When selling your home, the price you agree on with a buyer, along with the real estate commissions you pay, will determine how much money you walk away with.
Strong negotiating strategies can help you get the best price when selling your home. Regardless of the strategies you use, it's important to do your homework and know the value of your home and how your local market impacts that value.
Key Takeaways
- One selling tactic is to stick to your list price in your first counteroffer.
- You may want to reject a first offer without making a counteroffer.
- To foster a sense of competition, you could only accept offers after an open house.
- When making a counteroffer, you can include an expiration date to force a faster response.
- If you agree to pay closing costs, then increase the purchase price.
1. Counter at Your List Price
As a seller, you probably won’t want to accept a potential buyer’s initial bid on your home if it’s below your asking price. Buyers usually expect a back-and-forth negotiation, so their initial offer will often be lower than your list price—but it may also be lower than what they’re actually willing to pay.
Most sellers will make a counteroffer with a price that’s higher, but still below their list price, because they’re afraid of losing the potential sale. They want to seem flexible and willing to negotiate to close the deal. This strategy can work in terms of getting the property sold, as thousands of sellers can attest, but it’s not always the best way to get top dollar.
Instead of dropping your price, counter by sticking to your listed purchase price. Someone who really wants to buy will remain engaged and come back to you with a higher offer. Assuming that you’ve priced your property fairly to begin with, countering at your list price says that you know what your property is worth and you intend to get the money you deserve.
Buyers may be surprised, and some will be turned off by your unwillingness to negotiate. You do risk having a buyer walk away when you use this strategy. However, you’ll also avoid wasting time on buyers who make lowball offers and won’t close any deal unless they can get a bargain.
Note
A variation on countering at your list price is to counter just slightly below it. Use this approach when you want to be tough, but are afraid that appearing completely inflexible will drive away buyers.
2. Reject the Offer
Another tactic to negotiating is rejecting the buyer’s offer without giving a counteroffer. To keep buyers interested, you can ask them to submit a new offer.
This strategy sends a signal that you believe your property is worth what you’re asking for it. If the buyer resubmits, they may make a higher offer if they really want the property—or they may submit the same offer or even a lower offer.
When you don’t counter, you’re not ethically locked into a negotiation with a particular buyer, and you can accept a higher offer if it comes along. For the buyer, knowing that someone may make a better offer at any moment creates pressure to submit a more competitive offer quickly if they really want the property. This strategy can be particularly useful if the property has only been on the market for a short time or if you have an open house coming up.
3. Try to Create a Bidding War
When you hold open houses, you can increase competition among buyers. After listing the home on the market and making it available to be shown, schedule an open house for a few days later. Refuse to entertain any offers until after the open house.
Potential buyers will expect to be in competition and may place higher offers as a result. If you get multiple offers, you can go back to the top bidders and ask for their highest and best offers. Of course, the open house may yield only one offer, but the party offering it won’t know that, so you’ll have an edge going forward with counteroffers.
While it is possible to field multiple offers on a home from several buyers simultaneously, it is considered unethical to accept a better offer from a new buyer while in negotiations with any other buyer.
4. Put an Expiration Date on Your Counteroffer
Putting an expiration date on your counter offers compels buyers to decide sooner, so you can either get your home under contract or move on. Don’t make the deadline so short that the buyer is turned off, but consider making it shorter than the default time frame in your state’s standard real estate contract. If the default expiration is three days, you might shorten it to one or two days.
While the counteroffer is outstanding, your home is effectively off the market. Many buyers won’t submit an offer when another negotiation is underway. And if the deal falls through, you’ve added time to the official number of days your home has been on the market. The more days your home is on the market, the less desirable it appears, and the more likely you are to have to lower your asking price to get a buyer.
It is the seller’s prerogative to disclose or not disclose whether they are involved in negotiations with prospective buyers. Disclosure can result in higher offers, but it can also frighten off a buyer. The seller is legally allowed to counter more than one offer at the same time, but they must include appropriate language letting all the parties know of the situation.
5. Agree to Pay Closing Costs
In a common practice, buyers may ask the seller to pay their closing costs. These costs can amount to about 3% of the purchase price. Some buyers don't have the cash to close the deal without assistance with closing costs, by they may be able to afford to take out a slightly larger mortgage.
When a buyer submits an offer and asks you to pay theclosing costs, you can counter with your willingness to pay but at an increased purchase price, even if it's above your list price.
Can You Accept a Higher Offer After You've Already Accepted an Offer?
In most cases, if a home is under contract, the buyer may back out but not the seller. It is generally illegal and unethical for the seller to turn to another buyer at this stage. In earlier states, a seller in negotiations with a buyer may legally accept a higher offer from another buyer, but this practice is still considered unethical.
How Does a Bidding War for a House Work?
A bidding war is when buyers compete to purchase the same home by trying to offer higher bids than other buyers. Bidding wars are more common when housing inventory is low and demand is high. Bidding wars can result in the sale of a home for a price higher than the original listing price.
How Long Do Homes Stay On the Market?
The average amount of time homes stay on the market will vary by market and may be affected by broader mortgage interest rate trends. You real estate agent can provide you with specific data about home sales in your are. As of Dec. 2023, the median amount of time homes were on the market was 61 days.
The Bottom Line
You can turn to several negotiating strategies to help you get the best price for your home, but the right strategy for you will depend on your local housing market and your property. Of course, the home also needs to show well and be in good condition. If buyers aren’t excited about the property you’re offering, they will be less willing to negotiate.A realtor can help you determine the best ways to sell your home for the best price.
