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Real Estate Negotiating for
Sellers: Three Key Strategies
For by thy words thou shalt be
justified, and by thy words thou shalt be condemned.
Matthew 12: 37
Everyone wants to win the
negotiating process. No one wants to be in the
position of losing, including your buyer. The most
successful negotiators utilize a win-win strategy.
This strategy provides for meeting the needs of both
parties to an agreement, allowing both to “win” in
the negotiation. Let’s examine the seller side of
the negotiation process and discuss some strategies
that allow the seller to position themselves in
their best negotiation stance.
The first strategy is to start with
a fair price. Many homeowners have adopted the
stance that they should offer their home at a fairly
high price, allowing them to negotiate down the
price so the buyer believes they are getting a great
deal. If the property offered for sale is the only
one available in town this strategy might work.
However, home buyers usually have choices and are
not likely to spend anymore money than they have to
in order to obtain real estate that meets their
needs. Buyers will just find another comparable
property priced more reasonably. Pricing too high
gives away the negotiating power of the seller
because they are viewed by buyers as unreasonable or
unrealistic before negotiations can even begin.
Pricing with the market sends a clear message to the
buyer and their agent that the seller knows the real
estate market and knows the value of their home.
The most advantageous time for the
seller is when the home is first listed. This short
period usually attracts the most traffic. If the
price is out of line, traffic diminishes and buyer
agents or REALTORs stop bringing their clients to
see the property. Some savvy buyer agents will use
the overpriced home as the “first visit” so that
when their buyer visits the reasonably priced
properties they are more likely to commit to writing
an offer. If the seller has a lot of traffic but no
offers, the seller may want to investigate the true
market value of the home before buyers lose
interest. Most over-priced selling strategies result
in buyers finding other options. Over-pricing with
the thought of reducing the price later still
results in the loss of many potential buyers who
have already found substitute properties at market
pricing. Over-pricing is not a win situation for the
seller or the buyer.
Selling property at a price that is
to low results in a “win” for the buyer but a lost
opportunity for the seller. The price should be
determined by current market value. This value is
determined by recent sales prices of comparable
homes. Offer the property at market price allows for
a “win” for both buyer and seller.
Real Estate Agent
The second strategy is to utilize an
licensed agent. There are two major reasons for
employing this strategy—marketing and preservation
of negotiating power. Marketing is challenging work.
Professional marketers spend years gaining their
skills. The marketing of real estate is one of the
most difficult professions. In fact, statistics show
that 87% of the properties originally offered for
sale by owners eventually list with a REALTOR.
Preserving negotiating power is essential. It is
very difficult to negotiate anything in which you
have a vested interest. By selling property
themselves, sellers place themselves in the position
of answering buyer inquiries personally. Much of
what a seller discloses to a potential buyer weakens
the negotiation power of the seller. Corporations,
professional athletes, actresses and news anchors
use agents to represent them in the negotiation
process to limit their personal involvement.
Utilizing an agent places them in a better
negotiating stance than if they attempted the
process on their own. The major reason for
self-representation is to save money. Ironically
this is usually not the case.
The third key strategy is to
determine the buyer’s needs and priorities. If you
are aware of the buyer’s viewpoint and can see
things as they see them, you are more likely to
propose solutions and counteroffers that are
favorable to your position and yet also acceptable
to the buyer. A buyer with an urgent move-in date
may be willing to pay more closing costs. Another
buyer who wants to stay under a specific price may
accept forgoing a cosmetic repair. It is wise to
consider all options available that can meet the
needs of the buyer while still preserving the
Obtaining a win-win for both parties
is essential in negotiations. By setting the price
at market value, enlisting a licensed REALTOR, and
determining the buyer’s needs, sellers can position
themselves into an advantageous selling situation.
Barry J. Preusz
| Residential Specialist
1218 East 7800 South
Salt Lake City, Utah 84094
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