Selling a house—whether yours or someone else’s—often involves a long process, layers of negotiations and other tasks to perform. In some cases, if the negotiation does not end with an agreement the sale of the property falls through, only to begin again when a new potential buyer shows interest.
The art of negotiation, therefore, is an important skillset to have in a property purchase or sale transaction. The following will provide a few tips on some important negotiation skills that can help increase the chances of a successful closing on a property deal.
1. Do Your Research
A saying has it that information is power. Having certain information about the property (and its environment) can give you a huge advantage in your negotiations with the other party to a property transaction. If you are, for example, armed with information about such things as the local property market, the neighborhood, local property taxes, crime statistics, and other such information linked to the property in question, you can leverage these to steer the negotiation toward a more favorable outcome. So, before you enter a negotiation, make sure to research everything you can about the property.
2. Get A Home Inspection
A home inspection is often a non-negotiable aspect of the purchase or sale of a house. Providing certain important information about the property in question will rely on a thorough home inspection being carried out.
Showing a potential buyer this home inspection report can possibly move them further along the buying funnel, provided the report does not indicate significant structural defects. And even if it does, it is likely a good idea to carry out any necessary repairs that may have the potential to scuttle the deal.
3. Create Competition
A popular saying has it that competition is healthy. A property that is seen as having high competition will potentially make that property seem more desirable and it can create a sense of urgency in interested buyers. An effective way to do this is to only accept offers after the open house. Interested buyers will see that there are several other people interested in your property and, therefore, might feel a need to place a competitive offer asap. You can then pick the top bidders and use them to offer a counteroffer to each other. Not only will this pressure potential buyers to decide quickly but it will also encourage them to max out their offers so you can get the best price possible for your property.
It is important to note that this should be done in as ethical a way as possible and to ensure that no laws or regulations are being flouted in taking this approach.
4. Don’t Be Too Eager
In a property transaction, truthfulness and sincerity are valuable commodities. It fosters a positive relationship between the buyer and seller. However, you should still always exercise prudence when showing your eagerness to sell the property. Clever or experienced buyers know that if a seller is hoping to close a deal as quickly as possible, chances are that they may be willing to agree to a lower price. So try your utmost best not to appear too eager to sell the property so as not to give the impression to the buyer that you’re willing to go below your asking price
One practical application of this tip is to always wait for the other party’s response, especially in text messages or emails, before following up or offering a “better deal” to entice them back. Wait for them to respond and see what they have to say. They may accept your initial terms for all you know.
5. Offer A Home Warranty
Many buyers hesitate to buy properties that could require extensive repairs and maintenance. This is usually true for older properties. An effective but affordable way to assuage this concern is by offering a home warranty. A home warranty covers the costs of repair and replacement of important household systems and appliances for a set period. In addition to assuaging the buyer’s fears, a home warranty will also enable you to maintain your asking price.
6. Be Strategic About Inclusions
Many sellers are sometimes too quick to reveal that their asking price includes various appliances, add-ons and other things that come with the property. They are throwing away a valuable negotiation tool. People generally love freebies and this is why it is an effective tactic to use in your negotiation.
So, instead of immediately revealing that your asking price includes any available add-ons or extras to the property, you could say that they are negotiable. At a later stage, you can then tell the potential buyer that you’ll include all these extras in the purchase price at no extra cost. If this works, chances are that the buyer will come out of the negotiation feeling that they have gotten a good deal by getting these extra things or add-ons for free, when in fact you may have been looking to include them in the property purchase price in the first place.
7. Offer To Pay Closing Costs
Many buyers sometimes hold off on their offer because of what they consider to be the high closing costs for the property, which might include things like the title search, property appraisal fee, property title transfer fee, transfer tax, real estate attorney fees and more.
These fees could go up to 6% of the property’s selling price. For a buyer, this is a substantial amount. So offering to cover some of the closing costs that the buyer would ordinarily have to cover might help sweeten the deal for them and convince them to agree to move forward with it.
8. Don’t Be Afraid To Say No
The goal of any negotiation is to close a sale. However, if a negotiation does not meet your requirements, do not be afraid to say no. This shows your buyer that your property is valuable and worth it, and if they are really interested, they may try to win you back. Furthermore, this frees you up for a better offer when it comes along.
The Bottom Line
Negotiating a real estate sale is a real challenge that, more often than not, even experienced real estate agents struggle with. As you negotiate with potential buyers, stay alert and implement these tips as appropriate to increase your chances of success.
About the Author
Kanayo Okwuraiwe is a startup founder, real estate enthusiast, and digital marketing professional. He is also the founder of Telligent Marketing LLC, a digital marketing agency that provides digital marketing services to the real estate and other industries.