Last week, we shared information on the different strategies home sellers use to determine a fair listing price for their property. For sellers, this is a key component of the sales process aimed at eliciting strong buyer interest.

Once you have succeeded in doing that and have received multiple offers, how should you proceed next? Negotiating a sales price that is mutually acceptable to both the seller and buyer can prove to be difficult. In today’s blog post, we’d like to share information on some key aspects that can help you negotiate a sales outcome that is in line with your best interests.

Receiving a Sales Offer

After you receive an offer for your property, be it a house, townhouse, or condominium, you can accept, reject, or counter that offer price. Before you choose to proceed with any of these three options, it is important to ask yourself the following questions, as recommended by RE/MAX.

  • How close is the offer to the asking price of your home?
  • Has the buyer asked you to make any repairs?
  • Has the buyer asked for any credits to make home improvements?
  • Does the set closing date fit with your schedule?
  • Are there any other offers?
  • Can you afford to wait for more offers?

Based on the answers to these questions, you may choose to do the following:

Counter the Offer

For sellers who have spent considerable time researching the market, getting their home appraised or renovated, or used an experienced real estate agent to understand and determine a fair market value for their property, countering an offer that is lower than the listing price seems the most logical step to take.

At the same time, it is important to consider the current market conditions. Are you selling in a buyer’s market, for instance? If that is the case, then you do not want to come across as inflexible to potential buyers. If you are confident in the sales potential of your home, you should stand your ground and use that information to convince the buyer of the intrinsic value of your property. 

Reject the Offer

If you are not happy with the offer you have received, you can reject it and ask the buyer to submit a new offer. If the buyer is seriously interested, he or she will resubmit. Whether they choose to do so at price lower or higher price than their original bid is also an indicator of how interested they are in making the purchase and if they feel confident about the positive market value of the property on sale.

As a seller, you can still accept a higher offer from another buyer if you have not countered the earlier offer. This can help nudge potential buyers in the competitive direction you want and eventually help you secure a better offer.

Holding an Open House Event

Open House events are highly recommended if you want to create an additional buzz about the sale, as well as generate greater competition among potential buyers for your property. Based on the interest you receive during the Open House you could receive multiple offers, which allow you to counter with a higher asking price. Alternatively, even if you receive only a single offer, you can continue to negotiate for a better price as the buyer does not know if you are considering competing offers. 

Setting an Expiration Date for Counter Offers

Sellers are not expected to disclose if they are involved in sales discussions with multiple buyers. However, doing so can help sellers get better offers or turn off some buyers. If you are looking to expedite the sales process, you can choose an expiration date for the counter offers you expect to receive. This propels buyers to make the counter offer more quickly and helps the seller move on to considering other offers if the ongoing negotiation does not work out. The longer your property stays on the market, the harder it becomes to negotiate a higher price for it.

Offer to Pay the Closing Costs

One way for sellers to get a better price than the one initially listed is to offer to pay the closing costs of the sales, typically pegged at about 3 percent of the purchase price. This can be a great incentive for buyers who do not have enough cash to pay for the closing costs but can afford to take out a larger mortgage in line with a higher sales price. 

Negotiating a profitable sales price for your home depends on a range of factors, such as the neighborhood your property is located in, current market conditions, the physical condition and inherent value of your home, and importantly the Realtor you hire to negotiate on your behalf.  

With its decades-long experience in real-estate negotiations, we hope that you will choose the RE/MAX Royal Team Sachdeva Realty team as your trusted source of advice and support if you are looking to place your property on the market in the near future. Do get in touch with us if you have any questions. 

Have a great weekend!