Selling Your Home - Negotiating
Is there a secret to good negotiating?
There are several cardinal
rules to negotiating effectively. One is do your homework, and learn as much
about the seller or the buyer as you can. Another is to play your cards close to
your vest and not reveal too much information to the other party or their agent.
Don't let yourself get rushed into any decision, no matter how tempting it may
be. Finally, if you have doubts about your negotiating skill, hire someone to
What contingencies should be put in an offer?
include two standard contingencies: a financing contingency, which makes the
sale dependent on the buyers' ability to obtain a loan commitment from a lender,
and an inspection contingency, which allows buyers to have professionals inspect
the property to their satisfaction. A buyer could forfeit his or her deposit
under certain circumstances, such as backing out of the deal for a reason not
stipulated in the contract. The purchase contract must include the sellers
responsibilities, such things as passing clear title, maintaining the property
in its present condition until closing and making any agreed-upon repairs to the
How is the price set?
It's very important to price
your home according to current market conditions. Because the real estate market
is continually changing, and market fluctuations have an effect on property
values, it's imperative to select your list price based on the most recent
comparable sales in your neighborhood. A so-called comparative market analysis
provides the background data upon which to base your list-price decision. When
you prepare to sell and are interviewing agents, study each agent's comparable
sales report (the data should be no more than three months old). If all agents
agree on a price range for your home, go with the consensus. Watch out for an
agent whose opinion of value is considerably higher than the others.
Are low-ball offers advisable?
A low-ball offer is a term used to
describe an offer on a house that is substantially less than the asking price.
While any offer can be presented, a low-ball offer can sour a prospective sale
and discourage the seller from negotiating at all. Unless the house is very
overpriced, the offer will probably be rejected. You should always do your
homework about comparable prices in the neighborhood before making an y offer.
It also pays to know something about the seller's motivation. A lower price with
a speedy escrow, for example, may motivate a seller who must move, has another
house under contract or must sell quickly for other reasons.
Do I have
to consider contingencies?
If you are a seller in a seller's market, in
which there is more demand than supply, you probably won't have to entertain too
many contingencies. But if you are selling in a buyer's market, when buyers are
few, prepare to be very flexible. Granting contingencies also depends upon what
kind of price you want to get and on the condition of your property, most
experts agree. Remember, contingencies are written into the contract and are
negotiable during the negotiation phase only.
What is the difference
between market value and appraised value?
The appraised value of a house
is a certified appraiser's opinion of the worth of a home at a given point in
time. Lenders require appraisals as part of the loan application process; fees
range from $200 to $300. Market value is what price the house will bring at a
given point in time. A comparative market analysis is an informal estimate of
market value, based on sales of comparable properties, performed by a real
estate agent or broker. Either an appraisal or a comparative market analysis is
the most accurate way to determine what your home is worth.
Is a low
offer a good idea?
While your low offer in a normal market might be
rejected immediately, in a buyer's market a motivated seller will either accept
or make a counteroffer. Full-price offers or above are more likely to be
accepted by the seller. But there are other considerations involved:
the offer contingent upon anything, such as the sale of the buyer's current
house? If so, a low offer, even at full price, may not be as attractive as an
offer without that condition.
* Is the offer made on the house as is, or does
the buyer want the seller to make some repairs or lower the price instead?
Is the offer all cash, meaning the buyer has waived the financing contingency?
If so, then an offer at less than the asking price may be more attractive to the
seller than a full-price offer with a financing contingency.
the best time to sell your house?
There is no "best" time to sell per se.
Selling a house depends on supply, demand and other economic factors. But the
time of year in which you choose to sell can make a difference both in the
amount of time it takes to sell your home and in the ultimate selling price.
Weather conditions are less of a consideration in more temperate climates, but
most of the time, the real estate market picks up as early as February, with the
strongest selling season usually lasting through May and June. With the onset of
summer, the market slows. July is often the slowest month for real estate sales
due to a strong spring market putting possible upward pressure on interest
rates. Also, many prospective home buyers and their agents take vacations during
mid-summer. Following the summer slowdown, real estate sales activity tends to
pick up for a second, although less vigorous, fall market, which usually lasts
into November when the market slows again as buyers and sellers turn their
attention to the holidays. If this makes you wonder if you should take your home
off the market for the holidays, consider the advice of veteran agents: You are
always more likely to sell your house if it is available to show to prospective