Negotiating Buyer Offers
Selling your home is a major financial transaction in your life, and negotiating buyer offers may be the secret to get your best price. It is rarely as simple as accepting an offer and having it paid out to you. Negotiations can go back and forth for weeks before you and the buyer are finally ready to finalize a deal. So what is the best way for negotiating buyer offers?
When dealing with counter-offers, make sure you are prepared and understand the strategies that can be employed when negotiating buyer offers. It’s important to understand counteroffers, which will help you get top dollar for your home. It will also have a significant impact on how much money you walk away with!
Negotiating Buyer Offers
What to Expect When Selling Your Home
When you put your property on the market, you should have a pretty good idea where it stands in the market. You’ll know this from working with a knowledgeable real estate agent. They will have taken specific factors into consideration to obtain a smart and fair list price and will have determined what kind of market you’re selling in. Will your home attract attention through your location, features and conditions?
But once you finally list your home, all bets are off. Buyers may soon begin the dance of putting an offer on your home that isn’t exactly what you asked. This is when you will want to use these skills when negotiating buyer offers.
There are times a buyer’s agent may contact your agent. They want to see if you are firm on price, whether you have had any other offers and when you are looking to settle. Overall, they are looking for leverage before putting in that first offer. Make sure you hire a great agent that knows how to handle these prodding questions. The buyer is potentially looking to make an offer well below your asking price. This can determine whether you sell for thousands less or get what you expect when you close. So, let’s get you prepared!
What is a Counter-Offer?
TheBalance.com does a great job in discussing counter-offers and how they are created by a home seller after a potential buyer has submitted an offer to purchase. Often, counter-offers inform a buyer that they are willing to negotiate and will accept their offer, subject to a few changes. These can address any of the following items:
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Asking for a higher price
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Increasing the size of the earnest money deposit
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Refusals to pay for certain reports or fees
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Changing the closing date
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Excluding or Adding personal property from the sale
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Modifying contingency timelines
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Fixing specific home items
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Early release of deposits
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Fixing an agent mistake
For example, perhaps you didn’t offer appliances in the original sale price … and now you have a potential buyer interested in keeping all of the appliances in the home to finalize the sale. After consideration, you agree to this, with perhaps another small amendment. Your agent would now send the buyer’s agent a counter-offer, with the changes above being reflected in the contract.
When negotiating buyer offers, always look at the details of the agreements. For instance, time is often of the essence. Counter-offers contain expiration dates, just like purchase offers. This means that you can’t accept another offer while the buyer is deciding whether to accept your counter-offer. It also compels the buyer to make a decision. This way, you can either get your home under contract, or move on to the next potential interested party.
Just remember that while a counter-offer is outstanding, your home is effectively off the market. Sometimes other potential buyers won’t submit an offer if they know a negotiation is underway. If the deal falls through, though, you’ve suddenly added days onto how long your home has been on the market. The more days your home has been on the market, the less desirable it appears, even if it was not of your own doing.
How To Present a Counter-Offer When Negotiating Buyer Offers
Once the buyer presents an offer to you that isn’t on-point with your original listing, you generally have one of three options when negotiating buyer offers:
- Accept the new offer as presented
- Decline the Offer and tell them exactly why you are doing so
- Offer the counter-offer to close the gap between what both parties want
Some buyers may accept the new counter-offer that has been given, or they may choose to counter the counter. You also have to be prepared that they may elect to just walk away. Be prepared and know the possibilities so you and your agent can act accordingly.
Knowledge is Power When Negotiating Buyer Offers
Knowledge is power in negotiations! Therefore, have your agent attempt to glean as much information about the buyer as they can!
Negotiating buyer offers requires diligence, patience and understanding. Especially when it comes to something as emotional as a home sale! Know the condition of your home. If any problems become known, counter-offers often may not come until the item is fixed and taken care of. Fix the leaky roof or anything else that may be found during an inspection or an appraisal.
With this in mind, it may be best to have a home inspection before putting your home on the market. This will help you be prepared and know what you may be in for if someone is asking for a repair on your home before they buy it. Selling your home with known issues can put you at a disadvantage when negotiating buyer offers!
