Getting to the Handshake: Negotiating the sale
Friday, July 25th, 2014
Issue 30, Volume 18.
Do Your Homework:
Understand what type of market you are in: A sellerís market will usually have lower inventory with fewer days on market, rising prices, active buyers and, in some cases, multiple offers. A buyerís market will have high inventory with longer days on market and stagnant or decreasing prices. Both will have an affect on your negotiating position and who has leverage in the situation.
Research previous comparable sales and active listings in your preferred area. Research the difference in each homeís amenities that might affect pricing (pools, flooring, home improvements, etc.) Determine what neighborhood factors add value or convenience: proximity to schools, parks, shopping, freeway access for commuters, cul-de-sac location for smaller kids to play in, clean/quiet area, pride of ownership, neighborhood activities, etc.
Research the homeís sales history, time on market, price changes, taxes, HOA dues, property inspection and disclosures. Are there any offers on the table or expected?
Ask the Right Questions:
Determining motivations, showing interest and uncovering the homeís history (repairs, improvements, etc.) are important. If you can, ask neighbors questions about the sellers, the home, the neighborhood. The more knowledge you have, the more confidently you can negotiate.
Create the Right Environment:
Despite having different motivations, the goal is the same: the successful transfer of the home. Establish rapport or common ground and constantly reinforce trust. Common ground could include similar jobs, college backgrounds, interests, hobbies, childrenís needs, experiences and more. A pre-qualification letterlets sellers know you are serious buyers and helps establish trust.
Avoid stirring up negative feelings. If you are the buyer, talk openly about the homeís features, repairs and improvements, but donít run down the home by pointing out faults and deficiencies.
Complimenting the home, decorations and landscape will let the seller feel good about your interest.
Adjust to special needs:
Older sellers may move at a slower pace; job relocations or sellers with a contingent offer on their next property may require a faster close.
Use the knowledge that you have gained to negotiate. Timing (length of escrow, occupancy date, post-sale lease-back); repairs; security (home warranty, alarm systems); amenities (appliances, furniture, artwork, garden tools, recreation equipment) can all be bargaining chips. Removal of contingencies and payment of closing costs can also be powerful bargaining tools. Creative incentives (resort stays, vacations, etc.) have also been used to close sales.
Negotiations are about give-and-take. Typical seller mistakes include getting angry or emotional about a low offer, overpricing an aging property, and not being willing to negotiate.
Donít take a low offer personally; it is part of a negotiating strategy. Find out the reason for the low offer. They may be using inaccurate comparables, investors who low-ball, or buyers trying to buy above their price range.
An aging property may need repairs, repainting or updating. Sellers who have comfortably lived in a home for years may not see the home the same as buyers who have seen newer or refurbished homes.
Before summarily dismissing an initial offer, sellers need to be willing to negotiate and should ask questions to determine what the buyer wants. The offer means that the buyer is interested.
Remember the goal is the same: the handshake on the successful transfer of the property!
The Valley News has tightened its' policy regarding comments.
While we invite you to contribute your opinions and thoughts, we request that you refrain from using vulgar or obscene words and post only comments that directly pertain to the specific topic of the story or article.
Comments that are derogatory in nature have a high likelihood for editing or non-approval if they carry the possibility of being libelous.
The comment system is not intended as a forum for individuals or groups to air personal grievances against other individuals or groups.
Please, no advertising or trolling.
In posting a comment for consideration, users understand that their posts may be edited as necessary to meet system parameters, or the post may not be approved at all. By submitting a comment, you agree to all the rules and guidelines described here.
Most comments are approved or disregarded within one business day.
The Village NewsAnza Valley OutlookFallbrook.orgSourcebookPDF VersionCoupon CornerSign up for iNewsEarthquake Info
357 Medical marijuan...
265 Arrests now numb...
175 Authorities seek...
168 Man hit, killed ...
125 Mother-in-law ar...
122 Camp Pendleton a...
121 Authorities dist...
121 Bikers steering ...
118 22 suspected ill...
117 Double fatality ...
114 Murrieta Mayor A...
114 Temecula mosque ...
110 Governor Brown s...
107 Bonsall man (lon...
105 Preliminary hear...