How to Sell Property
Negotiating the Price - For Sale by OwnerWhen it comes to how to sell property for sale by owner, our couple, have learned a great deal.
Joe had just finished taking the fridge, stove, washer and dryer out of Bert and Helen's offer to purchase contract and was feeling rather proud of himself.
Now, it all boiled down to the purchase price.
If you have been following our story of how to sell property, the buyers had offered $250,000.00 for the property which had an Certified Appraisal for $275,000.00.
The closing date was fine. All the other conditions were fine, now that the sellers had won their fridge and stove back.
There was a property inspection clause, but our sellers did not find any reason for concern.
We continue our story about how to sell property with our for sale by owners about to discuss the price.
J: As you can see here, (pointing to the yellow highlighted market value price) a professional appraiser determined that our property is worth $275,000.00.
J: We felt that the appraisal was lower than we were willing to sell for, but we really have come to like you two and would be very happy if you owned this home. We know you would take care of the property.
J: That being said, we would be willing to sell the property to you for the appraised value of $275,000.00 Right Mary?
M: I agree.
Silence. Don't say anything. Shhhh Joe and Mary.........Shhhhh......
Wait for the buyers to speak. For more on this technique, go From How to Sell Property to The No Blink Rule
There was a long heavy silence with just the sound of the kitchen wall clock in the background. Tick tock, Tick tock. Then it happened.
Bert: Well, we certainly appreciate you wanting to sell your property for more. However, Helen and I aren't prepared to pay the $275,000.00. We would be able to offer you $265,000.00, right Helen?
Helen: If that's OK with you Bert, I'm fine with that.
How to sell property Tip #1 When it comes to negotiations, especially on price, these scenarios can go off in many directions. The ideas on these pages are meant to give you ideas on how to handle different situations, not to predict the actual outcome.
With that in mind, lets look at several options our sellers could try at this time. Our for sale by owners are very anxious to sell, so they don't want to lose the buyers.
M: We appreciate your offer Bert and Helen but I guess to save you some time, we might as well stop here. As we said before, the Certified Appraisal is $275,000.00 so that would be the least we would expect a buyer to pay.
Then our sellers would go into the silent mode again and wait for Bert or Helen to speak.
The buyers could do one of the following:
- Get up to shake hands and leave. (YIKES!)
- Ask if they could go outside or to another room to speak privately to each other. (a good sign)
- Offer a higher price of say, $270,000.00 (a good sign)
- Stick to the $265,000.00 and throw things back into the seller's court. (some more work to do)
- Agree to pay the $275,000.00 (Wow, didn't see that coming!)
- Agree to the $275,000.00 but they want the appliances back. (See I told you they might come in handy) :)
How to sell property Tip #2 Always keep in mind that the 1st offer on a property, is usually your best chance to sell for your best price and terms. In my personal estimate, the odds are close to 90% of this happening. Always work the 1st offer to the bitter (or pleasant) end.
Although a property is worth $xxx regardless whether it is sold through a Realtor® or for sale by owner, when you sell for sale by owner, you have a little more wiggle room.
Keeping that in mind, let's say our selling couple have invested $800.00 to this point selling for sale by owner. If they listed with a Realtor® at 5% commission (we won't add in any applicable taxes) $275,000.00 would net them $261,250.00.
Therefore, if they let the property sell for say $268,500.00, they would still net $267,700.00 or $6,450.00 more in their pocket.
Our sellers asked to be excused and leave the room for a few minutes to "discuss" things. Even if you already know what you are willing to sell for, it's a good idea to leave for a few minutes. This plants the idea that you are really having a struggle compromising on your price to sell.
M: Well, we have talked things over and we would be willing to sell the property for $272,500.00. Fair enough?
How to sell property Tip #3 When you make a counter-offer, when negotiating at the kitchen table, always try to close on that offer by saying something like Mary did. Hold your hand out to shake hands at the same time.
Now Bert and Helen disappear to discuss things and return to the table.
Bert: Helen and I have discussed things over and we are willing to go as high as $270,000.00 but that's as high as we will go. (A Big Bluff?) Maybe. 
Our heros are close. They can see the how to sell property "end zone".
Things are looking up for our couple. They want $275,000.00 for the property and Bert and Helen have come up to $270,000.00. Should they except this offer? Well, maybe. But hey, they came this far. Why not try to stretch things just a bit further.
M: I'll tell you what. Why don't we split the difference and we'll settle for $272,500.00. Is that OK with you Joe? I'd really like to let Bert and Helen enjoy this house.
J: If you're OK with that price, I'm willing to flex a bit as well. OK guys. Should we finish up the paperwork and get things rolling? (holding out right hand to shake Bert's hand).
How to sell property Tip #4 When you get close to the price you want, it's almost always worth that extra little push to do the split. This works extremely well if the difference is quite small. If it's say $2,000.00 difference, a split 50/50 should work almost 100% of the time.
Lets look at another possible solution on how to sell property shall we?.
Our sellers could have tried the give and take method, instead of the 50/50 split. This is another reason you want to pay close attention to body language when a buyer is looking at your property.
M: I'm sorry Bert and Helen. We can't budge on the Certified Appraisal price. However, I'll tell you what we might be able to do for you. Let's keep the price of the property at two seventy five and we'll throw in those 4 appliances you wanted. Is that OK?
J: You're the boss Mary. Let's do it and get things rolling. (again hold out hand to shake)
And that, Ladies and Gentleman, is why Joe and Mary negotiated so hard to keep the appliances. If they just gave them away at the start, they would have nothing to bargain with would they?
In this scene on how to sell property, the final outcome was all parties to the transaction signed the new contract with the selling price of $275,000.00 including all 4 appliances as viewed by the buyers.
Our happy couples had some more small talk and discussed their next move. They all agreed they needed to take their paperwork to their respective lawyers in the morning for review.
After Bert and Helen had left, Joe and Mary had the most wonderful big hug!
THE END
For more detailed information about negotiating the "nitty gritty", go to The Final Negotiation Steps
If you have landed on this page and want to follow this story in sequence, please proceed to #1 below for the whole story.
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