Seems like a crazy question, but one of the first factors you need to consider before you enter into negotiations with a buyer who has made an offer is what price you are willing to settle for at the low end of your home sale price range. As you moved through the deciding, preparing and marketing phases of your home selling process, you established a price for your home and advertised that price. If you receive a single offer at your asking price, there really is not much suspense. Unless the buyer doesn’t qualify for a mortgage loan or for whatever reason you feel uneasy about that particular buyer, you are ready to ride off into the sunset together.
But what if you receive an offer that’s lower than your asking price, and no other offers are in sight? Of course, your instinct might very well be to submit a counter-offer, but should that counter-offer be closer to your original asking price, closer to the offer or split down the middle?
To prepare for that kind of decision, you need to establish in your head the price below which you will absolutely-in-no-circumstances go. Ideally, that price will be relatively close to your asking price, say 85-90 percent of what you are seeking, but that number will be influenced by your need/desire to sell your home quickly or your ability to stay in the selling process for an extended period of time.
Most importantly, have a plan. Decide what the absolute lowest price you will accept is and build that into your thinking at every step of the way. You’ll only want to go that low if offers are scarce and you need to get your house sold, but you need to know your basement, so to speak, so if the time comes that it makes sense for you to accept that price you’re not shocked by it.
Back up Your Position with Current Comparables
Ideally, a potential buyer makes you an offer that is in your comfort zone for an acceptable selling price, you accept the offer and move into the closing process. But how often does the ideal happen? It’s more typical for negotiation to be involved, and your process for developing and making a counter-offer can make or break a sale.
Before you make a counter-offer, be sure you’re prepared to back up your numbers by updating your information about comparable homes for sale and recently sold in your neighborhood, focusing on homes you know are similar to yours and homes you know are inferior to yours for very specific reasons.
If you’re flexible about your selling timeline, establish a high “low” price and stick to it, even to the point where you eventually consider taking your home off the market for a time to see if home prices will inflate in the coming months or years.
