“You Don’t Get What You Deserve, You Get What Your Negotiate.” That is the title for a popular book on negotiating. I have negotiated the sale of many homes and can tell you it’s true from personal experience.
Home buyers want to buy your home for the lowest price possible. That is why you must avoid making any of these common mistakes when you are negotiating on the sale of your home.
Common Negotiating Mistake #1: Not learning the other party’s motivation. Price isn’t the only reason people buy. Maybe they really like a certain feature that your home has. They might be willing to pay more because of that feature.
Sometimes they might even absolutely love that feature. They have been home hunting for a while and finally found a home that met their needs completely. That means they are willing to pay more for your home.
If you meet the buyers, then ask them why they are buying a home. They might tell you that they are being transferred and have to find a home by a certain date. If you know that, you will be able to negotiate a higher sales price.
You need to probe for the buyer’s motivation every chance you get. If the buyer’s have an agent, then you need to probe the agent for information.
Here are some of the questions that you should be asking:
* “Why do you like this home?”
* “Where are you moving from?”
* “How does this home compare to other homes you are looking at?”
Now, make sure you don’t ask them as bluntly as that. But, you can often find the answers in a roundabout way.
For example, you could say, “You will love living in our town because of the X (insert a unique feature of your town.) Do you have an X where you live now?”
That will start the conversation about where they are moving from. You can learn a lot from what the buyer says that can really help with the negotiations.
You would be amazed at what some people will tell you. Which leads us to the next common negotiating mistake.
Common Negotiating Mistake #2: Talking too much. This is the worst sin of negotiating. Don’t tell the buyer your life’s story.
What do you think would pop into a buyer’s head if they heard this out of a seller’s mouth? “We must sell the home because it is in foreclosure and if we don’t sell it be June 23rd, then the bank will foreclose on it.”
Immediately they will think, “I wonder what they owe on the house. Because if it doesn’t sell they will have a foreclosure. The seller’s probably just want to get what they owe on the home so they can avoid foreclosure.”
This is an extreme example, but it shows you how a simple slip of the tongue could cause a seller to lose a large amount of their hard earned equity.
A seller facing foreclosure in that situation might be desperate enough to “get out” with none of their equity just to avoid foreclosure.
But, what if the buyer was willing to pay the market value for the home? That seller just lost all their equity! When a buyer asks why you are selling answer them without giving away any extra information.
You could say, “Oh, we would like to move to Omaha.” (Or whatever place you are moving to.) You don’t need to say much more than that. And don’t tell them you have a job transfer!
Common Negotiating Mistake #3: Making the first move. Many buyers will ask what your bottom line is. They know that they can usually negotiate a home seller down to an even lower price.
Don’t fall for it. You’ve already made the first move by setting a price for your home. Tell the buyers that you need to think it over and get back to them.
Then, ask them what they like about your home. If they tell you, then you can determine their motivation to buy your home. After that, ask them what they are thinking of offering on your home.
The reason this rule is so important is that in some negotiations you may offer more at the beginning than the other party is willing to accept. Here is an example of this.
A person I know was trying to buy something. He had a price in mind that he was willing to pay. He thought the best price he could get was $1,500, but he was willing to pay up to $2,000.
He asked the seller what he wanted for the item. The seller responded that he didn’t know what he wanted. He offered the seller $1,500 and the seller accepted it.
Later on he learned that the seller was desperate. The seller had a price in mind of $800 to $1,000. If the seller had mentioned an opening price first, then he would have saved $500! Instead the seller made an extra $500.
Common Negotiating Mistake #4: Letting your ego get involved. What is your final goal? You want to sell your property quickly for top dollar, right? Keep that goal in mind during the entire negotiation.
I have seen people kill a potential top dollar sale simply because they didn’t like the buyer. Or, the buyer started negotiations with a lowball offer and the seller got offended.
“I refuse to negotiate with someone who insulted me with that lowball offer”, they said. And a good buyer moved on to buy another house.
Most buyers with lowball offers can be negotiated to a higher price. Some buyers have a big ego and think they are great negotiators (when they actually aren’t.) What is their definition of a great negotiator?
Someone with a big ego that tells people off and walks around like they own the world. They think that being rude will get them a better deal. They’ll throw around “take it or leave it” offers.
I can tell you from personal experience that most buyers are willing to pay more than their “take it or leave it” offer. You just have to keep the negotiations going, even thought you might be a little unhappy or angry with what they are doing.
I have seen home sellers tell off a buyer that said something rude. That buyer could have bought their house. The buyer might actually be a very nice person.
The bottom line is that you should always keep your eye on the goal and don’t get distracted by petty things. You want to sell your house for top dollar. Let anything a buyer says that is rude, or otherwise offensive, roll off like water off a duck’s back.
Common Negotiating Mistake #5: Failing to take time on the counter offer. Many times a buyer will pressure you to reply right away to an offer.
Buyers are impatient and if they really like your house, then they will want an answer to their offer right away. But, you know what else that means?
It also means they are probably willing to pay more for your property. Take a little time to sit down and consider the situation.
Have you been able to find out any information on the buyers? Use that to put yourself in the buyer’s shoes. A little space and an objective third party will lead to more effective decision making.
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