Selling a house needs prior planning as the process can take several months. After you have prepared your home for selling and found a prospective buyer, the next crucial step is negotiation so that you earn a decent profit. Effective negotiation will help you get the price you want, but one must remember that it is a skill and requires other supporting skills, such as good communication. At the same time, selling a house can be an emotional decision for many. So, it becomes even more necessary to know how to negotiate effectively and not allow emotions to let you settle for a lower price.
Typically, sellers have the upper hand when negotiating the price of property. However, dealing with buyers who try to push back or go overboard can be difficult when you are not prepared or in urgent need to sell your property.
In this guide, we will discuss some useful tips on negotiating when selling a house.
Study the market
Conduct thorough research of your neighbourhood where your house is located. Find out the price trends of similar properties over the past few years. You can approach local brokers in your locality or research online to get the data. Upcoming infrastructure projects like the metro can impact property prices and increase prices.
You can also approach a professional property appraiser who can help you by evaluating the market price. This can be helpful when negotiating with buyers as you can defend your point backed by the report shared by these professionals who follow a systematic method to arrive at a market value.
Set a realistic asking price for the property
Setting a realistic price for your house is the foremost step to ensure a win-win deal. Even when the competition is high, buyers might not be willing to pay more because pricing too high can backfire and turn them away. On the other hand, going too low on pricing will make you lose the money you could use for your next investment.
Use effective communication
Developed effective communication skills. This includes active listening to understand the other party’s needs. At the same, it helps you to express your requirements clearly. Being polite in conversations is also essential because a buyer may walk away from the deal if you sound rude. When communicating with prospective buyers, speak positively and be quick to respond to them. This can help you steer the conversation the way you expect.
Keep emotions away when dealing with prospective buyers
While you may be emotionally attached to your home, if you have decided to sell it and are conversing with prospective buyers, being emotional can hinder your decision-making process. Consider yourself as a salesperson instead of a homeowner to get the right perspective of the situation. At the same time, it is essential to understand what the buyer wants. Recall the time when you were the buyer purchasing this property. Look at this transaction from a financial perspective, where you are just a seller.
Highlight the positive aspects of your property
When negotiating, try to bring the buyer’s attention to the positive aspects of your property rather than the price. This is one way of saying that what the buyer is getting is worth the money they will spend on it. You can even compare your property with similar properties in your neighbourhood or talk about the quality of construction of similar projects by the same builder who has constructed your property. Highlights things such as connectivity, access to employment hubs or educational institutions and amenities such as parking area, lawn, lifts, etc., that may be unavailable in other properties.
Similarly, if your property is more recent construction than other properties in your area, you may be at an advantage when negotiating the price.
Consider the additional costs
Typically, homeowners invest a lot interior design and décor of their homes, which adds up to significant costs. Thus, such sellers are at an advantage when negotiating costs for their houses compared to vanilla house construction known for having basic finishes.
Focus on the buyer’s needs
During your conversation, you are more likely to figure out what the buyer needs. If connectivity and access to offices or colleges is their priority, talk about how close your property is to these areas. If a metro or any road project is coming up in the vicinity, highlight this point. Typically, all homebuyers expect access to social infrastructural facilities, so make sure you talk about these benefits they will enjoy if they purchase your property.
Set a deadline on the counteroffer
When a buyer offers a lower price than what you have set, you are likely to counter it with another offer. This situation usually puts sellers in a binding negotiation, and at this stage, it is considered unethical if one goes and accepts a better offer. Thus, placing a deadline on your counteroffer will force the buyer to act quickly. If they do not accept it, you can move ahead with other prospective buyers who may be willing to pay more. Make sure the timeline you have set is not too short.
Reject the offer when required
Sometimes, sellers use the tactic of rejecting a buyer’s offer outright without giving a counteroffer. Further, to keep the buyers interested, you can ask them to create a new offer. This approach helps create an impression in a buyer’s mind that your property is worth the price you have asked. If they desire to buy the property, they are likely to come with a higher offer.
Be flexible in your approach
If you have identified during your market research that it is a buyers’ market, you may have to relook at the pricing. Further, if there is not much demand and not many prospective buyers are seeking properties in the area, you may have to lower your price than what you initially asked to close the sale. Otherwise, selling your property may take longer, taking up a lot of time and effort on your part.
Evaluate your needs and goals
Assess your financial goals before putting your property for sale. If you urgently need funds, you may tend to accept a lower price. Moreover, if the market looks sluggish and a price cut of 5% to 10% of the final sale price will not impact you, you can finalise the deal and start focusing on the next goals.
Hire a real estate agent
While real estate agents may demand hefty commissions, it is prudent to consider hiring one to close your property sale. Choose an experienced agent who knows the market and has helped finalise many successful deals for sellers in your neighbourhood. Let the agent conduct the price negotiations on your behalf, especially if you are not confident about handling negotiations with prospective buyers.
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Real estate negotiations require a lot of patience as the process may stretch since another party (buyer) is involved. Make sure you are prepared for this stage of your property-selling journey by doing thorough market research. You must be equipped with facts and figures to support your point during negotiations. Moreover, timing is extremely crucial. Consider the market trends, seasons, etc., which will influence property purchase decisions. Besides, adopt a win-win mindset and negotiate accordingly so that both parties are satisfied with the deal.
FAQs
How to negotiate price as a seller?
Make sure you are aware of the market value of properties in your area. Discuss with your broker and highlight the positive aspects of your property to potential buyers.
When should you leave a property price negotiation?
If you find that the buyer is not submitting a lower offer or if it is a sellers’ market where you can wait for more potential buyers, you can leave the negotiation.
Is there an asking price for property sellers?
Sellers must have a fair understanding of the current market trends and know their property’s market value. Typically, listing slightly higher prices is the norm since buyers will negotiate the price down.
Do property sellers give a counteroffer?
Generally, a seller accepts the offer if the price is acceptable. However, they may be open to negotiation and come up with a counteroffer.
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