The Ultimate Guide to Negotiating Home Prices: For Sale by Owner

Real estate transactions often come down to negotiation, and if you’re selling your home yourself, that meets the rubber. Price is a big part of the discussion, but it’s not the whole picture. Before a buyer and seller are able to shake hands on a deal there are many details of which to work out. Read on to learn of the key points to take into consideration when buying or selling your home.

Negotiating 101: Building Confidence with a Plan

Negotiation comes naturally to some folks. The rest of us can prepare a little. Here are some key tactics to help you get the best outcome:

1. 1. 1. Do Your Homework: The more you know, the better you’ll be. Check the prices of such houses in your area. What are they listed for? What are they actually selling out for? Once you have a real data valuation or appraisal, or at least a reasonable ability to compute one, you have an accurate backup for your price.
      2. Listen and Learn: The best negotiators are patient listeners. Watch out for what they want. Another way you can use it as a bargaining chip is to talk about your washer and dryer if the buyer asks. If you can keep a few concessions in mind, you might reach a final agreement.
      3. Stay Calm and Focused: But, no matter the other side, always remember the goal – to close the deal. Simple is keeping things simple, with your goals and their needs in mind. By doing this, you can do without fighting more about the heat without getting caught up in the moment’s heat.
      4. Know When to Walk Away: If you’re not forced to deal with only one option, it’s easier to negotiate. If you don’t close immediately, as a buyer, are you able to arrange for alternative living? Is a seller allowed to rent out their property if the sale doesn’t go through? A back-up plan gives you power.

What’s on the Table? Beyond the Price

Yes, price may certainly be the main focus, but it’s not the only item you can negotiate. There’s other parts to negotiate, and a lot of the time negotiation involves trying to determine who it is that pays for what. Here are some of the most common financial points open for discussion:

• • Closing Costs: As far as these one time fees go, they include things like title insurance, recording fees etc. Sometimes the buyer and seller have their own fees, sometimes the cost gets transferred from one side to the other to make a sale possible.
  • Taxes: In some areas, some of the closing costs are transfer taxes, that can involve payment from the buyer or the seller. When you know what’s usual in your area, you’ll have an advantage in easing the other side’s burden and securing a great price.
  • Earnest Money Deposit: However, this deposit is typically bought by the buyers so that they can prove that they’re serious. A larger deposit might be more attractive to a buyer but a smaller one might draw questions. In most cases, this deposit is 1-10 percent of the asking price and acts as part of the buyer’s down payment when the deal is closed.

Beyond the Price Tag: Terms You Can Negotiate

There’s more involved in real estate transactions than just two parties exchanging money. Here are some of the other key areas that can make or break a deal:

• • Closing Date: Timing can be critical. If you can be flexible with when you move, talk about the closing date and see if they will work with you a bit on closing but get other things that you want.
  • Contingencies: Contingency clauses provide both buyers and sellers a way out of the contract, either if it’s not to their satisfaction or not at all. Contingencies fall into two categories: inspections and financing, and the more contingencies you have the less attractive your offer is.
  • Inclusions: Certain items may be included on sale, depending on whatever the two sides agree there’s to be sold and not sold. With such items on the table they offer a sweetener to sweeten negotiations and keep them moving forward.

Limits and Flexibility

• • Set your top priorities when you’re buying or selling. Set the maximum you’ll pay or minimum you’ll accept. Think about must-haves and places you could better compromise. That way, you’ll know when to dig in your heels and when to flex a bit.
  • Splitting the difference isn’t always a compromise. For example, if a buyer raises an offer by $3,000. Instead of that, try a smaller amount off your previous price, or an inclusion like a piece of furniture. With this strategy you can get to a balanced deal with few concessions.

Firm but Not Over the Top

The art of negotiation is not about death entails but rather about seeing neither side clearly and yet severing the deadlock without losing what you were fighting for. Tell them how much, tell them what you will, and wait. Silence is a powerful tool — it tells you when someone is serious about what they want. When the other party responds, listen carefully, you’re showing them that you understand their point of view, even if you don’t. Genetics continues to allow us distant relatives who understand what makes us tick. Respect goes a long way towards keeping things professional and productive.

Key Priorities for Sellers

If you’re selling, that means the first priority is to be able to market your home in an effective way. We have useful marketing tools to enable you to get noticed and get more buyers.

Here are some other areas that are often top priorities for FSBO sellers:

• • Net Proceeds: What they’ll actually make from the sale is usually the big thing that sellers care about. It’s the amount that’s left after paying closing costs, loans, and fees. A full price offer isn’t necessarily the best option, sometimes the offer is slightly lower with less closing costs and puts more money into your pocket.
  • Occupancy Flexibility: The closing date does not coincide with being the move date. You can negotiate a flexible occupancy date to simplify the move out process and / or extra time you have to seek a new place should you need it.

Key Priorities for Buyers

Two big areas of concern for buyers are the condition of the home and the up front costs.

Here’s a look at two key areas where buyers often focus:

• • Repairs: A buyer will ask that certain repairs be made after an inspection. Sell big ticket items and buyers take care of the minor issues, but they may not. A seller may have repairs ordered, and give the buyer control of quality by providing the funds to perform them.
  • Closing Cash Needs: A small discount isn’t necessarily a bad thing, but you can add some appeal to your offer by covering some of the buyer’s closing costs. In fact most buyers want to have cash in their pockets rather than paying less per month on their mortgage.

Creating a Win-Win Outcome

If negotiations degenerate into a tug of war then both sides can walk away unsatisfied. Our goal is to have a win-win situation that allows both the buyer and seller to walk away with a good feeling. A concession gets you someone, so make a concession, ask for something in return. To ensure that you are both heard, keep the conversation flowing, and the last deal you close you can be proud of.

At Strike Realty, we know FSBO isn’t easy, but with Gabe, Dez, and our team behind you, you’ll have the guidance you need to negotiate successfully and make a confident sale. Let us give you a fresh perspective so that your FSBO journey leads to a sale on terms you can smile about.