Here are seven top negotiation tactics to use when selling your home. Even though they are simple, they are very effective. I use these tactics all the time with very great effect, which isn’t surprising. That’s because most real estate agents actually have very little practical experience negotiating, and don’t want to rock the boat because they very badly want the commission check.
Many of these tactics can be used in one form another, either when initially negotiating a purchase contract with the buyer, or later down the road if a buyer tries to in any way re-negotiate the deal based on what they discover in their due diligence or perhaps some change in their personal circumstances.
Tactic #1: the most important tactic of all is to maintain a productive, positive, and professional tone throughout negotiations. Think of negotiation as a discussion rather than an argument. You’re seeking agreement, not bitter acrimony. Remember that buyer and seller have the same ultimate goal – they just have different ideas on how to get there. Keep the other party engaged in the process by communicating with them in such as way as they know you want to make this work.
Tactic #2: keep in mind that it’s rare for a buyer’s first offer to be their absolute best offer. I always say that it’s rare an offer is so great it can’t possibly be improved on. Consider countering back at full price, or tighten up the terms, like inspection period and escrow length.
Tactic #3: When you make a counter offer, the default verbiage gives the buyer three days to respond. Consider shortening that up, to instill a sense of urgency in the buyer. The use of a “limited time offer” is a well-worn marketing technique, and it can be effective in real estate negotiations as well.
Tactic #4: Have some comps around which appear to offer less value than your house does, but which the price is higher, or at least equal, to what you are asking. Be prepared to go in-depth on this; actually talk with the buyer or buyer’s agent, and show them the comparatively superior value your home represents.
Tactic #5: If the market is appreciating, make sure the buyer knows what exactly is going on in the market right now. Go ahead and tell them the trends: how much prices are appreciating, how quickly homes are selling, and in particular, how many homes sell at or over asking price. Make sure they understand that they are getting a good deal, especially how much they stand to lose if they wait another few weeks or several months before they manage to get into contract on another property.
Tactic #6: Make sure they know that there is a lot of interest from buyers right now, and they don’t want to lose out on your home. Make sure they understand the kind of traffic you’re seeing at the open houses, the number of agents who call and inquiry about writing offers. Make sure the understand your home is a hot commodity and it won’t be around long.
Tactic #7: If the buyer is trying to re-negotiate the deal based on anything in the appraisal, or is simply re-negotiating based on some fact they have uncovered in their due diligence period, ask to see the appraisal. The appraisal is not normally given to the seller, as it is the buyer’s exclusive property. If they are renegotiating the deal in any way, and the appraisal has already been performed: get a copy. There may be some ammunition in there for you, for example, the property may have appraised higher than contract price, the appraiser could note the property is in generally good condition as compared to the comparables, or the value derived using the income or cost approach may be significantly higher than the comparable sales approach (where the appraised value is usually ultimately derived from).