This is an article for anyone who plans to sell their house, commercial property, hunting land or farmland in the greater Detroit Lakes, MN area. But if you’re selling any of these lovely things in any other part of the world, then you’ll want to listen closely. We’re going to explain how you can negotiate the best price for your property!
Negotiation Is Key
“And in the middle of negotiations / You break down.” Those are lines from “You Never Give Me Your Money” by The Beatles. They do not constitute good advice when you actually do want people to give you their money.
Insistence is when you set a price for your listing and refuse to entertain any offer that doesn’t meet or exceed it. Negotiation is far more artful. It requires skill, tact, patience, research, communication, and intuiting what’s going on inside buyers’ minds. Even when it is done correctly, negotiation does not guarantee that you’ll sell your property for the highest price the market could possibly provide. But it will ultimately net you a larger check at closing – not bad for a technique which costs virtually nothing to practice.
How do you reach an agreement that’s most conducive to your bottom line? Here are five ways you can negotiate the best price for your property!
1. Understand Your Local Housing Market
You must determine whether your property currently occupies a seller’s, buyer’s or balanced market. Supply is insufficient to meet demand in a seller’s market, which allows sellers to list for higher prices in addition to making more stringent demands. In contrast, a buyer’s market exists wherever there are more homes than there are people willing to purchase them. Lower prices and greater allowances are in order when you’re marketing a house to an oversaturated market. True to its name, a balanced market is characterized by equivalent supply and demand.
At present, the United States at large is a seller’s market – although experts predict this could change in the near future. Keeping abreast of all the factors determining supply and demand in your local housing market can be extremely difficult, which is why we (admittedly unsurprisingly) advise partnering with a real estate agent in Detroit Lakes, MN.
2. Use Comps to Gain Invaluable Insight
We cannot overemphasize the importance of researching comparable, recently sold properties before you list. These are known as “comps,” and they provide crucial insight into what is going on in a constantly evolving housing market. When a buyer attempts to negotiate a significantly lower price – and you know that price couldn’t possibly exist in your area – you’ll be in a much stronger position.
Naturally, no other property is identical to your own. Even if two properties are the same in every conceivable way, they are necessarily in a different locations. Comping is therefore an inexact science, albeit a very informative one when it is performed by a competent real estate professional.
3. Use Upgrades as Bargaining Chips
Buyers seldom hesitate to point out all the things they dislike about a property. They aren’t just being picky by doing so. They are actively trying to chip away at the seller’s position, and compel them to bring their price lower.
Negotiation doesn’t entail ignoring every point of a buyer’s dissatisfaction. But it doesn’t mean rolling over, either. Counter their critiques by presenting a list of every upgrade you have made to your property. Buyers often overlook crucial features like water heaters, furnaces, central air conditioning units and roofs. If you have had any of these installed recently, pointing out as much helps to weaken the position the buyer attempts to place themself in by disapproving of cosmetic (and easily changed) features such as paint and flooring.
4. Waive the Inspection Contingency
An inspection contingency gives the buyer a set amount of time (usually 7 to 10 days) to inspect the property. If their inspector unveils something seriously wrong with the property, the inspection contingency gives the buyer the right to back out of the deal without breaching contract.
You can avoid this issue by doing a pre-listing inspection instead. In a nutshell, it involves hiring a neutral third-party home inspector to create a full inventory of every problem your property has. A pre-listing inspection lets buyers know what they’re getting into upfront instead of worrying whether an inspection will reveal a deal-breaking issue. And by reassuring skittish buyers, a pre-listing inspection can also significantly shorten the amount of time your listing has to stay on the market.
5. Partner With an Experienced Agent
Great negotiators aren’t born. They are forged in the fires of mercantilism (or diplomacy, in the case of politicians). Rather than hope you know enough to strike a great deal, hire a professional who is exclusively in the business of striking great deals.
As a novice to the real estate market, you definitely want to avoid the worst-case scenario of trying to negotiate against an experienced agent. A shark can convince you to part with a great deal of equity – and not realize it until long after the closing date has passed.
Are you selling a house, commercial property, hunting land or farmland in the greater Detroit Lakes, MN area? Contact Action Realty of Detroit Lakes today to engage a brokerage with agents who will expertly negotiate on your behalf. No one will take advantage of your good faith when Action Realty is on your side!