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Negotiating to
sell your home
From InmanWiki
If you are fortunate enough to be selling your home in a fast
market where there are many buyers vying for a few homes, you
may think that you don't need any advice on negotiating the
deal. But in a seller's market, it can be even more critical to
negotiate carefully, especially if you are considering multiple
offers. In a buyer's market, when you may be glad just to have
an offer, you may think that you have no bargaining power. But
even in that situation, it's important to negotiate and avoid
making unintended concessions.
In either situation, it pays to understand the dynamics of and
recognize that the best real estate transactions are those in
which the seller and buyer both believe they got the best deal.
Why deals fall through
Negotiations gone awry are a major cause of failed real estate
transactions. Buyers can become frustrated by too many
counteroffers and sellers may not be able to accept a realistic
price. If communication breaks down, then the deal is destined
to failure.
Try to avoid falling into these negotiating traps:
Moving too fast: It can be tempting to push negotiations through
quickly, especially if you need to sell for financial or
relocation reasons or if the market is slow. Take the time to
read offers carefully. If a lower offer has been made because of
needed repairs, make sure that the buyer's estimate of the cost
of those repairs is accurate. It may be better to make the
repairs rather than accept a big price cut. If so, go back to
the negotiating table.
Letting emotions rule: Remember, the house you are selling is a
commodity. Don't take offense at buyers' comments about the
landscaping or decor, especially when they make a lower offer
based on those factors. If the market is not in your favor, you
may have to offer a decorating allowance or accept a lower
price. If it is a seller's market, counter with a full-price
offer. In any case, don't avoid dealing with a buyer because
you've been insulted.
Reluctance to counter: Few sellers will accept an offer without
amendments. Countering an offer is a time-honored tradition in
real estate. Countering means that you come back at the buyer
with a different price or different terms. Remember, negotiating
to sell a house is a give-and-take process. If you fail to
counter offers, you may not connect with a buyer. Also, make all
counteroffers in writing to avoid misunderstandings and continue
negotiations.
Bad-faith bargaining: Whether you are a seller or a buyer,
engaging in bad-faith bargaining not only can result in a failed
sale, but possible legal action. If you aren't serious about
selling your property--that is, you won't accept anything but an
overpriced offer--you probably shouldn't be in the market. What
you want to avoid as a seller is a bad-faith buyer. Such a buyer
can waste your time by making unacceptable low offers or
engaging in endless negotiations. Even worse are bad-faith
buyers who misrepresent their ability to purchase your home and
take you off the market for several weeks before their credit
report or failure to secure financing nullifies the contract. If
you have any qualms about a buyer's means, ask for a preapproval
letter from a lender.
Failure to meet deadlines: Time can be an ally and an enemy in
negotiations. It is vital that both sides meet deadlines. But
this doesn't mean that you can't be flexible. A long line at the
lender may hold up a buyer's financing. Make sure that your
closing date allows for contingencies that may take a longer
time than usual to satisfy. Also, make sure that the buyer or
the agent asks for extensions promptly so that you can make any
adjustments.
Hold the contingency
One reason home sellers like contingency-free offers is that
they minimize the possibility of a sale falling apart. But most
contingencies in a typical purchase contract benefit buyers,
such as contingencies for financing and inspections. Financing
and inspection contingencies don't often result in a sale
falling through. But avoid contingencies that leave you little
or no room to maneuver. If the buyers want to make the sale
contingent on the sale of their current home, make sure that the
contract includes a release clause that will allow you to back
out of the first contract if an offer without contingencies is
presented.
Do-it-yourself deals
Most agents will manage negotiations in consultation with you.
You also may want to consult a real estate lawyer in the
process, especially if the purchase contract contains complex
seller-financing terms. If you feel comfortable negotiating the
deal, you can help write the counteroffer or amend the initial
purchase contract, as well as participate in face-to-face
negotiations with the buyer's representative. Before you jump
into negotiating your own deal, however, make sure that you are
prepared to discuss your property's weaknesses or whether you
can consider a lower price without bristling. Remaining calm and
focused is the best modus operandi in negotiations, whether you
are a seller or a buyer.
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