In today’s fifth and final installment into our latest series, we’ll be discussing the last component of earning more money for your home: Negotiations.
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There are four strategies that I recommend all sellers employ when it comes time to negotiate a deal for their home sale. These strategies are the last piece of the puzzle in earning 18% more for your property when it comes time to sell.
1. Encourage preemptive offers. This strategy entails capturing interested buyers before your home technically hits the multiple listing service by marketing it as “coming soon.” Typically, it’s advisable to put a list price that’s higher than your expectation at this point in the process. I can tell you from experience that because of our low inventory, buyers are tired of getting beaten out and will be willing submit a preemptive offer that is at or above your price expectation when you follow this strategy.
2. Price for multiple offers. If you didn’t earn the price you’d hoped for during the “coming soon” phase of your listing process, it’s time to price your home in a way that represents a great value and encourages multiple offers. When buyers see your listing as an exceptional deal, they will be more likely to compete over it. This will ultimately drive up the price and help you net more for your home.
3. Determine your best alternative to a negotiated agreement (BATNA). More simply put, this strategy essentially serves as the “Plan B” you should fall onto in the event that your original negotiated agreement is somehow compromised. This will ensure that if anything unexpected happens during the course of the deal, you will still have an idea of how you’d like to proceed.
4. Be creative. If you’re close to getting the results you want but just aren’t there yet, you should consult with your agent about possible solutions. As an example, we had a seller recently whose minimum bottom line for their home was $1 million, but whose buyer had a loan approval that was maxed out at $990,000. To compensate for this $10,000 disparity, we advised the seller to credit the buyer with $5,000, with the understanding that the credit was to be explicitly dedicated toward lowering the buyer’s interest rate on their loan. The buyer was able to lower their interest rate from 4.25% to 4%, which raised their mortgage approval up to just over $1 million. As a result, the buyer was able to secure the home and the seller was able to net their desired price. Having a skilled negotiator who can think outside the box will be very helpful for you in any real estate scenario.
Ultimately, the bottom line is that doing many little things right throughout a transaction can make a big difference in your success.
If you have any other questions or would like more information, feel free to give us a call or send us an email. We look forward to hearing from you soon.
