Negotiating offers on your home…
After successful marketing and viewings of your home, hopefully the time will come when a potential buyer will make an offer on your home. It is almost unheard of for a buyer to offer the asking price, so here’s how to deal with negotiations…
When you put your home on the market, if you followed our advice in the Valuations guide, you will have asked for a little more than you realistically hope to get, but in the back of your mind you will have a minimum figure that you will agree to sell for.
Always remember that you are in charge in negotiations. You never have to accept an offer that you are not happy with, so don’t be afraid to turn down offers that are too low. If the buyer is serious – and if your house is worth more – they, or another buyer, will come up with a more realistic offer. Never let yourself get pressured into accepting less than your house is worth. Negotiate within reason – but stick to your guns.
If you have priced your home too low, you will probably get a lot of interest, with people making offers rapidly in the hope of securing a bargain. In such a case, you must play buyers off against each other. Let interested parties know you’ve had an offer – and for how much, and see if they will beat it. If your house is on the market for less than it’s worth, let buyers bid against each other to drive up the price to its true value. When the ‘bidding’ stops, chances are you’ve reached the home’s realistic market price and you should consider accepting the best offer.
Contrastingly, if you are asking more than your home is worth, you are likely to get offers much lower than the asking price. Every potential buyer will offer you less than you’re asking, but if you are getting lots of dramatically low offers, perhaps you have over-priced your home and should consider lowering to a more realistic level.
Having said this though, if you are confident your asking price is reasonable, do not be afraid to laugh off ridiculous offers. Chances are the buyer will know their offer is unlikely to be accepted, so you should not even give the time of day to those whose offers are absurdly below your home’s value. If they are seriously interested, they will come back with a better offer.
Ultimately, negotiating over the sale of a house is not much different to bartering over the price of a second-hand car. Aim as high as you can, but always keep in mind your minimum price (but never, ever reveal this to the buyer). After some negotiation, you will arrive at a mutually acceptable price. Ask the buyer to make a formal offer in writing and respond with a formal, written acceptance.
It is always important to remember though, that both you and the buyer can pull out of the sale at any time, whether an offer has been accepted formally or not. The sale is only binding once contracts have been exchanged.