If you are one of the many homeowners seeking to save thousands of dollars on real estate fees and sell your home “For Sale by Owner” (FSBO), you’ll be interfacing with prospective buyers throughout the process. Selling FSBO puts you in charge of the final deal for your home. When you get an offer, how you respond can affect the success of the deal, and the final payoff you get when the deal closes. An important step in closing a home sale is the negotiation process with your buyer. It’s important to know how to negotiate the details of your sale to get the best result.
Negotiating Tips for FSBO Home Sellers
We’ve put together a few tips on how to successfully negotiate with your home buyer and get the best deal possible for the sale of your home:
1. Know the local market before you list
As you enter the FSBO process, prepare to do some research before listing your home. Start by getting to know the local real estate market. Examine current listings, know asking prices, and research final sales prices on homes that have closed around you. Run some comps (similar properties that have recently closed or are on the market) in the area. Get a feel for and keep an eye on going mortgage interest rates, which can affect the market price of homes. When interest rates go up, home prices may dip, and, similarly, if rates drop, higher home prices seem more affordable to buyers (and their lenders). If in doubt about where to set the price, get a home appraisal to determine the market value of your home. Pricing your home right and knowing your competition will help you position your home for a more successful sale and allow you to remain firm on your terms during negotiations without losing a sale.
2. Prepare your home to minimize buyer demands
As you get ready to list your home, prepare your home to be shown. Repair or upgrade any areas of your house buyers will likely find a deterrent. But don’t upgrade beyond the value of your home, as you may not recoup those costs.
● Repair obvious flaws or other noticeable issues. Make sure everything functions, from plumbing to the gas fireplace you seldom use. This will avoid delays and demands during negotiations and will increase your chances of getting your asking price.
● Great upgrades include smart appliances, hardwood floors, smart and programmable thermostats, and energy-efficient windows and doors. If you have made these upgrades, be prepared to point them out.
● Sell the house, not your lifestyle. Remove personal items and try to give your home a minimalist look. You may want to stage your home with rental furniture if you think your own is not up to par. The better the condition of your home, the more offers you may see and the better position you will be in to negotiate and win.
3. Learn buyer motivations
As you interact with potential buyers, learn why they are seeking to buy a home. See if you can discover if they are under a tight deadline to buy. Sometimes a buyer’s lease is up for renewal, and they want to beat that deadline. Others might be relocating for a new job and need to get settled ASAP. The faster they need to buy, the less firm they may be on their offer price or any demands that come up.
4. Practice silence
Sometimes the most important tactic in a negotiation is silence. Let the other party reveal themselves to you. In silence, you don’t give away the store and you may nudge the other party into volunteering a concession when they think with your silence you may be planning to withdraw. If your buyer is silent, just repeat your terms without offering new information. Watch your buyer’s body language. You will see their discomfort. Don’t give in. Eventually, if they are serious about the property, they will realize they need to move the deal forward and offer you a concession.
5. It’s ok to counteroffer
If you feel an offer is too low, don’t be afraid to counteroffer, especially if you are in a multiple bid situation. Unless the counter is unreasonable, the other party will either accept or come back with a compromise. In that case, you’ll have made some improvement on your deal and you can decide whether or not it is acceptable. Remember, however, once you counter, the original offer is no longer on the table.
Be sure that you are thoroughly reviewing the terms of the offer. Details like an unreasonable close date and contingencies can put a damper on a deal that otherwise looks good. Be sure you examine and understand all the terms included in the contract before you sign.
6. Negotiate from a win/win perspective
Don’t treat negotiations as a combative situation. Sometimes buyers make excessive or unreasonable requests. You don’t need to give into those. If an offer is low, counteroffer a reasonable price, but not one that is above market value. If the buyer is serious, they will likely accept it.
Sometimes, requests for repairs may come from the lender. These are probably items you’ll need to agree to so the buyer can get their funding. However, you can offer credits at close, for example, and allow the buyer to make the repairs.
You may need to make reasonable concessions, or ask your buyer to do so, in order to get the deal to the point where it is a win/win. Compromising in areas of the sale you can live with often results in getting the buyer to accept the deal you actually wanted. So go in with a positive attitude and reasonable expectations. Stay within your comfort zone on concessions, and see if the deal can be made within that frame. If not, it’s ok to move on to the next offer that comes in.
7. Be willing to walk away
Of course, there are buyers who will never be happy unless they haggle a below-market price. If you’re dealing with this type of buyer on your own, it can be difficult to steer them back into reasonable negotiations. Always know when it’s in your best interest to simply walk away. If you do, the buyer might suddenly become reasonable if they really want your house, or, more likely, they’ll walk away themselves. Either way, you’re better off in the long-run so don’t hesitate to cut the cord on a deal that is not likely to come out well. The right buyer will come along.
Get Help to Negotiate a Successful Home Sale
FSBO sellers can successfully negotiate the sale of their home without the services of a real estate agent. However, it does take some prep work and knowledge to understand the process. The more you know about your local home market and your potential buyers, the stronger your position will be when negotiating a deal.
Of course, negotiating a home sale may not be to everyone’s liking. If you need help, here at FSBO Virginia, in our low cost ”Whole Enchilada” and “Full Service” packages, we handle the countering and negotiating for you. We have been helping FSBO’s since 1994 and have a lot of experience to save you the most money. You still get the savings of an FSBO sale but we can help you with many steps along the way. Learn more at GoToFSBO.com today.