Historically low interest rates and a booming seller’s market have put homeowners in a profitable position. Properties are flying off the market, and buyers are willing to compromise in order to snag their dream home.
Although sellers may not have a hard time negotiating at the moment, there are still certain tactics they can deploy to get top dollar. From working with a traditional or discount real estate agent to knowing when to walk away, read on to learn key negotiation tips and ways to save money during the home-selling process.
Or, if you want to skip the negotiations entirely, working with a low commission company like Clever can also help you pocket from your sale. You’ll only pay 1% or $3,000 listing fees, saving you thousands in realtor fees!
1. Work with a realtor
One of the greatest tools to have in your pocket during home sale negotiations is a knowledgeable realtor. You shouldn’t be afraid to ask a realtor about their negotiation style before hiring them. A good agent has been around the block and understands what to ask for and when to hold back.
It’s important to note that agent fees vary greatly from state to state (e.g., in Florida commission averages 6%, but in Texas it’s 5.63%), and the seller typically pays for both the buyer’s and their own agent’s commission. Although this may tempt some people to use a flat-fee listing service and forgo a realtor, they should know that these services offer less representation. Additionally, working with an agent typically results in a higher final sale price thanks to their negotiation tactics.
2. Counter at your list price
If a potential buyer makes an offer below your listing price, don’t be afraid to counter back with the list price. In the current seller’s market, properties have the potential to attract multiple offers, so this move may not be as risky as it sounds.
Using platforms such as Zillow and Redfin can help sellers estimate what other homes in their area have sold for.
3. Counter occupancy
Sometimes, the buyer’s and seller’s ideas about when one will move in and the other will move out do not exactly match. An owner can counter the proposed occupancy date but will also have to be reasonable with their ask. For instance, pushing it back a week may be fine, but 6 months is likely too much.
4. Counter contingencies
If an offer is loaded with contingencies, the seller can simply cross out the contingencies they do not accept. Sellers can also modify contingencies to meet the buyer halfway. This move could potentially offend the buyer and cost the deal, but owners should be confident that in this seller’s market, they’ll likely get a better offer soon.
5. Counter the terms
Oftentimes, buyers will ask the seller to help them carry part of the financing as they seek out a mortgage and plan for their down payment. Luckily, these terms are easily negotiable. If you can help out the buyer and are willing to do so, you may agree to their terms. However, if you don’t want to then you may simply tell them no.
6. Reject an offer
For those who aren’t scared to play hardball, rejecting an offer is a negotiation tactic that could actually pay off. Instead of sending back a counteroffer, the seller can ask for the buyer to submit an entirely new offer. This indicates that they understand their property’s value and puts pressure on the buyer to submit a higher offer.
7. Start a bidding war
One way to get multiple offers is to list your property and then host an open house. Do not entertain any offers until after you show the house. This will create the notion that buyers are in competition with one another, and they may send higher bids as a result. It also gives the seller the upper hand because, even if they only receive one offer, the buyer will not know that.
8. Make your counteroffer time sensitive
Owners who want to sell their homes quickly may consider adding an expiration date to their counteroffers. For example, if the default expiration date is three days, you may shorten it to one day. This will force the buyer to make a decision and will allow the seller to move on if they are not willing to accept the counteroffer.
9. Get a home inspection
A home inspection provides the seller a complete picture of the defects within their property. This allows the seller to anticipate the buyer’s complaints ahead of time. For instance, if you know that you have a bad roof, you may factor the price of repairs into your listing price so you can negotiate down if the buyer asks.
10. Push back on concessions
Concessions are things the seller concedes to at the buyer’s request to make the deal go through. This can be in the form of paying for points toward the buyer’s mortgage, a home warranty plan, prepaid property taxes, and more. In the current seller’s market, however, owners may not have to make as many concessions as they would in a buyer’s market. Remember, sellers have closing costs, too, which usually amount to 10% of the final sale price, so taking on additional costs for the buyer can be cumbersome.
11. Pay the buyer’s closing costs
The pandemic has hit many Americans hard financially. Consider: 43% of Americans report not having emergency savings, and 38% have accumulated personal debts of $3,000 or more since last year.
With this in mind, some sellers may consider offering to pay some or all of the buyer’s closing costs to help the deal go through. This tactic is especially useful for owners whose home has been sitting on the market for a while and want to quickly close a deal.
Closing costs vary from state to state (e.g., the average buyer’s closing costs in Florida is approx. $4,200), so sellers should do their research before offering to pay.
12. Offer a home warranty
If a home is not in peak condition or has some obvious damages but the owner does not want to take the time to repair it, they should consider providing the buyer with a home warranty plan. There are also companies such as We Buy Ugly Houses that will buy homes in disrepair but for much lower than market value. Therefore, offering a home warranty to an interested buyer could be the better deal in the long run.
