Every home seller wants to sell his or her house at a price that is profitable for himself or herself to reinvest the proceeds in other investment options or to meet a sudden emergency. For this purpose, a seller aims to get the best price for his or her house by fixing the asking price appropriately.
This price-fixing exercise is undertaken after extensive research on the prevailing conditions in the market, appraising the value of the house, comparing such value with other similar houses in the neighborhood and seeking information on the prevailing property and tax laws. However, the fulfillment of a seller’s objectives is not easy for a homebuyer’s objectives for purchasing a house at a bargain directly clash with the seller’s objectives.
Hence, the parties to a property transaction undertake negotiation to resolve the differences and iron out any discrepancies between them. This article seeks to highlight the negotiation tactics that can be employed by a seller to sell his or house for gain.
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Negotiation tactics to be employed for selling a house
When out to close a deal on favorable terms, the seller needs to take into consideration the different stages of a property transaction like the search for buyers, preliminary checks, negotiation process, the closing process and the registration and transfer of property to the buyer.
The seller can control the course of the transaction during the negotiation process and set it on a course that is favorable to him or her.
Here are some scenarios that a seller may encounter where s/he may have to engage in negotiation to see his or her way through.
- A seller may receive numerous offers from different buyers for the property
- The seller may receive an offer lower than the asking price from the buyer
- The buyer may ask the seller to undertake the repairing costs of the house before the transfer of possession of the house
- The seller receives questions that require a discussion about the terms of the agreement after the buyer conducts the home inspection.
A seller requires preparation before engaging in negotiations with a buyer. You need to figure out the objectives you want to achieve and crystalize them in your mind. You may appoint a real estate agent to represent your interests in a negotiation process, but you need to be aware of what is going on to finally take the right decisions.
- Under conditions where you have posted details of our property on sale on different trusted property websites, you may receive several offers from interested buyers. You need to figure out which buyer is beneficial for you.
- The quantum of money they are willing to offer is the primary indicator. But if there are multiple offers which offer the best price available for your house, you need to see in what method of payment they are adopting.
- If the buyer is offering cash and another requires a home loan to purchase the house, there is no doubt the preference needs to be given to the one who gives cash. Funds from home loans are subject to lender sanction and are bound to be realized after some delay, whereas cash payment is realized immediately.
- Due to this immediate payment of cash, a buyer may seek a concession or discount from you in the price of the house.
- A slight concession from your side is permitted considering the present value of cash as compared to its declining future value. However, do not accept a major cut and insist on realization as soon as possible to close the deal.
- There are times when you receive an offer price from a buyer that is lower than your asking price. When you receive an offer like this:
- If the offer comes before you make your asking price known, you can counter with your asking price
- If the buyer makes the offer after becoming aware of your asking price, you can counter the offer price by stating a price between your asking price and the offer price.
- You can choose to stick to your asking price but make concessions to the buyer like accepting to partially bear the expenses of any repairs needed for the house or giving the buyer some time to make the payment. This third alternative shows your firmness on your goal but your willingness to make concessions for a win-win situation.
- If you find the buyer insisting on you bearing the repairing costs of the house before the transfer of ownership and possession from a seller to the buyer as a part of the property sale agreement, you better start negotiating.
- This could result in some serious financial outflow for you if the buyer finds “major” defects and wants you to bear the cost of these repairs.
- You can negotiate on this matter, seeking to reduce your liability to a few minor but significant repairs as a form of compromise. If the buyer does not agree, you can try to convince the buyer to apportion these expenses and bear them on a pro-rata basis.
- It is best to negotiate and discuss the terms and conditions of the sale agreement with the buyer to discern any differences between you and the buyer and sort out these differences before they become disputes later on. Resolution of disputes in court or by arbitration may be a costly affair. It is best to iron out these differences in an informal way and record details of the transaction in writing for record and evidentiary value.
Be you a buyer or seller, negotiation can help you achieve your goals in a transaction if you seek a win-win situation as the conclusion. To sell residential property, the seller needs to persuade the buyer to purchase the property at a mutually acceptable value that benefits both parties. Before getting into negotiation with the buyer, the seller needs to prepare by gathering information on the market and the prices for which similar properties were sold to estimate his or her asking price.
The seller needs to have his or her goals crystallized in mind to engage in negotiation activities with the buyer. If the goals are clear in the mind then half the battle is won for parties are prone to compromise on these goals while conceding certain benefits to the other party while negotiating. In a negotiation, you need to have your feet firmly planted on the ground but when you find the current against, you need to be flexible enough to give minor concessions to the party while keeping the overall plan in mind.