Negotiating Goals for the Seller
Will you ever again be able to hang your threadbare bath towel on a hook in plain sight? Drop your gym clothes in the entryway? Let your teenage daughter festoon her room with shorts and shoes? In other words, will life ever feel normal again?
Yes. But take a deep breath. What's coming next is very important and takes a different kind of energy. You are about to negotiate a binding legal contract.
Skills required? An ability to focus on technical detail and a talent for meeting and talking with strangers.
You will hear over and over that the value of your house has nothing to do with what you need to get out of it. But when you have an offer, it's important for you to know precisely what you need from the sale of your home before you start negotiating with a buyer. One strategy is to make two lists. On one, record the best scenario you can imagine. On the other, list the minimum terms you can accept and still have a deal work for you.
How to Get StartedFirst determine the minimum amount of money you need to clear on the sale. Will you need to pay off a mortgage? Clear credit card debt? Make a down payment on another house? Make repairs to your present home if the buyer's inspector finds something dire? Don't forget your portion of agent commissions and closing costs. And there will be fees, taxes, and insurance at closing.
Speaking of commissions and fees, can you afford to pick up a percentage of what the buyer usually would pay if it means keeping a deal together?
Also figure out how much it costs to live in your home each month for mortgage, taxes, and insurance. This total could help you at the negotiating table when you are deciding whether to accept an offer for less than your asking price, but one that would get you out of the house quickly.
Give some thought in advance to the kinds of personal property a buyer might request and list items that are definitely off limits - the kids' play set in the backyard, the freezer in the basement, the standalone basketball hoop, the lawn mower. Are any of them deal breakers?
Know your best timing for a move. Do you have a job waiting in another town? Do you want to stay put until your spouse returns from military duty? Would it be ideal to stay in your home until school is out?
Your Two ListsHere's an example of how you might apply your lists. Let's say you've already made an offer on another home contingent on the sale of your home by a certain date, so you want a quick sale.
Your best deal might be:
A full price or higher offer
A buyer pre-approved for a mortgage
A buyer willing to waive the inspection, or to be responsible for any necessary repairs if you lower the sales price
A buyer who wants to close in 30 days, sooner if possible
A buyer who doesn't want any personal property
Your minimum deal might be:
A buyer who offers 7 percent below the asking price
A buyer who agrees to close in 60 days
A buyer who asks only for standard financing, inspection, and clear title contingencies
A buyer who compromises on personal property, giving you the freezer you want to keep
Each offer that comes to you as the seller will set up a different scenario. You'll have to decide which to reject and which to try to negotiate terms favorable for you. Advance work is time well spent whether you are working on your own, with an attorney, or with an agent.
Seller's Tip: Dissect your personal circumstances with surgical precision so you are very clear about what you need from a buyer, including the minimum sales price you can accept.
By Diane Tuman
- Last edited October 12 2012
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