13. Price ahead of the market
Sellers can work with their realtor to understand market trends and determine how much their home will be valued at in a couple of weeks. Then, they can list at that price. Tools such as Redfin can also help owners identify if properties in their area have been appreciating or depreciating.
Pricing ahead of the market can help during negotiations because it helps the seller get the fairest price for their property. When presenting a buyer with current trends, they will have a hard time arguing with that logic.
14. Stage the home
Staging a home can help the buyer envision themselves in it. Choosing a palatable paint color, renting fashionable furniture and even baking some cookies can all give the buyer the extra nudge they need to pull the trigger. Sellers can even customize their staging process. For example, if they know that several young families will be viewing their home, they can stage the home office as a nursery.
15. Don’t get personal
One big mistake that sellers make during negotiations is getting too personal. Buyers use all sorts of tactics, including tugging on owners’ heartstrings or even resorting to ad hominem remarks. If your ultimate goal is to get the greatest ROI for your home, then don’t let your emotions get in the way of that.
16. Take a win/win approach
Remember that negotiations are not supposed to be a battle. If a seller takes an adversarial approach, they could scare potential buyers away. Buyers will appreciate those who enter into negotiations with the goal of achieving the best deal for both parties and may be willing to work with the seller on certain items given their win/win demeanor.
The best thing someone can do during a home sale is to shut up and listen! Truly hear what the buyer is asking for instead of steamrolling over them with demands. You will likely end up saving money once all is said and done.
18. Set limits ahead of time
Before walking into negotiations, know the lowest price you will accept. Use a seller net sheet to determine how much you’ll receive in cash for your home after expenses. This will help set limits ahead of time and make it easier to know when to walk away.
19. Negotiate your agent’s commission fees
Buyers aren’t the only people who sellers can negotiate with. Sometimes, an agent will be willing to negotiate their commission rates if a client asks them. A few tactics that sellers can use with their agent include offering to refer friends and family, committing to buying your next home with your realtor, selling during off-peak season, and selling your home while it’s already unoccupied.
20. Understand opposing tactics
Homeowners should do their research ahead of time on opposing tactics that the buyer could use. These could include asking for repairs or a home warranty after inspection, asking the seller to cover closing costs, writing a personal letter to the seller, or even finding out why the seller is moving and using it to their advantage.
Sellers should keep their eyes on the prize and stay strong during negotiations, working through their realtor when possible. They may also want to suggest that the buyer negotiates other costs, such as asking their agent for a home buyer rebate or looking into first-time home buyer programs.
21. Consider selling “as is”
If a seller is trying to save money, then they can list their property to be sold “as is.” This indicates to buyers that the owner will not make any repairs or changes to the property in order to close the deal.
Tools such as Zillow’s Make Me Move allow homeowners to see what a buyer would be willing to pay for their property before actually listing it. It’s a good way to test the waters and see what buyers are willing to pay for a property as is.
22. Use a real estate attorney
Having a real estate attorney in your corner during negotiations can carry more weight than just having a realtor at the table. Attorneys are skilled negotiators and can fight more effectively on a seller’s behalf than anyone else. It is an especially good idea to hire a lawyer if you are trying to sell your house without a realtor, because the added threat of litigation can make buyers button up their tactics.
23. Get help for FSBO
If a seller decides to forgo using a realtor and lists their property as for-sale-by-owner (FSBO), a transaction coordinator can give advice to help them during negotiations and will also handle the paperwork and closing details (they’re also cheaper than agents). There are also several websites that can help owners sell their house on their own, including Zillow, Fizber, and SimplyFSBO.
24. Skip negotiations with iBuyers
Sellers who want to skip negotiations altogether should consider working with an iBuyer. These transactions are usually open-and-shut, but they tend to only go for newer homes in good condition. iBuyers such as Zillow Offers and Opendoor may send an inspector to assess the home’s value, but their offers are nonnegotiable.
25. Work with a discount real estate broker
To save money on agent fees, sellers can also work with a discount broker. Whereas the traditional agent charges around 3% commission, a discount agent will charge around 1%. Some discount agents are full-service, while others may be discounted because the seller has to take on more responsibilities themselves than working with a traditional agent, such as marketing and showing the home. Understand which type of discount agent you will be working with.
26. Know when to walk away
Ultimately, sellers should know that it’s OK to walk away from negotiations that aren’t working. If you’ve exhausted all of your tricks and the buyer will not budge, don’t be afraid to move on. We are in a seller’s market after all, and a better offer is likely to materialize sooner than you expect!