Receiving offers on your home is exhilarating; especially after countless hours of preparation. It’s an exhausting process to make repairs and market your home and it’s tempting to accept an offer quickly so that you can get on with your life. The only problem is that when the offers come in (or pour in depending on your market!) you’ll have to respond.
If you’re selling your house and want to feel confident sitting at the closing table, check out this article for a breakdown of essential negotiation tips you need to know.
What Is a Counteroffer?
Counteroffers are your written response after a buyer has made you an offer. If the buyer rejects your counteroffer he or she respond with a counteroffer. The whole process is designed to benefit both parties.
When you are presented with an offer, you’ll have three options for your counteroffer:
- Accept the buyer’s offer without making changes.
- Reject the buyer’s offer.
- Reject the buyer’s offer and counter it with a new, more appealing offer.
What Can I Change in a Counteroffer?
It’s important to note that you can make changes to sway the outcome to your advantage. Here are some things you can alter in a counteroffer:
Contingency Clauses
A contingency clause is a condition set by buyers or sellers that must be met before a transaction closes. Buyers can obtain a home inspection or agree to purchase your home only after his or her home has been sold. In your counteroffer, you can ask for a new deadline for the inspection to be complete. Some buyers may waive an inspection and that can quickly move the sale forward. You can always reject a contingency for purchase as you will potentially miss out on better offers and the house will sit in negotiation limbo for longer.
Occupancy
You might need more time to vacate the property and if so, you can counteroffer with your desired move-out date. Consider being flexible though to increase the odds of a successful sale, especially if you are having trouble getting offers.
Price
You should have a solid idea of what your home is worth, or its Fair Market Value (FMV), by using the sales of comparable homes in your area. If buyers bid lower than your listing price, you may need to consider lowering your price or meeting them in the middle. Homes with too many days on market give buyers pause because of possible flaws or overpricing.
Terms
Suppose your buyer wants you to include your new washer and dryer set with the sale. You can certainly raise the price to reflect the added appliances because the buyer is paying for added convenience and value. Or the buyer may want to finance the home with you—called seller financing—which you can negotiate.
What Are Some Best Practices for Negotiation?
- Keep control of your emotions: Stay as neutral as possible in your selling negotiations and try to detach yourself emotionally from your home’s sentimental value. Stick to the facts about your home and have the evidence available to justify your reasoning.
- Be direct: Make it clear what you want out of a negotiation.
- Know when to exit the deal: If you don’t like the offer presented to you and you’ve made an effort to work with the seller, call it quits.
- Be polite and courteous: Once you’ve decided to accept or reject an offer let the buyer know as soon as possible.
- Create competition: Only accept offers after an open house to give buyers the illusion that they will need to bid a bit higher than they initially planned to go. This can be helpful if you suspect that your listing price is not high enough (See the warning below on appraisals).
Warnings
Appraisals
Remember that a seller’s market can drive your price up and your home may not appraise if the lender sees it as a liability. Greg Hawkins, Realtor® with Silvercreek Realty Group, says, “A great real estate professional can help navigate you through the appraisal minefield. The secret to avoiding this potential deal-killer is to address it in the beginning as you receive offers. The selection and negotiation of an offer should also include appraisal as a criterion.”
Disclosures
Hawkins says, “First of all, you should ensure all disclosures are accurate and honest. As a seller, you will be asked to complete a “Seller’s Property Disclosure Form.” On the form, you can check the “Do not know” box. If you do not know, it’s acceptable to just select that option.
“There are property issues that are considered adverse facts. These items may be legally required for disclosure and vary from state to state. It is important to know what falls into this category.
“Disclosure is one of the most important ways an agent can be of service to you. Remember, failure to disclose, or disclosing incorrect information can land you in legal hot water even after a transaction is complete. Your agent’s job is to take you across the finish line with security and peace of mind, knowing the transaction was completed correctly with no loose ends.”
The Bottom Line
Remember that you have control in negotiations with buyers. You can set a deadline for accepting offers and take time to decide if any are worth it. If an offer is not acceptable to you then feel free to reject it. If you can keep your emotions in check and be as direct as possible, the odds of a successful sale increase. You should choose a winning offer and enlist the help of a professional real estate agent to get the most out of your house.
