One of the most important steps in preparing to sell your home is figuring out your list price and determining how much time you have to sell. You also need to consider your negotiation strategy. Here are some tips that will help you plot out your best route prior to listing.
Know Your Bottom Line
Once you’ve determined a list price, your next step is to decide on your bottom line, which is a firm number you won’t go below. If a buyer offers anything below that price, it’s no deal unless they’re willing to negotiate up. When you determine this number, make sure you take expenses – such as closing costs, taxes and fees – and the amount of your outstanding mortgage into consideration.
Also, consider the current state of your market and how much time you have to sell. If your market is hot and competitive, you may sell quicker and get more offers, which meands you can set a more aggressive bottom line. Same goes for having a flexible timeline. If you can wait for the right offer, you have a better chance of landing your ideal sale price, so you can be more optimistic with your bottom line pricing.
Leverage Counteroffers to Get the Best Sale Price
When a potential buyer makes an offer on your home, it’s time to make some big decisions. If the amount they offered is list price or above, your best option is almost always going to be to move forward with the sale and head into escrow. However, in most cases, it’s more likely that the first offer you receive will be below list price, maybe even way below. These offers are known as ‘lowball offers‘. So what should you do if this happens and you want to engage the buyer in negotiation? You have to prepare a counteroffer! Use these tried and true tactics to get the best results. This process can take a while, especially if you go back and forth multiple times, so be prepared to practice some patience. If things don’t go well when you counter, you have another option.
It May be Best to Reject the Offer
While it may seem counterintuative, in some cases it just makes sense to reject an offer. If, for example, you get a lowball offer that is so low it’s insulting – you can reject the offer outright. You can also reject an offer if the counter they submit in response to your counter is too low. Rejecting a lowball offer keeps you from being locked into negotiations one buyer. This makes it easier for you to accept a higher, more profitable offer if a better buyer comes along.
Another option is to reject an offer without submitting a counter, but invite the buyers to submit another, more reasonable bid. This is a more extreme tactic, but it can help weed out the serious buyers from the “well-maybe-it’s-not-the-right-time-for-us” buyers.
There’s also one other unique situation worth mentioning.
If the Market Allows, Create a Bidding War
Don’t Get Pressured Into Accepting an Offer
Selling a home can be stressful, and it’s hard to be practical when you’re dealing with so much money. Because of this, it can be tempting to settle for a lowball offer if you really like the buyers or if you haven’t gotten many offers. But, carefully evaluating each offer can mean you make thousands more dollars at closing. Therefore, it’s often worth it to give your home some more time to capture new interest if you have freedom to do so. At the very least, don’t be tempted to accept anything below the bottom line price you decided on unless you encounter surprises during the inspection or things become desperate and you need to be out of the home quickly.
When you go to sell, patience coupled with the right strategy will help you get sale price you want.