Negotiating the Sale

The negotiation phase of the home sale is when the prospective buyer offers to buy your home at a certain price, including certain items and terms, if certain conditions can be met. Everything is open for negotiation.

Primary Negotiating Points

THE PRICE – What is the cash price the buyer willing to offer

THE TERMS – What the buyer wants included. Example: appliances, drapes etc.

CONDITIONS – Conditions set by the buyer in order to proceed with a purchase. A sale may be conditional upon the buyer obtaining financing, the house passing inspection, the home selling for not more than the appraised value, the buyer selling their house first etc.

DATE OF POSSESSION – the date the buyer will move in.

DATE CONDITIONS TO BE REMOVED – the date in which the deal is either final or becomes null and void depending on whether the conditions are met or not.

Secondary Negotiating Points

THE DEPOSIT – As much as possible. Usually 5%-10% of the house value however $5,000 - $10,000 is common or even $1,000. If the buyer walks and does not complete the sale, this is all you have. We suggest keeping $10,000 or higher - wherever possible.

THE DEPOSIT should always be held in trust by your attorney and be clearly noted that if the buyer does not close after the legal offer to purchase is completed, 100% of the deposit goes to you the seller. The deposit is not provided until the legal offer to purchase is completed and it is made out to the sellers’ attorney in trust unless an escrow agent is being used then it will go to an escrow agent.

Before entering into any negotiation know what your bottom line is. Don’t get caught up in the excitement. If an offer is below what you set as your rock bottom point, reject it or take time to think it through.

You will get low-ball offers. IGNORE THEM. Don’t become discouraged. There are people out there that are strictly looking for a great deal – they are just bargain hunters. If your house is priced right, don’t worry, you will get a reasonable offer.

Your house is a valuable commodity that people want. Protect it and don’t let go of it until you get what you want. You won’t get a second chance. Before accepting any offers, call all the people on your guest log, let them know you have an offer and ask if they would like to make an offer.

Negotiating is like poker, no one will show their true faces. You don’t know what the buyer is thinking. Is this offer really his/her final offer or did his/her spouse tell him/her to buy the house no matter what? You just don’t know.

The best way to try to understand where the buyer is coming from, is during each visit. When each buyer leaves, write down what you heard them saying about the home, their excitement levels, and their general interest. Give them a rating on a scale of 1-10 as to what you believe their interest level was. When the offers are being presented, this will give you an insight as to what the buyers are really thinking.

Before accepting any legal offer, make sure an attorney is included.

For every offer you get, you may counter-offer. If you were asking $199,000, a buyer offers $189,000 you may counter-offer by being willing to accept $194,800.

For any offer they make, you may say “I’m not willing to accept this", and present what is acceptable to you.

This will go on until both of you completely agree.

If over a reasonable amount of time, you both cannot agree, the negotiation must be broken off. If either party wants to change their position, you can always resume the negotiations at any time.

Don’t let your ego get in the way. People may criticize your decorating etc. Be friendly. Don’t let this phase you. They may be saying this to try to justify a lower price. Stay in a business mind and mood. It’s business – not personal.

For a deal, both must compromise. In a good deal both parties will have to give something up, but both parties must walk away happy. It must be a WIN-WIN situation. You, the seller, will walk away with your house sold at a price close to what you wanted and the buyer will own a house close to what they wanted, and close to a price he/she wanted to pay.

GOOD LUCK - NEGOTIATE HARD!