You’ve received your first offer! Now comes the crucial step of negotiating favorable terms. With a few key tips, you can be ready to counteroffer like a pro.
Selling your home can be a roller coaster of emotions, none quite as unsettling as awaiting purchase offers. You’ve put a ton of work into prepping your home for sale, setting a proper price and staging, and finally you are about to see the fruits of your labors. It is time for the beginning of the end!
Being ready to respond promptly to any and all offers requires a bit of preparation, but it can make all the difference.
A few tips can help:
Check Your Ego
While you may find an initial offer insulting on some level (most commonly price), do your best to avoid taking it all personally. You have someone interested in your home, that’s a good thing! It’s possible they are just fishing with a below-market bid. That’s OK, you can always reject an offer outright, or use your counter to level-set. Either way, this is just business, so managing emotions is important. No one is trying to put anything over on you, they are just negotiating the other side with distinct and differing goals.
Remember Sales Price Doesn’t Tell the Whole Story
While sale price is the likely the most contentious issue that arises from an offer, it is far from the only issue you should be tracking. Offers you receive will also spell out which appliances and personal property are included, closing date, contingencies and other important information.
Be sure to read the offer completely, and ask your agent to summarize the pertinent information beyond sales price, noting anything unusual. Any counter you send back to the buyer will have to address every issue, and all are negotiable-- including the ever-important sales price.
Know Your Buyers
Understanding the motivations of your potential buyers can help greatly in writing a strong counter. Your agent can prove invaluable in this process by having frank discussions with the buyer’s agent to define who is buying your home and help you address what matters to them.
Like with any negotiation, information about your audience can ensure your counteroffer factors in items they value and respects their intentions. A little empathy and understanding in this realm could be the key to making it all work.
Let Your Non-negotiables Drive (but not define) Your Counter
If you find any of the offer terms unacceptable, you’ll want to counter. When crafting your counteroffer it is important to know your absolute bottom line. The minimum you’ll accept for your home, and the terms that you cannot live without. While knowing these is important, your counteroffer shouldn’t necessarily include those as the terms. This is a negotiation, so make sure your counter is directionally better, but you may appreciate some additional wiggle-room later in the process. It is important to secure favorable terms in the offer phase because your work doesn’t end when it does.
Realize this Isn’t the End
Most offers will be written contingent on an inspection and prior to an appraisal. The results of both can move the goalposts on the negotiation and potentially lead to some additional work (and possibly expense) for the seller. By keeping this in mind when writing your counter, you can ensure that you are ready to address any issues.
To manage risks related to a buyer's inspection, some sellers opt to complete their own home inspection prior to listing their homes. In this manner they are able to identify any work they can anticipate prior to closing and price accordingly.
The Bottom Line
A formal offer is the beginning of the final phase of selling your home. Being prepared to promptly and effectively act on every offer is crucial to obtaining a favorable outcome. Keep in mind that you are not alone in this process. Your agent likely has years of experience and has reviewed 100s of offers. He or she will be able to provide guidance and support to help you determine if you should accept the terms, reject the offer outright or counteroffer.
Zach Adams has experience in the offer process that is unmatched in the west metro of the twin cities. He’s been on both sides of negotiations just like these and has the unique skillset you need to find common ground with a buyer and sell your home. Perhaps his best ability however, is his availability. He’s always reachable, engaged and ready to help sellers just like you.
To learn more about this process or any other component of residential real estate, Zach would love to hear from you. He can be reached directly at 612.656.9647