Most resources about real estate negotiation focus on getting the buyer the best deal possible. But, if you’re the seller’s agent, you’ll need to provide guidance tailored to what is most important to them.
If things were always perfect, both buyer and seller would feel the transaction was exactly what they wanted. But if perfection is out of reach, there are tactics to ensure both sides walk away happy. As the seller’s agent, here are few things you can help them consider before negotiations start:
Know their bottom line
Before your client even puts the home on the market, you both should have a firm understanding of how much your client must make on the transaction. That number will drive every step of the process and guide how firm or flexible you can be in negotiations.
Keep emotions out of it
Sellers are invested in the home they’re selling, whether it’s a builder who knows the care and craftsmanship that went into construction or a homeowner who knows all the love that went into a home. The best advice you can give your seller is to avoid emotions when making decisions. Negotiations are business transactions and will go more smoothly if logical thinking wins out over sentiment.
The low-ball isn’t the end-all
Buyers are looking for the best deal possible, so it’s not unusual for them to start with a low offer. Before your seller gets insulted about the figure, advise them to counter offer. Selling and buying a home is a process and that low offer only needs to serve as the opening in the process. Offers and counteroffers allow both buyer and seller to come to a mutually acceptable agreement.
More than just price
While price is likely the biggest factor in negotiating a sale, it isn’t the only one. Agreements about repairs, closing costs or other concessions can be the factors that make or break a deal when there is no room to adjust the price.
Know what it means to the buyer
Buying a home might be the biggest financial transaction of the buyers’ lives, so make sure you understand how much impact an extra $5,000 or $10,000 in price will impact their budget. A great tool to help put your buyers’ payment in perspective is the mortgage calculator at realtor.com.
Know the market
What are the conditions like in your local real estate market? Is there a surplus of homes for sale? A shortage of homes in the ideal price point for buyers? Knowing what is happening in the real estate scene in your location can help you know how firm you can hold on price or other factors, as well as how many other options your buyers have, indicating how flexible you must be to close the sale.
Realty Dynamics, a Wisconsin firm, recommends these tips for negotiating in buyer’s, seller’s and neutral markets:
- Buyer’s market:
- Set your price at or near the figure at which you’re willing to sell.
- Be flexible on buyer terms, such as cost concessions and closing date.
- Seller’s market:
- Hold firm on your price.
- Look for “clean” offers that are simple and straightforward.
- Neutral (or balanced) market
- Patience is key and advise your client to expect a back-and-forth counter offer phase that will likely take longer than in a buyer’s or seller’s market.
- Be as flexible as possible on price and terms without compromising on your client’s needs.
Be ethical and be friendly
Ethics should be the guiding principle in all sales and negotiations. Trust is the bedrock of every transaction, so make sure you are conducting all talks with buyers with integrity.
Likewise, don’t turn negotiations into an adversarial relationship. Both your client and the buyer want the same thing — to arrive at a deal for them to buy the home. Negotiate in a non-confrontational manner and you’re more likely to arrive at a mutually beneficial agreement. Friction might happen, but it doesn’t have to be ugly. Treat your potential buyers with respect and they will appreciate it.
Done right, negotiations and a sale can leave all parties feeling pleased.