November 4, 2011
When selling a home, negotiating the price requires an understanding of not only the home's value but also buyer and seller tactics. The process is a complex one shaped by perceptions as much as facts. If prospective buyers think they see a weakness, they may press hard, such as when they think the sellers are in hurry.
On the other hand, buyers who do not negotiate may kill a deal even if the price is fair. Authors Mike Summey and Roger Dawson noted to MSN Real Estate that a small concession near the end of a deal may convince buyers they won, even if its value is low.
Asking prices and offers
Pricing a home for sale can be difficult, so wise homeowners will choose their real estate agent carefully and trust his or her advice to help them. One common tactic is to ask for a price slightly above what the sellers are prepared to accept. In some cases, buyers may agree to the asking price without negotiating, in which case the home sellers come out ahead. If not, there is room to negotiate downward without giving up too much. This is so common it is typically expected, so home sellers who do not leave that room may be seen by some as unreasonable rather than straightforward.
Asking for too much may scare buyers away and cause current owners to seem unreasonable, so a balance must be maintained. Having room to negotiate, and demonstrating a willingness to do so, can encourage buyers to follow through on the deal and invest more time and energy into it.
A real estate broker told MSN Real Estate home sellers should not dismiss low offers out of hand. A counteroffer slightly below the initial asking price can demonstrate a willingness to negotiate and a resolve to avoid accepting an unfair deal.
If a buyer offers a truly low price for a home, sellers may feel insulted or
think the buyer is wasting their time. This type of situation is where an agent's help can be most beneficial, since he or she is not personally invested in the home. It could be a ploy to secure a price somewhere between the asking price and offer, or a means to test whether home sellers are prepared to stand firm.
Ultimately, the key to negotiating a deal is the willingness to walk away. If
home sellers become invested in a particular transaction too soon, it can cause them to give away too much and accept poor terms. Sellers should not threaten buyers with ending negotiations as a matter of course, but they must be prepared to wait for a good deal. If they are not, then home buyers are likely to see them as desperate and push for the best terms they can get.