It’s no secret, buyers want to purchase your home for as little as possible and you want to sell your home for as much as possible.
This is generally why it’s always best to utilize a Real Estate Agent to help you sell your home, because they tend to know the strategies to negotiate and the real price your home is worth.
They can guide you when you get a bid and run a CMA (Comparative Market Analysis) for your area so you know what other homes in your area have sold for recently. Let’s talk about a few strategies you can utilize as a home owner and seller when negotiating with a buyer or Buyer’s Agent.
Contingencies
Contingency Offers, Statements or Clauses are often put into a contract by either the buyer or the seller or sometimes both, depending upon the situation. If you, as a seller, have no home yet to move into, you may want to add a contingency clause to the contract. With a contingency clause this allows the sale to go through when and if you find a home yourself. The positive part of a contingency clause is that the sale is still guaranteed as long as you find a home in the required time.
The negative part of a contingency clause is that if you don’t have a home by the time the clause requires you to move out you will either have to find temporary housing until you find a home or lose out on the whole deal. In some cases, depending upon laws and how the contract is written, if you don’t sell due to the contingency clause you will have to pay a certain fee back (generally any interest compounded while the down payment sat in escrow if this applies) along with the down payment itself. You will want to be sure it’s clear and your Selling Agent writes up the contract so you are covered in a manner that you want to be covered.
Another positive aspect of a contingency clause is that it gives you some time to get out of your house. You can use these clauses simply to give yourself time, even if you already have another house in the process of purchase or a house that is sitting on a contingency of you selling your home. Either way it gives you a little breathing room if you need to pack up tens of years’ worth of mementos and collections you’ll discover you’ve collected while living in your home.
As a seller you may also want the contingency clause to offer the option of selling the home within a certain number of days should you have another offer and you’re waiting on the sale of the buyer’s home. This saves you from falling into the trap of the buyer never selling their home in time and then you missing out on a possible sale. Again, your agent should be able to help you decide what contingency clauses are reasonable and fair to you.
Lowball Offers
Unfortunately in a Buyer’s Market like we are currently in buyers are often in the position to negotiate price a little better than if it were a Seller’s Market. There are plenty of homes out there for buyers to buy and fewer buyers qualifying to make the purchase. This means you’re going to be in a very competitive situation to appeal to the buyer; but do you have to take an obscenely lowball offer in order to make the sale? The answer is no. You don’t HAVE to take any lowball offer and you’re in the position to have your agent go back to the buyer and tell them no; but you also want to make a counter-offer. Don’t be thin skinned and hurt by a lowball offer, put yourself in their shoes.
They simply want to make the best deal possible and get your home for the least amount of money possible. That doesn’t mean that they don’t value the home though. If that were the case they wouldn’t be making an offer. The fact that they have an offer on the table, even a lowball offer, tells you they want the house. Yes, they want the house at a steal but the reality is they and their Buyer’s Agent both probably knew when they put in that lowball offer that it wouldn’t be accepted. Again, don’t take it personally; take as they want the house and now you’re ready to negotiate a reasonable price.
You and your agent know what you can sell the home for realistically depending upon everything from the CMA information you’ve received, to the home valuation, to the amount you need to either break even or make money on the deal (depending upon what you’re trying to do). Sit down with your agent and draw up a realistic, even slightly higher amount than you really want for your counter offer. Rule of thumb in real estate is to always counter their counter offer so expect another set of numbers to come back to you. It’s all part of the selling game.
