Getting top dollar for your home is a matter of pricing it right, then learning how to negotiate. Negotiation is a matter of learning a few skills, but more importantly, it’s about having some crucial information…and getting top dollar means that you don’t let information fall into the hands of the buyers. It might even be best to not let it fall into the hands of your own real estate agent!
Know why you’re selling your home but never, ever disclose it.
Your own personal motivation to sell your home is the single most important factor determining your approach. It will affect everything from your asking price to how long you’re willing to wait for a sale to how much time, effort, and money you’re willing to invest to get that sale. When you keep this information as a closely guarded secret, you avoid giving the buyer any negotiating leverage. If you disclose that you’ve accepted a position out of state, the buyer will know that you’re pretty desperate…and potentially willing to cave on your price. If they find out that you have a baby on the way, they can determine just when you’ll be willing to start lowering your price. The closer you are to the due date, the more willing you’ll be to crumble! So, if you’re asked why you’ve decided to sell, simply say that your housing needs have changed. If pressured, say that this house doesn’t meet your needs any more. Simple as that.
Notice that I used the word “house” rather than “home.” Using the word “house” is a bit colder and can subtly communicate that you don’t have any emotional attachment to your investment. It’s a really good negotiating tactic, and when you’re out for top dollar, you need all the help you can get.
Ok, ok, go ahead and consider using a good real estate agent to sell your home.
Make sure you get references and only use a busy agent. Agents with lots of time on their hands are like that for a reason. Also, remember that over 75% of all home sellers say they would not work again with the agent who listed their home. Usually this is a result of poor marketing and communication on the part of the agent, so take the time to find the agent who is going to best represent your needs during the transaction.
Before establishing a sales price for your home, consult with more than one listing agent.
No the agents won’t like it, but you’re out for top dollar here, not real estate agent friends, right? As a seller, you’ll want to sell as close to the listing price (or higher) as possible, but if you start out too high, you run the risk of not being taken seriously by buyers. The result: your house may sit on the market for a long time. Conversely, if you price the home too low, you could be costing yourself thousands of those top dollars.
Always keep in mind, however, that should you use a real estate agent, your incentives and hers are not always aligned. For example, if you list your home at $289,000 and she comes to you with an offer of $274,000 from a pre approved buyer (translation: quick sale), she may tell you that “given this market, you should take it.” She may even give you a couple of examples of other houses, nicer than yours, that sold for less in this dismal economy. Hmm, maybe you should just take it. You reason that she gets a cut of the total price so she wants the home to sell for top dollar, right? Well, maybe not.
The real estate commission is usually about 6 percent and is split between the buying real estate office and the selling real estate office. That amount is further split between the agent and the broker, so she really only gets 1.5 percent. She might be able to keep the house on the market for a few more weeks and get the full asking price of $289,000 but what would she have to do to accomplish that? She would have to have a few more open houses and run more ads (out of her pocket). Considering that the commission on that extra $15,000 is only $225 and her commission on the lower offer is $4,110, she may reason that it isn’t worth it to her. You lose $14,100 but she only gives up $225. Maybe your incentives aren’t aligned to well after all. Your top dollar and her top dollar may not be the same.
Go ahead and get an appraisal on your home but pay for it yourself.
He who pays, gets to pick! Don’t use an FHA appraiser. They generally price homes more conservatively than a conventional or VA appraiser. But keep in mind that a good appraisal can be a huge benefit in marketing your home. Getting an appraisal is a good way to let prospective buyers know that your home can be financed and that you’re serious about selling. A word of caution: an appraisal is not a guarantee your house will sell for that price, and you also may not like the appraisal value you are quoted. Ask friends or an agent for an appraiser who is known for seeing properties with a little more value than one who is too conservative in his or her estimates of a house’s value.
Negotiation is the name of the game when selling your home. Here are a few negotiating tips to get top dollar:
Before deciding on your asking price, make sure you leave yourself enough room to bargain. This is called the “bracketing technique” and is covered in Secrets of Power Negotiating. Negotiating is an art form and should not only rest in your agent’s hands. Remember, the problem with incentive alignment?
Do keep in mind that a buyer is more likely to make a full-priced offer on a home that is priced right before making a low offer on a home that is priced too high. This is where your due diligence will be rewarded. Don’t depend on your agent or appraiser to come up with your asking price. Have ample evidence to back up your higher price and stick to your guns!
Never move out before you sell. An empty home can look abandoned or neglected. Buyers who know you already have another home may feel they have an advantage to avoid paying top dollar.
Deadlines create a serious disadvantage. Don’t try to sell by a certain date. This adds unnecessary pressure to sell and can cost you that top dollar.
Don’t take a low offer personally. The initial offer is usually below both what you were expecting and what they buyer is actually willing to pay. This is quite normal so don’t get upset. Evaluate the offer objectively. This is merely a starting point for negotiations.
Turn that low offer around. You can counter a low offer with one that is just under your original asking price. This lets the buyer know that you don’t take their first offer seriously, but at the same time are going to be somewhat flexible.
Make your home irresistible.
I covered this in yesterdays post on 52 tips to make your home irresistible to buyers. Appearance is absolutely critical. Potential buyers are looking for excuses not to buy your home, and it would be a shame that they went another direction because of a tiny chip in a bathroom counter or some dirty dishes in the kitchen sink.
Making your home appealing on the inside and out will put you miles ahead of your competition. If your home is in top notch shape, it will generate a greater emotional response from your prospective buyers, more than any other factor.
Learn why your buyer is motivated to buy your home.
The better you know your buyer, the more leverage you have to negotiate. Ask questions. Ask lots and lots of questions. So what do you like about the home? Can you see yourself living in this neighborhood? Did you notice the new flowerbeds? What do you do in your spare time? Is a good school system important to you? How long have you been looking for a home? What is forcing you to move to a newer home? Have you thought about where you could put your furniture? You know, you look like the kind of people who would love this home!
Hey—chat it up! What have you got to lose? Remember: you’re after top dollar, right?
As a rule, buyers are looking to purchase the best affordable property for the least amount of money.
If you know the buyer needs to move in quickly, this can help you get a better price, so find out what the buyer can really afford. Work with buyers who are pre-approved for a home loan so you know exactly how much they are going to finance and how much will be spent as a down payment.
Pre-approved is different that pre-qualified. Pre-approved means they are ready to go. Pre-qualified means they have filled out some paperwork and are waiting to decide if they can afford a particular house.
Find out if the buyer has a closing deadline to meet.
Knowledge of a buyer’s deadline for completing the negotiations creates an enormous advantage for you to get top dollar.
Getting top dollar for your home is imperative in this market, but it isn’t going to be easy. Setting the correct price and learning to negotiate will help you get the most money and help you achieve top dollar!
[tags]agent, buyer, buyers, dollar, home, house, offer, sell[/tags]