How to Fix Your Negotiation Strategy

Selling or renting a property For Sale By Owner (FSBO) or For Rent By Owner (FRBO) presents big room for negotiation. As you know, with a little help from beycome and a great FSBO strategy, you save 6% on the sale of your home in realtor commission fees. This represents thousands of dollars for the average buyer!

Negotiation could be tricky if you don’t know what you’re getting yourself into. We hope these tips present you with the information needed to price your home fairly in an FSBO (or even FRBO) situation and how to handle… less than ideal offers and counteroffers without a middleman.

First, Price Your Home Correctly

The first instinct might be to price your home low so it sells faster. It’s an obviously poor strategy because you wouldn’t really be making the most out of your property. Pricing too high, on the other hand, means receiving fewer offers in general. High-end price tags are immediately off-putting to the average buyer or renter. This is why pricing your property correctly from the beginning is vital.

A smart negotiator can begin by monitoring local data, such as property sales in your neighborhood. If you’re not sure where to get started, look up a few addresses near you on beycome and Find properties with the same number of bedrooms and bathrooms as well as those in the same general condition as your house. You also can use a Property price estimator

Let’s say there are 3 – 4 homes in your area priced at $284,000 – $286,000. The next set of properties begin at $300,000, so you begin with a price tag of $295,000 to stay competitive and leave a little wiggle room. You’re not married to your first estimate, though. With beycome you can easily change your FSBO price anytime.

Finally, get an appraisal for a more solid market value. While you list the FSBO property at $295,000, the appraiser values it at $285,000. Keep in mind the appraiser’s value is merely a guideline. You can actually use this figure to make sure a buyer never bids lower than $285,000.

Your First Offer

Being a strong negotiator means having a clear goal. Without a goal, there’s no way to measure whether or not negotiations are successful. For the purpose of this article, your FSBO goal is $288,000. Keeping the focus on this number will help with even the most difficult and stubborn negotiators.

Your first offer comes in the form of a letter drafted by either the buyer individually or the buyer’s representative or real estate lawyer. A firm offer states that the best crossbow buyer wants the property without any conditions or further negotiations. A conditional offer asks for certain conditions to be met before the purchase becomes official. For instance, a seller must arrange for specific repairs to be made before closing. All offers come with a deadline for a response.

You’re not obligated to accept the first offer. At this stage, many buyers simply “test the waters” to gauge your reaction. If the number is too low, you don’t have to walk away. Instead, keep a calm mind and approach them with a counteroffer.

Happy with the buyer’s first offer? Got everything you wanted? Great! beycome has a comprehensive guide about what to do once you’ve accepted their terms.

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Your listing price is $295,000. Your goal is $288,000. But the buyer only offered $285,000.

There are a few ways to approach this situation. You can start by finding a middle ground that works for both parties, like $290,000. Counteroffers also include other factors and contingencies that sweeten the deal, like offering to pay fees. A certain percentage of closing fees (such as half) or line item costs can placate a very determined negotiator.

Remember that research gives you a much better negotiating position. This can be used as concrete evidence as to why you’re asking what you’re asking. So if you need to bring up the results of the appraisal, the other similarly-priced homes in your area, or even the extra features on your FSBO property, don’t be afraid to do so. Using these three rules will help you keep a level head:

  • Be as objective as possible
  • Stay calm and focused on your goal
  • Remain tough, but professional

It is possible to be open and flexible during an FSBO negotiation. So if both parties come within a small number of each other’s offers, such as $1,000, perhaps it’s best to split the difference rather than drag out negotiations. This helps you keep realistic expectations. You may not get everything you want, but make sure you’re never on the losing end of a deal just to make the other party happy.

Finally, mental preparation. You’d be surprised how far confidence and a calm demeanor goes in a successful home sale. Don’t take “low ball” offers personally. Simply reject them. There will always be other buyers. If you need to walk away from a deal, you have every right. It shows the buyer that you’re serious about your conditions, and may even bring them back with a better counter offer.

beycome helps you pay yourself instead of an agent. Negotiate away.

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