play hardball, while also being reasonable when things are fair. It’s not easy to become a negotiation pro, but here are a few tips that can help:
1. Keep the Ball in Your Court
As a seller, you’re under a lot of pressure. In today’s economy, it’s not always easy to sell a home – but the buyer doesn’t need to know that. You can keep the ball in your court, simply by keeping some information to yourself. This will result in you controlling the structure of negotiations.
For starters, don’t mention your deadline. If you’re behind on the mortgage, getting a divorce, or moving across the country, don’t let your buyer know. That gives them unnecessary leverage. By keeping this information, and similar topics, under wraps, you can avoid losing control of the situation.
2. Practice Silence
In her novel The Charisma Myth, Olivia Fox Cabane said, “I’ve often heard professional negotiators tell me that they could accurately predict the outcome of negotiations fairly early on using one simple clue: whoever has less endurance for silence loses.” Silence is an often underestimated, but incredibly powerful aspect of negotiations.
Besides the fact that a certain amount of silence shows a level of respect to the other player, it also reveals who has more self-control. Being able to remain silent can be extremely useful in times when the buyers is throwing ridiculous offers or terms your way. It will force them to recount their unjust choices on their own.
However, it’s important to note that silence isn’t always the answer. In situations where the buyer is being fair and respectful, giving them the silent treatment is a sign of disrespect, and most people won’t put up with that.
3. Work with the Bank
Many sellers can reduce the pressure by working with the bank. If you’re selling your home because you’re behind on mortgage payments and can’t afford the current payment, try negotiating with the bank to give you more time.
Banks are interested in your money, and not much else. If you come to them with a plan to get them their money as quickly as possible, they’re more likely to offer you an extension on your payments or delay payments on the interest charges until you sell the house.
Removing this kind of pressure will be immensely helpful during the home negotiation process. Without the deadlines and financial burdens breathing so heavily down your neck, you can focus on keeping calm and collected when speaking with buyers.
4. Let the House Speak for Itself
Probably the most important thing to remember about selling your home is that renovations can improve the appeal, but once you’ve shown your home, there’s no way to convince the buyer they’ll love it. People make home buying decisions based on emotions, and if your home doesn’t make an emotional connection with the buyer, you won’t have much negotiating power on that front.
Instead of trying to “sell” the home to potential buyers by pointing out the amazing features, be silent during the walk through, unless someone asks a question. You might also choose to remove yourself from the showings, letting an agent take care of it for you. This enables the buyers to connect to your home on an emotional level, without you trying to shape their opinions or come across as needy.
5. Try to Create a Bidding War
A bidding war is one of the most exciting things that can happen for someone trying to sell their home. A bidding war means that if multiple parties want your home enough, they’ll work up the price through a series of bids, potentially getting it higher than your original asking price.
It’s difficult to fabricate a bidding war, but many people have found success by refusing to consider offers until a certain date. When the buyers find out that someone else has made a higher offer than them, they’ll begin working up the price.
As a word of caution, this isn’t always successful. If the housing marketing is particularly bad in your area, or you’ve been struggling to get offers at all, it’s not a good idea to hold off on any offers. Instead, work with what you receive as they come, and stick to negotiation 101 to get as much out of the buyer as you can.
6. Be Confident, Not Cocky
As a general rule of thumb, always check your ego at the door. In home selling, it’s easy to get caught up in the potential wealth of selling a home. You begin thinking about more money and better terms, and you convince yourself that you’re a far better negotiator than you actually are. That’s when you lose out on great home sales.
Instead of pushing your luck in this manner, focus on showing confidence instead of arrogance. Convince yourself and the homebuyer that you know what you’re doing, but don’t forget that everyone makes mistakes, and there’s a lot riding on this home sale. You’ll get a much better negotiating outcome if you can recognize this and proceed accordingly.
Let Green Residential Help
It’s always good to be prepared for negotiations, but when you begin to feel outmatched, Green Residential can save the day. We charge a flat fee instead of taking a high percentage of your home sale like a typical agent, making us the best economical choice for representing your home.
Our full service realty division will provide you with the same home selling services as an agent, from professional quality listing photos to detailing final contract negotiations – all for a price you can afford. For more information about the services we provide, contact us today!