Negotiating
To negotiate with confidence, the key is to be well prepared. Start by making sure your asking price is realistic and reflects the fair market value of your property. Have the appropriate documentation to back this up. This information will speak for itself when talking price with your potential buyer.
Remember that negotiating is not a confrontation between you and the buyer. The goal is to find common ground. You get there by discussing your respective expectations. Here are three tips to ensure that the negotiation process goes smoothly.
1. Keep an open mind
If an offer seems too low, you could use that as a starting point for your discussion with the potential buyer. Rather than dismiss the offer outright, consider it evidence of the buyer’s interest in your property. Since they made an offer, it’s very likely that they’re interested in your home. So there must be a way to reach an agreement if they want to buy it. You could get back to the buyer and share your expectations.
2. Prepare your arguments
Have on hand the documents that will let you justify your asking price, like your analysis of comparable properties, an appraisal report or renovation invoices. Ultimately, the buyer must feel convinced they are paying the fair price for your home. If you list a higher asking price than your competitors, make sure you explain the discrepancy (e.g. larger lot, renovations completed, inclusions), and show the buyer the benefits of these additional features.
3. Seek solutions
Your goal is to sell, and you’re ready to do so under certain conditions. The buyer wants to buy your home and has their own criteria. The purpose of negotiating is to find win-win conditions for both. By talking, you could discover for instance that the buyer would love your home but can’t afford the asking price, because they need cash to furnish it. One possible solution if you want to stick to your list price would be to include some furniture or appliances in the offer to purchase.
Negotiate verbally or in writing
Dealing directly with the buyer, without a go-between, is very interesting because it lets you agree on the terms of the sale and then fill out the offer to purchase together. There is a contract as soon as you accept the offer to purchase, even if it’s done verbally. Putting your offer on paper is proof of this agreement. It’s also the document you’ll provide the notary finalizing the transaction.
If a buyer chooses to submit an offer to purchase in writing to launch the negotiations, you can respond with a counteroffer. This form lets you modify the terms and conditions included in the offer to purchase, for instance including or excluding certain items, modifying the price or changing the possession date. Once you’ve sent your proposal, the buyer can either accept it, refuse it or respond with a new counteroffer, and so on.
Learn more in the article The offer to purchase.
Points to negotiate
These are the key points you will have to agree upon with the buyer:
The sale price
Since you will have determined your property’s value and set the base price below which you refuse to go, all that’s left to do is reach an agreement.
Learn more in the article Setting your price.
Possession date
Some buyers need to take possession quickly, while others prefer to wait several months. Identify your own needs and discuss them with people coming for a home visit, so you can quickly determine whether or not an agreement will be possible.
Conditions
Most offers include conditions. You will also have to discuss these with your potential buyers. The most frequent conditions found in an offer to purchase are the buyer providing proof of financing, the buyer selling their current property and your property being subject to an inspection.
Learn more in the article Conditions in an offer to purchase.
Inclusions and exclusions
Be sure to make a detailed list of the items you’re willing to sell, along with their value, to discuss this with your buyer.
Negotiating with the buyer's agent
Some buyers choose to be represented by a real estate agent to buy their future home. The main difference is that you won’t necessarily be talking to the buyer but to their agent. The agent is sure to be present during the home visit and will be the one submitting the offer to purchase on behalf of their client, using their own forms.
You should know that the payment of the real estate agent can also be negotiated between the parties. The agent’s commission could be paid by the notary finalizing the transaction from the price of purchase. You should therefore check whether the commission is included in the selling price, to make sure the amount that will be left in your pockets is satisfactory.
Learn more in the article When your buyer has an agent.
DuProprio tip
Be clear about your intentions, ask the right questions and check the contents of legal documents. These steps will prevent unpleasant surprises when dealing with your buyer’s agent. To understand the foundations of a good negotiation, don’t hesitate to contact our team of real estate coaches.
And, before you sign a document, especially when it’s presented by a buyer’s agent, contact the DuProprio notaries*or a notary in private practice. They’ll help you better understand the contents and help you make sure it abides by the terms of your agreement.
Make an appointment with our experts at 1 866 387-7677.
* Depending on the package selected.