For Sale by Owner Tips: July 2007

Negotiations are vital in any financial transaction. Whether you are a buyer or a seller, it’s essential that you know how to ask for the most appropriate terms and conditions that are best for both parties involved. If you’re a homeowner who is selling your home by yourself, it’s praiseworthy if you know how to negotiate well without offending potential buyers.

A successful negotiation concerning a real estate transaction entails knowing the basic negotiation techniques, the motives of the other party and adapting to their

The key to a good negotiation is being able to communicate your message clearly and effectively to the buyer. Developing a professional attitude without being too emotional about selling your property is as important. If you don’t agree to the buyer’s purchase price, engage him or her in negotiations. Ask for an explanation about his offered buying price if it’s less than your selling price. Did he or his agent checked the prices of comparable homes or did they find any defect in your property?

After considering the buyer’s position, you can then decide to lower a little your selling price. Be able to explain how you came up with your price as well. Make sure your calculations and figures are correct so that by the time you negotiate, you are in a strong position. Consulting with a financial advisor is a good step.

Learn about your home’s true market value. You can do this by hiring a professional appraiser with the proper license and experience to assess your home and give you a real market value. Another option is to ask real estate agents about listing your home for sale. They usually provide a comparative market analysis showing you the selling prices of similar homes in your neighborhood that recently sold.

Also, be open in discussing property defects. Do allow a home inspection if the buyer so desires. If the inspection reveals defects other than what you know, you can lower your price by a portion of the repair cost. But of course, you can always avoid this by maintaining the good condition of your home so potential buyers will not have any reason to offer a low purchase price. Repair obvious defects in your home before putting it on the market. Repaint walls, ceilings, doors if needed, thoroughly clean your home and remove all clutter and organize your appliances and accessories to create more space.

Be prepared to offer a good deal so that prospective buyers won’t need to ask for some major changes in the purchase agreement. You may only have to negotiate on some minor issues like the amount of deposit, the date for your moving out and the buyer’s moving in as well as the personal items included in the sale. Make the buyer feel that he is not spending so much for the house. Once you achieve this, the transaction will most likely have its closing on time.

Finally, negotiate only with potential buyers who have been pre-qualified for a mortgage loan. Don’t waste your time entertaining buyers who are not serious with their offer. You can ask prospective buyers over the phone if they are pre-qualified. Don’t be afraid to ask those who are visiting your house too. There’s never any harm in asking.

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