Tips for negotiating with a buyer
One of the advantages of working with an experienced real estate agent is that they are also experienced negotiators. When the offers come rolling in, here are a few things to keep in mind to keep in mind:
Don't accept the first offer as is
You may be leaving money on the table.
Always counter an offer
Some people think it’s a waste of their time, but the reality is that the time necessary to make a counter-offer (even just restating your original asking price) is minimal. Some buyers are just “testing the waters” and may immediately come up even if your counter is just below your original asking price. If the buyer continues to make unrealistic offers, it’s not necessary to continue engaging with them.
If you're serious, don't make your counteroffer too small
A reduction of 1% of the asking price can be perceived as an insult, whereas 1-3% shows you're willing to play ball.
Insist that prospective buyers provide a mortgage pre-approval, or proof of funds if they intend to pay cash
This should be done at the time the first offer is submitted.
Understand that negotiating for the purchase of a home is often an emotional experience for both you and the buyer
Always take a step back and put the transaction in perspective. Try relying on the two year rule: Ask yourself if the point being negotiated will matter to you in two years. If the answer is no, give in on it.
Don't focus exclusively on price
If you're deadlocked, consider whether to bring other issues into play like closing costs, the purchasing timeline, and adding or dropping contingencies.
If you receive multiple bids, compare the offers closely
Are they all relying on financing or is one planning to pay cash? (In the current credit environment, all-cash is king, all other things being mostly equal.) Do they already have their financing lined up? Are they at or near their maximum loan amount? If you’re selling a co-op you will also need to scrutinize the prospective purchasers to determine which is most likely to pass the board. You will need to request a financial statement at the very least.
Don't blab about personal information
Your broker should not be sharing your reasons for selling (pregnant with twins? getting a divorce? job transfer?), because a well-prepared buyer's broker will use all such information against you when negotiating a deal.
Source: Brick Underground
