Closing the Deal
There are four key stages to go through as you close the sale of your property:
* Negotiating the terms of the sale
* Contract of Sale and Deposit
* Final inspection by the buyer(s)
Negotiations are an inherent part of the property sale process. Being properly prepared for the negotiation process helps to ensure a more satisfying outcome. After all the work you’ve put into marketing your home, you don’t want to be tongue-tied when it comes to negotiating with potential purchasers. Ideally, you want a “win-win” outcome, with both buyer and seller happy.
You should determine in advance how much to ask for the property and how low you are prepared to go in negotiations. You can be flexible and responsive to many requests but calmly hold your ground on those items you have pre-determined are not negotiable.
Avoid saying “no” (some people don’t respond well to that word) but instead focus on explaining “why this would not be possible”. Respond respectfully and confidently to all negotiation requests, having prepared well in advance so you don’t have to make important decisions on the run. Avoid being confrontational or defensive but project a reasonable and professional image to disarm even the most aggressive negotiator. Maintain good eye contact, listen carefully to the prospective purchaser and respond politely, without interrupting them when they are speaking.
Most importantly, put all negotiation decisions in writing, listing terms and conditions agreed upon between vendor and purchaser, noting who will be responsible for what and outlining any details yet to be determined.
Selling your own home requires a lot of work – but with the right preparation and support, it can also be a profitable and satisfying exercise for both seller and buyer.
Here are some points on negotiations to consider and do some advance preparation:
Of course you know what your asking price is. But how do you justify and explain it? What reasons do you have? Being able to explain your Asking Price succinctly helps bring buyers closer to your figure than theirs.
You have to be willing to go below your Asking Price (this is, after all, a negotiation). But to what level will you go? You will not want to reveal this number, but it helps for you, and your partner, to be in agreement on this beforehand.
What is your preferred settlement period (30, 60, 90 days or longer?). How flexible on this are you willing to be? Why or why not? What will you ask for in return if the buyer wants a different settlement period than you? What will you give in return to ensure you get the settlement period you want?
How will you react if you get an offer at or near your Asking Price in the first few days? Will you accept or will you rethink your pricing strategy? How long is their offer good for? Can you get the offer period extended if you want?
What will you give in return? if you receive your target price in the first few days? Will you take it or will you wait? How long is the offer good for? What will you say to the people making the offer?
What if you receive offers from two interested parties? What will you do? Will you take the best one, or give the other party a chance to counter offer? What if one the highest offer is subject to financing be obtained? Will you accept this with the hopes that the buyer will get the necessary financing, or will you take the lower offer that already has funding in place?
There are many good books and Internet articles on negotiating that are worth reading if you are not experienced in this area. The tips below provide a general guide only and you will need to determine which ones are applicable for your usage:
- Preparation is important: the preparation work above will put you in a better position to engage in the negotiation process. This will help you have clarity in knowing what you want and what you are willing to accept.
Also, have an understanding of what you are willing to do to close a sale. Will you fix a broken fence to close a deal? Will you leave behind the refrigerator if requested? Will you professionally steam clean the curtains before they move in? Will you allow their repairman to come in to start work before you have moved out? Any of these non-pricing arrangements can be important to a buyer and, if acceptable to you, need to be detailed in the terms of the Contract of Sale.
- Listen more than talk: while it is natural to be excited and wanting to “sell” all the benefits and features of your property, it is best to listen to the buyer for they will often provide clues to you on how much they desire your property. Ask relevant questions so you can find out how close they are to making a purchasing decision. Have they been looking long? What attracts them to this region or neighbourhood? What do they like best about your property? How does your property compare to the house they are currently living in? What is the price range of the other properties they have been looking at? In which other areas have they been looking?
- Handling objections or issues: buyers will naturally point out particular faults in the property or raise objections to terms on the Contract of Sale. Sometimes these are raised merely as a negotiation ploy in an attempt to get you to lower your price or to accepting something that they want (for instance a longer settlement period). Remain unemotional about these and respond to each one objectively. Do not respond rashly and, if you need, simply respond that you need time to think about certain points or comments before you can give them a definitive response.
- Written offers only: offers are not legal and binding unless written and signed. No matter how genuine a buyer may seem during an inspection, politely advise them that you will only accept signed written offers. Give them your email address or fax number and ask them to forward their official offer to you as soon as they are ready.
Be willing to walk away from negotiations: if you are not getting the minimum price and terms that are acceptable to you, be willing to step aside from the negotiations. There is nothing stopping you from re-entering the discussions with the prospective buyer at a later stage, unless of course they are no longer interested or have found another property that is suitable for them.
Lastly, if the buyer has a professional negotiator or a Buyer’s Agent working on their behalf, you may want to consider engaging someone of equal footing to be on your side. However, this is rare and with proper preparation you should feel confident in closing the deal yourself.
Please read more in our final article after this one……