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Your house sale negotiations

comparing costs table New Page 1

House sale negotiations can be a minefield...

Throw away all the books you have on negotiating and start again.

Why? House sale negotiations are stressful, emotional and expensive. Need we say more?

Most of the books on the subject are too hard-nosed to be of much value to the private seller. Sure, some full-time investors might like to go for the jugular. But ask yourself. Will that get you what you really want?

It's no coincidence that the leading trade magazine for estate agents is called "The Negotiator". Having a third party involved to handle house sale negotiations can really diffuse tensions. The only problem is that the estate agent has their own agenda and the best negotiators are by the their very nature independent.

You are selling privately. You are on your own. Let's first get the lie of the land..

The dynamics of house sale negotiations..

Everyone wants to think they are getting a good deal. So you want your buyer to believe they are getting a good deal. Or even better, that they're lucky to clinch the sale...or even to have found your house.

So what does a good deal mean for the buyer? Unless your buyer falls in love with your house it's likely they will want to negotiate. This can become a bit of circus. If you remember it's a process and hardly ever sorted with one touch, then you are approaching your house sale negotiations in the right frame of mind.

Take a tip from professional house buyers..

When it comes to house sale negotiations experienced negotiators know you either negotiate on the price or the terms of the deal. Not both. Otherwise the other party is likely to feel the deal is unfair.

What does a good deal mean for you, the seller? It means finding a buyer who is financially able to buy your house and can move within your timeframe. It also means not giving away more money than you need to. Just pick your battles carefully. A buyer who attempts to negotiate on all fronts is naive or wasting your time. Find out which quickly.

A word about surveys..

It is not unusual for a survey to come back with comments about issues that have been drawn to the attention of the potential purchaser.

On average surveys knock between 1% and 2% off the initial agreed selling price (the offer which was made "subject to survey") of a property.

How should you deal with this? If possible ask to see a copy of the relevant extracts from the survey. For the purposes of your house sale you should be most concerned with those issues coming under the "Action" section of the survey. Some issues will be marked under "Urgent matters". Others "Further investigation". For the purpose of your negotiations ignore those items listed under "Maintenance considerations". You should have already factored items such as a new kitchen or boiler into your price.

Surveyors are naturally cautious...

This means that most period properties will have a relatively long list of items under the "Further investigation" heading.

Here we are really concerned with those items listed under "Urgent matters". For example, the roof may have question marks over it.

You have one of three options at this point. Ignore the results of the survey because you were aware of these issues and factored them into your price, ask for quotes for the remedial work required to fix the problem or immediately deduct a sum from the asking price.

The choice is yours.

Top ten tips for your house sale negotiations..

When selling privately you can't go far wrong if you:

Build empathy with your potential buyer. Ask lots of questions. Get a sense of why they want your house and what is important to them. Understand their concerns.

Decide in advance the minimum you are prepared to accept and assess where the balance of power lies. If you want a quick house sale the balance of power will tend to gravitate to the buyer. However you can mitigate this to an extent by working out what's important to your buyer. They may want to move quickly too. Or you might be lucky - there might be a queue of people lining up to offer you a quick sale.


Never be the person who mentions price first – he or she who does loses the upper hand. Try to play it cool. This assumes you have your pricing correct to begin with.


4  If possible try to involve other people in the negotiations (fictitious or other wise). This paves the way for you to play good cop, bad cop if necessary – there are many variations... including “I’ll need to ask my partner/wife/dog.”


Don’t over-react to offers. This usually means verbally but also watch your body language which can be a real giveaway. A silence is worth a thousand words here. If an offer is on the low side the famous builder’s sharp intake of breath works wonders to signal your feelings.

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6  Never automatically offer to split the difference as a way of trying to seal the deal. Chances are you’ll give away more than you need to...But..


7  You can offer to split the difference if you sense it's an easy way to close the sale and you're not giving away too much.


Be very clear about how you have pitched your asking price and how you can justify it. If it's the price you actually want, can you defend your price? Can you defend it even in the light of any issues uncovered by the survey?


Don't get so hung up on "winning" - you risk losing sight of your objective - a quick house sale. It's really not a battle. Try not to become too emotional. Harder to do than say of course. But if you don't remain at least 50% detached you risk winding-up your buyer during the house sale negotiations.


10 You may find yourself being asked to lower the price. You should if you think it's justified (remember try to empathise with your buyer) and if you don't want to lose this buyer.

But not all concessions have to be financial. Think about trading fixtures and fittings, date of completion and so on. It really comes back full circle - find out what your buyer really wants.

A word of warning..

If you need a quick sale you can find yourself walking a tightrope during your house sale negotiations. You should be honest and open with your prospective buyer. But do not signal your desperation. It's like a red rag to a bull.

In these situations (its counter intuitive we know) selling to a professional house buyer could be more straightforward.

Broadly speaking, their investment goals and your circumstances rather than your desperation will drive the agreed price. Whenever issues become personal or are driven by issues of ego, house sale negotiations become more tricky.

 


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