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Learn to Master the Top 10 Techniques for Negotiating Home Purchase Price

When selling or buying a home, the battle is always with the price of the home.  Because the seller wants the most money possible and the buyer wants to pay the least amount possible.  Buyers typically think the price is too high and sellers usually think the offer is too low.   But if you are prepared ahead of time with these time-tested negotiating techniques, you can learn how to get the most money when you sell your home.

Negotiating is the process by which two or more parties with different needs and goals work to find a mutually acceptable solution to an issue.   Sometimes it is easy to negotiate, but other times, when we have a great deal at stake, the task can be intimidating or difficult.  We often look at negotiating as unpleasant, because it implies conflict, but it need not be characterized by bad feelings or angry behavior.  By following these tips to effective negotiating, you will be able to manage your negotiations with confidence and ease to increase the chance that the outcome will be positive for both parties involved.

The best perspective in negotiation is to try to find a solution where both parties win.  Try not to view negotiation as a contest that must be won.

The market value of your home is not what you have put into it, what you need out of it, or how much you want for it,   It’s not even worth what the tax office says it’s worth!  The true market value of you home is what a buyer is willing to pay for the house based on today’s market, economic condition, competition and financing.

As a seller you control the price you ask, the condition of the home, and access to the property.  But you do not control market conditions, the motivation of your competition or the value.

A common misconception among homeowners when it comes to home remodeling and renovation is that cost equals value.  However, not every remodeling project or renovation will pay off at closing.

One of the hardest things for any seller to do is to correctly price their home.  Yet, price is the single most important factor in finding a buyer.

Getting to the right price is critical, not only to finding a buyer, but to satisfying yourself that you’re not getting cheated by asking too little.

Getting to the right price remains very hard for most owners since you remember every home improvement you made and you know that a second mortgage has to be paid off.    But it doesn’t make any difference how much money and effort you put into your home or what you think it should be worth.  You home is only worth what a buyer will pay for it and what the market will bear.

1.  Proper pricing with evidence supporting your asking price  - including comparables, recent asking prices of nearby homes and a handle of current market conditions.  Give them statistics from your local market about how long homes are taking to sell and how much they are going for.  Know your home’s value.  Know the price you are setting is in line with your home’s actual value.  Realistic pricing based on sold comparables in the last six months illustrates to buyers that you understand today’s market.

When deciding on the price of a home, it’s important to have an understanding of the market conditions at work in the area where the property is located.

You must also take into consideration how long the listing has been on the market.  If the property is new on the market, there might be a lot of interest from other buyers so you should be more aggressive with you r initial offer price than you would be if the property had been on the market for months with no interest.

2.  Know your competition and have your home showing in top condition- get a sense for how similar homes in your neighborhood have been selling.  Buyers are very savvy with market times and available inventory.  Home sellers should take the time to visit competing properties at open houses, as well as visiting new home sites in the area to see what home builders are offering as incentive packages.  It’s important to study the competition.

3.  Prepare options beforehand and be adaptable.  Prepare some options that you can suggest if your preferred solution is not acceptable.  Anticipate why the other person may resist your suggestion, and be prepared to counter with an alternative.  Decide before offers come in, what your strategy is for dealing with give-back requests. 

4.  Have a pre-inspection report handy.  Save time, hassle and surprises down the road by knowing exactly what state your home is in before you post the “For Sale” sign.  Even minor repairs can complicate or delay your closing.

5.  Keep emotions out of it – know that not all home improvement projects increase the value of your home dollar per dollar.  It’s normal to become emotional during negotiation that is important.  However, as we get more emotional, we are less able to channel our negotiating behavior in constructive ways.  It is important to maintain control.

Be able to see things objectively as a buyer will.  Remember that a buyer has many choices and will be seeing many other homes before deciding what to buy.  To them, your home is just another house. 

For a successful negotiation process, you need to detach yourself from the emotional ties you have to your home.

6.  Negotiate the terms – Consider offering the buyer more money for the down payment in the form of a seller-financed, low-interest “carry back” loan, which is financed through a second mortgage.  Don’t worry, you will have the right to foreclose and retake the property if the buyer defaults on the loan.

7.  Negotiate with cash – offer incentives such as offering to pay buyer closing costs.  Offer to pay a portion or all of his or her nonrecurring closing costs such as loan origination fees, title insurance and the like.  These costs can amount to 3-5% of a buyer’s total purchase price. 

8.  Know what the other person wants – Offer to move out in 30 days instead of 60 or offer to close earlier and give the buyer the home sooner.  Or offer to leave all the major appliances behind or other items you previously decided to take with you.  Be willing to work within their wants and needs to put the deal together.

Since we are trying to find a solution acceptable to both parties, we need to understand the other person’s needs, and wants with respect to the issue.  If we don’t know what the person needs or wants, we will be unable to negotiate properly. 

Use questions to find out what the other person’s concerns and needs might be.  In addition, the other person needs to know what you need.  It is important to state not only what you need but why you need it.  Often disagreement may exist regarding the method for solving an issue, but not about the overall goal.

9.  Be vague on reasons for selling your home – silence is a very, very powerful aspect of this skill, both to collect information as well as gain commitment and uncover objectives.

10.  Don’t be confrontational or try to win at all costs – a good negotiator wont; take things personally.  Use objectivity, it’s easier.  We have a tendency to get off track by focusing on how difficult or obnoxious the person seems.  Once this happens, effective negotiation is impossible.  It is important to stick to the issues, and put aside our degree of like or dislike for the individual.

Negotiating is a complex process but one you can definitely master.  Negotiations need not be confrontational.  If you follow the tips above, you will find the process less intimidating.  Don’t be the obstacle to selling your home. 

As a licensed Realtor for the past 16 years, Catherine DeGeorge, owner of has helped hundreds of people with negotiating their home purchase price.  You can also gain the confidence you need and learn how to get the most money when you sell your home by mastering the negotiating techniques. 



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