How to Negotiate and Win—When Selling Your Own Home

Reality, not fantasy, must guide you when you negotiate the selling price of your home. You must know what others have recently paid for similar houses in similar neighborhoods and you must understand the dynamics of the local housing market. Avoid negotiating within a vacuum because most buyers are somewhat sophisticated about the local real estate market and will know a fair price. They do not care about your emotional ties to your home, what you paid when you bought it, or how much you spent for improvements. Home buyers only care about whether your home will meet their needs and if they are getting good value for their money.

Your chances for success are much greater if you have an appraisal and home inspection report completed before beginning to negotiate. These reports will support your fair asking price and remove any doubts that the buyers might have about the condition or value of the property. The more facts that you have to support your side, the greater your advantage. Also remember, if your price is unreasonable, the appraisal and home inspection reports will reveal the truth, to guide you back to reality. If you are working with a mortgage company like Guaranty NorthEast, the appraisal could then become part of the buyers mortgage application file, which will save time and allow a quicker settlement.

You must understand your potential buyer. Is this a first purchase (where they are scared and unsure) or do they consider themselves seasoned real estate investors (who were educated with "get rich quick" books, tapes, and late night television)? The more you know, the greater your advantage.

Are they qualified to buy your home? Unless you have a cash buyer, you should not begin to negotiate with anyone unless they have been pre-approved for a mortgage by a reputable mortgage company.

You must also know what financing options are available for your property. If your buyers can't get a mortgage they can't buy your home, regardless of the price.

Your home will get the most activity when it is first introduced to the market. This means that you should carefully consider all offers even if they come quickly. Early offers are usually the best offers, so do not reject them hoping that a better one will come later—you just might miss an opportunity. Remember that your objective should be to quickly sell at a fair price, so that you can move on with your life.

A typical negotiation will usually fall within a range of ten percent of your asking price. For example, the buyer will start by making an offer approximately ten percent lower than your asking price. You should then make a counter offer about three percent below your asking price, and if the buyer is serious he or she will probably counter the counteroffer. This will go back and forth, until all of you agree to the terms. It is important to note that the first person to make the largest concession will lose the negotiation.

So do not quickly give in to a low offer, or give a large discount. If the house is priced realistically (which you should have already determined with an appraisal and home inspection), negotiate closely to your asking price. Give less and less with each counter offer. Do not lose your focus on the "net price" that you expect to receive from the sale; this is your "bottom line".

Be flexible when you negotiate. You want a quick, hassle-free sale, don't you? Do not limit your negotiations to just the selling price of your home. You can also negotiate items such as the settlement date, whether you will pay closing costs or provide financing (if possible), sales contingencies, whether you will make repairs or improvements, and if you will include appliances or personal property. You can offer anything that might have value to the buyer. So, consider all options and be creative.

Control your emotions and ignore statements like: "This is my final offer", or "Take it or leave it". They are meaningless. If someone is truly interested in your home, and you are being reasonable, they will continue to negotiate.

Keep focused on your goals, but also try to understand the buyer's goals. Consider your positions relative to the current market and make any necessary adjustments to your approach. Efficient negotiation is based only on reality—not fantasy. An overpriced home offered with the wrong terms will remain an unsold home.