Feb 94 min
As your Realtor, I guide you through the negotiation process. Just as you have me in your corner, the buyer also has their own agent, and I bring a wealth of knowledge about popular negotiating tactics. I'll keep you informed about any non-standard elements in the offer and help you navigate the complexities of the contract.
When you receive a viable offer, it's time to engage in negotiations. In a seller's market, where your home is fairly priced, you can counter with your original list price or reject the offer, prompting the buyers to resubmit. This establishes your firm stance on pricing. If they're serious, they'll return with a stronger bid, putting you in a more favorable negotiating position.
If you choose to counter-offer, make it time-sensitive to avoid prolonged negotiations. You'll retain the flexibility to consider other offers that may come in.
Buyers may seek concessions, such as having you cover part of their closing costs. If you agree, work these costs into the overall home price, ensuring a fair deal for both parties. Discuss the negotiation process with me beforehand, so you're well-prepared and know the answers to the following questions:
What's the minimum selling price you'd consider for your house?
Do the current market conditions justify your counteroffer?
Is a full-price counteroffer the best strategy?
Which offers, conditions, contingencies, repairs, and closing costs are you open to negotiating?
Tips for Successfully Negotiating a Home Offer
While I'm here to guide you through the details of the offer, the decision to reject, negotiate, or accept an offer is ultimately yours. It's essential to have some understanding of negotiation.
Start by knowing your market. Even if you've already discussed comparable homes in the neighborhood with me, reviewing them again is a good idea. Markets can vary, so ensure you're aware of your home's current market value.
Exercise patience. If your home is priced fairly, resist the urge to immediately accept the initial offer. The first offer is likely below the buyer's actual price limit, and they might be attempting to negotiate your asking price. Trust me to assist you throughout the negotiation process.
Remember that negotiation continues beyond agreeing on the price. You may find yourself negotiating during the appraisal and inspection process as well.
What Is a Kick-Out Clause?
When buyers add contingencies to their offer, it's a common practice. These can include the financing contingency (pending approval of the buyer's home loan), inspection contingency (contingent on the home inspection results), and appraisal contingency (dependent on the home appraisal results). While these contingencies usually don't disrupt the sale, the home sale contingency is a different story. If a buyer needs to sell their home before purchasing yours, they'll include this contingency, essentially taking your home off the market. If they can't sell within the specified time, the sale falls through.
Accepting an offer with a home sale contingency might lead you to consider adding a kick-out clause. This clause allows you to continue showing your home during the contingency period (typically between 30 and 90 days). If you receive another offer during this time, you can notify the initial buyer, who must proceed with the sale. If they can't finalize the purchase, the agreement becomes void, enabling you to move forward with the new offer.
The Appraisal:
When faced with a home appraisal that falls short of the agreed-upon price, several options are available. The straightforward approach involves lowering the sale price. Alternatively, you might consider a middle ground by sharing some of the additional costs with the buyer.
A low appraisal is not favorable for them either, and they might be open to obtaining another appraisal. Given the subjective nature of home appraisals, different appraisers can produce varying figures, making this option worth exploring. Regardless of the chosen path, negotiating with the buyer becomes essential to sustain the momentum of the sale.
The Inspection:
When presented with a list of repairs by a home inspector, negotiations often come into play. Minor repairs are typically open to negotiation, allowing you to discuss with the seller which items to address and which to leave untouched. However, if the inspection reveals a significant issue, the buyer may propose negotiating the sale price.
When deciding between handling repairs yourself or adjusting the sale price, consider the repair cost as a percentage of the overall sale. If the repair amounts to less than five percent, taking care of it personally may be viable. For more substantial repairs, constituting a higher percentage (e.g., 10 percent), reducing your offer could be a practical choice. This decision factors in not only the repair expense but also the time required for a more extensive fix. Lengthy repairs can delay the moving process, making a lower offer more appealing.
No Offers:
In cases of numerous showings but no offers, it may point to a pricing problem. Positive feedback on the property, coupled with a lack of offers, suggests potential overpricing. The absence of even low-ball offers indicates that buyers find the price intimidating, hindering negotiation attempts. I am cautious about multiple price reductions, as it may raise suspicions.
If offers are consistently too low, exploring buyer incentives could be beneficial. These incentives, ranging from including furniture or window treatments to sharing closing costs, can attract more buyers. Some buyers may have substantial credit but limited cash, and covering closing costs might ease their financial burden.
Once my clients are content with an offer, it's time to gear up for closing.
AMANDA ALLEN, REALTOR
GRI-SFC-MRP
(903) 603-0648