Responding to Additional Counter-Offers
Make sure your agent reviews every aspect of a counter-offer that comes in. You always want to establish a baseline BEFORE negotiations for when you will walk away from a buyer. Do you have a price point in mind for how much you want to make off the sale? When things start getting murky in counter-offers, make sure you are evaluating items with a clear head and not your heart.
You may not want to see certain contingencies in the offers you receive. As an example, you may not want to see an offer contingent on the buyer selling their other home. You may be perfectly fine declining this offer, as it will be easy for another buyer to come along in a hot seller’s market that may not have this issue to slow down the sale of your home.
In a seller’s market, you are likely to receive multiple offers and will have the ability to pick and choose what you may or may not be willing to negotiate.
Perhaps, you will reject the counter-offer all together. It may be a bit extreme and can seem slightly risky, but if they’re really interested, they’ll submit a new offer that is more in-line with what you are looking for. It also sends a message that you know what your property is worth!
This is also particularly useful if the property has only been on the market for a short time, of if you have an open house coming up.
Communication with your agent is also key. Let them know what you want from the sale and never be afraid to walk away if things go south. When negotiating buyer offers, make sure you take a measured and informed approach at all times!
Mistakes To Avoid
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Leave Emotional Responses and Questions to Yourself.
Let Your Real Estate agent deal with it!
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You Don’t Have to Get Everything When Negotiating Buyer Offers
Pick your battles when sifting through counter-offers and negotiations. Insisting on certain things may not get you very far, depending on market conditions. The main objective is to sell your property, so if things don’t go exactly your way with a closing date, for example, it’s always best to remember the big picture.
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Don’t Necessarily Despair on a Low-Ball Offer
While it may be a bit insulting to you to get a low-ball offer from a potential buyer, staying in communications through your agents isn’t a bad thing. While you clearly will not be accepting the low-ball offer, perhaps there is a more even counter-offer that would be attractive to both parties. Simply stay in touch, unless more attractive offers have come in. Remember, the best way to avoid low-ball offers is to price your home right.
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Don’t Be Rude
You want to have a good feeling about a potential buyer and creating tension is not going to help things move forward in a positive manner. It can make a big difference to hear someone’s voice and get a feeling that they are a nice person!
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Don’t Hire Just Any Real Estate Agent
Make sure you pick an agent you trust. This is a huge financial decision and if you don’t feel like you can trust what your agent is telling you or how they are handling your negotiations, you will be in for a long and painful journey. At Zipi Wiki, we can help you immediately identify the top performing agents in your neighborhood. We analyze real transaction data and expertly interview and prescreen qualified agents. Many areas have thousands of agents to choose from, and we narrow them down to the 3 best agent matches for you and your home type.
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Don’t Refuse to Pay Closing Costs
It seems like it has become standard for buyers to ask sellers to pay for their closing costs. Buyers are often feeling cash-strapped with having to come up with a down payment, moving expenses, redecorating, buying furniture and appliances, and more. Some buyers may not even be able to afford closing costs without this contingency in a counter-offer. Closing costs can be about 3% of the purchase price.
However, while many buyers may not have the cash, they could often add a little to their loan amount. You may want to counter with a willingness to pay the closing costs, but at an increased purchase price. Buyers may not see that when they ask a seller to pay their closing costs, they’re lowering the home’s sale price. But with the addition to the purchase price, everyone wins.
You need your closing costs supported. This is necessary for the home to appraise. Otherwise, you’ll have to lower it back to the original amount later or the buyer’s lender won’t approve the sale.
At the end of the day, the home needs to show well, be in excellent condition and have something that competing properties do not. When negotiating buyer offers, you want to have the upper hand as the seller. You want to keep buyers interested and in a good seller’s market like we have right now, inventory has a hard time staying on the market, period! But with these items above in your arsenal, along with a trustworthy agent, you’ll be able to successfully negotiate buyer offers and sell your home successfully!
About Zipi Wiki
If you enjoyed this post, set yourself up with an agent that has mastered this strategy as well as so many more. At Zipi Wiki, we do one very important thing. We match you up with the best agent for you. There is no other service that can find more qualified real estate agents for selling your home than Zipi Wiki. We wish you the very best with your home sale, and hope your next abode is your best one yet!