While I was selling my house, a real estate agent friend gave me some very wise advice. He said, “In the current market, having someone want to buy your house is an amazing thing. Don’t underestimate it.”
He’s right. In a buyer’s market, sellers will have to be flexible.
When selling your house yourself, negotiating over price is as simple as sitting down and having a conversation. The buyer tells you the price they want to pay, and you counter with your preferred price.
Don’t be at all surprised if a potential buyer offers A LOT less than your asking price. The expectation out there is the asking price is only a starting point. This is why it is so important you decide beforehand on the lowest price you will accept, and have a current valuation so you can, if necessary, prove to the buyer your price is reasonable.
So what to do if you have an extremely low offer? It’s up to each individual seller to balance their reasons for selling against the money they might possibly gain if they hold out for a buyer prepared to offer more. By holding out for another buyer you might gain tens of thousands, but by letting a firm buyer go, you risk not selling your house at all. Your decision will depend on your individual situation.
Personally, when faced with a low offer, I decided I would accept it, because it was the amount I would have got if I’d sold the house for the asking price using an agent and had to pay the commission. When I factored this in, I felt a lot better and happily sold the house.
But it’s not just price you need to negotiate, it’s also the conditions of sale. A great price can be downgraded by difficult conditions, and likewise, a low number can be made much more attractive by easier conditions, or an unconditional buyer (the best kind!).
If there is a condition that puts real pressure on you – for example, the buyer wants the keys in two weeks – you could then renegotiate the price to take into account the fact you’ll need to find somewhere to live quickly. If they won’t budge on price, you can renegotiate a larger deposit. Then, if the sale falls through and you’ve uprooted your life to get out of the house in two weeks, at least you’ve got the deposit as a consolation. It goes without saying you should always try to get the largest deposit possible.
When you have reached a number you’re happy with, the buyer should enter their price and conditions on the Sale and Purchase agreement. Never sign this on the spot in front of the buyer. Conditions need to be properly worded and should always be checked with your lawyer. Send the sale and purchase agreement to your lawyer as soon as you can, and once when they have given you the go ahead, sign it.
What if it just doesn’t sell?
Selling your home is a tricky business. It’s hard to see the bad points in a place you’ve lived in and loved for years. But if your home has been on the market for four or five months with no result, it might be time to change your strategy.
Take a good hard look at the property. Do a really thorough audit of your home’s negative points. If you can’t see any, invite an opinionated friend over and tell them to let rip. You never know what might be getting in the way of selling your home. If your home has really tired interiors, it might be worth suspending open homes for a few weekends and sprucing things up. Likewise, if your garden is an eyesore, a few days of hard digging and planting some potted colour might make all the difference.
Be realistic
If your home has serious downsides, research them as thoroughly as you can. If your home is near a proposed motorway site, for example, make sure you know everything possible about the construction, and timeframe etc. Have all the council information on hand if people ask about it.
Target your market
If your advertising has been quite generic, now is probably the time to get down to specifics. If your home is a do-up, push this angle. If it would be ideal for renters or flatters, push this too. If it’s a candidate for a major renovation, be frank about it. You want to get people who are interested in what you’re selling through your door, not people who expected something else and will be disappointed.
Increase your advertising. It might be time to do more print advertisements, add more images and details to your TradeMe account, or look for other and better ways to advertise your home. If you haven’t already invested in professional images, perhaps now is the time. You could also look for someone to style your home for you (this could even be a friend with a good sense of interior space).
Think about price. Your home may be too expensive. It’s a tough realisation, but an important one in the current market. Even if you’ve had an independent valuation and have priced accordingly, you might need to review this to ensure the house is at a price point the market will accept. If your house is priced on a cusp, such as $403,000, I would strongly suggest getting the price under the nearest hundred-mark, even if it’s only by a few thousand. So you might price it at $398,000. When I used this tactic with my home, there was a surge of new interest in the property.
If you are becoming overwhelmed, it might be time to think about hiring a good agent. A major advantage with using an agent is they have access to marketing avenues you don’t, such as the Property Press, and websites such as realestate.co.nz. Your home will therefore be exposed to a whole new group of people. Also you’ll have the relief of handing over control of the whole process to someone else. You will have to pay the commission and advertising costs though, so keep that in mind. And choose wisely – ask friends for recommendations of agents they’ve used, and ask the agents themselves for references. Go to some of their open homes and see how they interact with potential buyers (and yourself).
Navigating the home selling process can be daunting, especially in a fluctuating market. Whether you decide to go it alone or enlist the help of a professional, remember to stay flexible, do your research, and be realistic about your property’s value and appeal. With patience and persistence, you can find the right buyer and achieve a successful sale. Happy selling!