“How to Negotiate the Highest Price for Your Home”
The single biggest Issue on the minds of
most home sellers when selling their home is
how to achieve the highest sale price, and yet most homeowners feel disadvantaged and ill-equipped to achieve this goal.
Pricing a home is an imperfect science to begin with, and market factors can cause large swings and so can the skill of the person responsible for negotiating.
However, negotiating effectively doesn’t have to be as difficult or scary as you would expect. Like anything else, if you have a proven system to follow and know the signals and the language you can successfully cause the tables to turn in your favour.
4 COMMON NEGOTIATING MISTAKES MOST HOMESELLERS MAKE
1. Saying too much during an offer.
The first and second rules of effective negotiating are to a) know what you are legally required to divulge and b) don’t say anything more than this in front of someone who is not completely representing your interests. It’s very important that sellers think through every point that is going to be made … before it is spoken to those on the other side of the table. What you say can and will be used to your opponent’s advantage, so don’t say anything more than you have to. For example, if you are reviewing an offer in front of both your representative and the buyer’s representative, and you mention what your “bottom line’ price is, you better count on the fact that the buyer’s representative will pass this information on to your opponent and you’ll never stand a chance of getting higher than this. Remember that you don’t have to say anything in front of the buyer’s representative. They are representing the buyer’s needs, not yours. It is quite acceptable to ask the buyer’s representative to leave before you discuss details of the offer with our representative.
2. Failing to take their time on the counter offer
Many sellers fell pressured to respond immediately to a presented offer. Remember that negotiation over price is a critical issue, and it is quite within our rights to take the time you need to respond effectively.
You are certainly within your rights to request a private consultation with our representative and away from the buyer’s representative. However, even more than that, you may also want your legal council to advise you on the next steps. If you find yourself in this situation, request the time to meet with or fax the offer to your lawyer. A little bit of space and an the advice of an objective and knowledgeable third party, will certainly lead to clear thinking and a more effective decision.
3. Giving away too much
Many sellers feel that they have to throw in home fixtures such as appliances, lighting, draperies, etc. this is not the case. If these items are not specifically detailed in your listing you are not at all obligate to give them up if you don’t want to. Holding these items back until late in the negotiation process is often an effective way to arrive at a price that both seller and buyer can live with. Used this way, these items can become effective negotiating tools. If you give them away too early, you lose any potential leverage. Remember, there is nothing stipulating that these items even have to enter into the negotiating process at all. Unless they are specifically itemized in your listing, you can treat them entirely outside your home sale.
4. Not understanding Multiple Representations
Multiple Representations exists when the offer for your home comes from the same real estate brokerage as the one you hired to market your home, whether it be your personal sales representative or another representative of the brokerage. (I.E. both you and the buyer are represented by the same brokerage.)
When multiple representations exist, both your representative and the buyer’s representative are legally required to disclose certain information pertaining to your home. In Ontario, real estate brokerages must disclose information it knows about defects and deficiencies, issues about the title, issues about the neighbourhood and recent market activity. Brokerages are not to speak about the price other than what is on the listing agreement or in an offer nor are they to speak about the motivation to buy or sell the property. If you don’t want the buyer to know what price you are willing to accept, or that you’ll include appliances or other items, don’t disclose the information to anyone until such time you are prepared to state your position in the form of an offer.
At the beginning of your relationship with a real estate brokerage, the sales representative should make you aware of the different relationships the brokerage may have with buyers so that you have a clear understanding of this important issue.