7 Real Estate Negotiation Tactics That Work
Successfully selling your property is about more than getting offers—it’s also about navigating the negotiation process with savvy. Effective negotiation tactics can make or break a home sale, even in a great situation (like a bidding war). In this post, I’ll cover seven powerful negotiation tactics that will help you secure the best possible deal.
I'll also explain how you can use pricing as a strategic positioning tool and how the list price is just an invitation.
1. Aspirational Pricing
One pricing strategy is when you list it higher than the relevant properties while leaving room for negotiation. This strategy aims to attract a buyer who is willing to pay more than the perceived market value.
2. Perceived Market Value Pricing
Another pricing approach is listing your property in line with relevant comparables, especially in parity to those that are currently under contract. Current data show that this is where most sellers price their property in Central Ohio, as homes sold for an average of 96.6% of their original list price in January 2024.
3. Event Pricing
When you list at a price a little below relevant properties to stand out and to create an auction-like environment that generates offers and momentum, you can then aim to win with a negotiation advantage as opposed to a pricing advantage. This strategy has clear advantages that you should consider when listing your property.
4. Be Informed and Transparent
Knowledge is power in real estate negotiations. Stay informed about the current market conditions, recent sales in your neighborhood, and any relevant economic factors. When engaging with potential buyers, be transparent about your reasons for selling and any factors that may influence the negotiation. An open and honest approach builds trust and can facilitate smoother negotiations.
5. Create a Sense of Urgency
When potential buyers know there's a ticking clock on a home, it can encourage them to make decisions faster. You can do this by putting a deadline on your counteroffer (to start the clock ticking) and disclosing when you have multiple offers (to create a sense of competition). Another option? Try scheduling limited-time open houses or private viewings. By restricting access, you're subtly signaling that the opportunity is fleeting. Harnessing these tactics can instill a sense of urgency among buyers, prompting quicker and more decisive actions that can work in your favor during negotiations.
6. Stay Flexible on Closing and Move-In Dates
Flexibility in terms of closing and move-in dates can be a valuable negotiation tactic. Accommodating the buyer's timeline can make your property more appealing, especially if they have specific requirements or constraints. This flexibility can also position you as a reasonable and cooperative seller, fostering a positive negotiation environment and encouraging flexibility on the buyer’s part as well.
7. Hire Professional Representation
Having a skilled and experienced real estate agent by your side is perhaps the most crucial negotiation tactic. A seasoned agent understands the intricacies of the market, has honed negotiation skills, and can advocate for your best interests. Their expertise will be invaluable in navigating complex negotiations, handling counteroffers, and ensuring a smooth closing process. This may be your first or second time in a real estate negotiation, but it may be the 250th time for a seasoned agent.
In conclusion, successful real estate negotiations require a strategic approach and a thorough understanding of market dynamics. By implementing these seven proven tactics, sellers can enhance their position, attract more favorable offers, and ultimately achieve a successful and lucrative sale. If you're considering selling your property, don't underestimate the importance of effective negotiation – it could make all the difference in securing the best possible deal.