Pricing & Negotiating
Selling valued personal property, especially a home, can be hard on one’s psyche. We bought these items because they met our needs or made us feel good. We become attached, and it can be hard to let go. Therein lies the biggest challenge for many sellers.
The best advice I give my clients is to change how they view their home when it comes time to sell it. Strategic, rational thinking should supercede emotional decision making. It helps to think of your home as a financial asset, like a stock or bond. Your goal is to sell that asset at a price and with other contractual terms that best meet your needs. While easier said than done, doing so will allow you to make decisions that further your goal.
By minimizing sentiment, it will be easier to make decisions throughout the selling process. This includes where to spend money to maximize your home’s value, how to decorate to appeal to others, how to establish the price point and how to negotiate with a potential buyer.
When potential buyers tour your home, their realtor is expected to provide feedback on what the buyers liked, and didn’t like, about the property. Sometimes the house is just not right for the buyer. The kitchen may be too small, the home may lack in-law suite, or it may not be easily retrofitted to accommodate a person with a physical disability. That’s fair enough. Other times, however, feedback is more subjective, and might even offend. The buyer might dislike your color scheme or fabrics, prefer hardwood floors over carpeting, or not appreciate your choice of fixtures or appliances. In such circumstance, set your emotions aside and work to overcome the buyer’s objections, as there is probably a deal to be made here. For example, you might offer to make some of the requested changes in return for a written purchase commitment. Or, you might shift the home improvement burden to the buyer, by offering to credit the buyer with money at closing to offset the cost of the desired changes. Or, you might include personal property in the deal, such as appliances, electronics or furniture.
Your objective should be to engage the buyer, and try to negotiate the price and other contractual terms that best meet your needs.
- Ask your Agent to prepare a Comparative Market Analysis to aid in determining your Listing Price. This data-driven work product will provide a suggested price range based upon similar homes listed and sold in your area.
- The Highest Price does not always equate to the Best Offer. Why? A competing offer might include a quick close, higher Due Diligence or Earnest Money fees, or no home sale contingency. Price is but one element to consider when determining the ‘best offer.’
- North Carolina provides for two types of financial consideration to be paid by the buyer at time of contract inception. Both will be credited to the Buyer at Settlement, which means they become part of his down payment. As the seller, it is often advisable to negotiate material amounts for both, so they compel the Buyer to consummate the purchase.
- Think of the first — the Due Diligence Fee — as non-refundable money paid directly to you (the seller) in return for taking the property off the market for a short period while the Buyer conducts inspections and appraisal. In North Carolina, the Buyer has the right to terminate the sales contract for any reason before the close of the Due Diligence Period (typically 21 days). If terminated, the Due Diligence fee is forfeited to you and you are able to put the property back on the market.
- The second, known as the Earnest Money Deposit, is held in trust until Settlement. Should the Buyer wish to cancel the sales contract anytime after the Due Diligence period, the Earnest Money will be forfeited.
- Require that everything be clearly agreed, in writing. This includes any sales proposals made to you, any counteroffers that you make and any agreements for personal property (appliances, fixtures, furniture, etc.)