A few days ago, we published “Mastering Negotiations As A Buyer With 5 Key Points” helping buyers understand the implications of the five major points in their offers. Today, we follow it up looking at the five key negotiation points for sellers.
When it comes time to sell your home, the difference between a good deal and a great one often comes down to skilled negotiation. At The Howell Group, we follow the proven Ninja Selling approach to negotiations, which focuses on five key points that can significantly impact your bottom line and overall satisfaction with your home sale.
Understanding these negotiation points from a seller’s perspective will empower you to make informed decisions and potentially add thousands of dollars to your final proceeds. Let’s explore each point in detail and see how they specifically impact you as a seller.
Price: Setting The Stage For Success
Everyone is going to think about price – it’s the big number staring your right in your face and is hard to miss. While price is often the first thing sellers consider, it’s actually a complex negotiation point with several nuances:
What Sellers Need to Know:
- The listing price sets expectations but rarely equals the final sale price
- Market conditions heavily influence your pricing strategy
- Price is connected to time on market – pricing too high can lead to a stale listing
- Buyers frequently use round-number thresholds in online searches
Strategic Approaches:
- Price your home based on comparable sales, not emotional attachment
- Consider pricing toward the bottom of key search thresholds (see example below)
- In a seller’s market, pricing slightly below market value can trigger bidding wars
- Build a small negotiation margin into your price without overpricing
- Prepare documentation that justifies your price (recent renovations, comps, etc.)
Example: Michael and Jennifer wanted to sell their home in a competitive neighborhood. Rather than listing at their target price of $499,000, they listed at $500,000 to appear in more online searches and to be at the low end of the search ($500-600K vs. at the top of the $400K range). The strategy worked – they received five offers within a week and ultimately sold for $499,000 – their original target price. (Be careful not to go too far over when using this strategy…pricing it at $525,000 for example, could leave you stuck on the market.)
Terms: Structuring The Deal To Your Advantage
Terms define how the transaction will proceed and can sometimes be more important than the price. There are many terms to consider and the art is to find balance between all of them to get the best possible terms that suit everyone’s needs.
What Sellers Need to Know:
- Terms include financing requirements, earnest money, and closing cost allocations
- The strength of the buyer’s financing directly impacts your risk level
- Earnest money represents the buyer’s commitment level
- Different financing types (conventional, FHA, VA, cash) affect your obligations
Strategic Approaches:
- Prioritize offers with strong financing pre-approvals or cash offers
- Request larger earnest money deposits to ensure buyer commitment
- Consider the value of buyer closing cost requests against the total offer
- Negotiate for shorter financing and appraisal contingency periods
Example: Patricia received two offers on her home: Offer A at $380,000 with an FHA loan and requests for $10,000 in closing costs, and Offer B at $375,000 with conventional financing and no closing cost assistance. Despite the lower nominal price, Offer B would net Patricia about $5,000 more and likely close more smoothly due to less stringent inspection requirements.
Closing Date And Possession Date: Timing For Your Benefit
The when and how of property transfer can significantly impact your moving plans and finances. These dates are important and can often be adjusted to meet both parties’ needs.
What Sellers Need to Know:
- Closing (and funding) date determines when you receive your proceeds
- Possession date determines when you must vacate the property
- These dates can be separated with lease-back agreements
- Your timing needs should factor into which offers you accept
- Tax implications may exist depending on closing date
Strategic Approaches:
- Align closing with your next purchase if applicable
- Request a lease-back agreement if you need time to move after closing
- Use timing flexibility as a negotiating chip for better price or terms
- Consider end-of-month versus beginning-of-month closings for prepaid interest
- Factor in potential delays when agreeing to tight timelines
Example: Robert and Sarah needed to sell their home but hadn’t found their next property. They accepted an offer that was $5,000 lower than a competing offer because it included a 30-day leaseback agreement at a nominal rate. This flexibility saved them the stress and expense of a double move and temporary housing, worth far more than the $5,000 price difference.
Inclusions And Exclusions: Clarifying What Stays And Goes
This negotiation point specifies which items remain with the property and which you take with you.
What Sellers Need to Know:
- Standard inclusions vary by region but typically include attached fixtures
- Items you want to keep should be explicitly excluded in the listing
- Buyers often assume items like appliances will stay unless stated otherwise
- Smart home devices, mounted TVs, and custom fixtures often create confusion
- Exclusions can become bargaining chips during negotiations
Strategic Approaches:
- Remove or exclude cherished items before listing the property
- Clearly document all exclusions in your listing
- Consider including certain items to make your home more attractive
- Be prepared to negotiate on “gray area” items like mounted TVs
- Use desired inclusions as leverage for better terms elsewhere
Example: David and Emma’s home featured custom light fixtures and a high-end refrigerator they wanted to keep. Rather than removing these items before listing, they clearly marked them as exclusions. During negotiations, they agreed to include the refrigerator in exchange for the buyers waiving their repair requests after inspection, saving approximately $3,500 in potential repair costs.
Contingencies: Managing Your Risk
Contingencies allow buyers to back out under certain conditions, creating uncertainty for you as a seller.
What Sellers Need to Know:
- Common contingencies include financing, inspection, appraisal, and home sale contingencies
- Each contingency represents a potential exit point for the buyer
- Contingencies can be modified, limited, or waived entirely
- Market conditions affect which contingencies you can reasonably reject
- Home sale contingencies create the most uncertainty for sellers
Strategic Approaches:
- In multiple offer situations, prioritize offers with fewer contingencies
- Consider lower offers with cleaner terms (fewer contingencies)
- Negotiate shorter contingency periods to reduce your time in limbo
- Request higher earnest money for offers with numerous contingencies
- Consider backup offers to mitigate the risk of contingency issues
Example: Laura received three offers on her home. The highest offer included a home sale contingency, meaning the buyers needed to sell their current home first. The second-highest offer had no such contingency. Although it was $8,000 lower, Laura accepted the second offer to eliminate the uncertainty of waiting for the buyers to sell their home – a decision that paid off when she learned the first buyers’ home sat on the market for three months.
The Art Of Counter-Offers: Crafting Your Response
When responding to offers, consider all five negotiation points as an interconnected package. Sometimes accepting a lower price makes sense if the terms, timing, and contingencies strongly favor you.
Think of each point as a weight on the scale – lean too heavy on one and the balance shifts drastically. Try to even out the usefulness of each negotiation point and create the best win-win balance.
Successful negotiation isn’t about “winning” on every point – it’s about achieving your essential goals while giving the buyer enough of what they want to close the deal. The best negotiations create win-win scenarios where both parties feel satisfied with the outcome.
As you prepare to respond to offers on your home, prioritize these five points based on your specific situation. If you need a quick, certain close, you might prioritize clean contingencies and strong financing over maximum price. If maximizing proceeds is your primary goal, you might be more flexible on timing and inclusions.
Your Next Steps: Expert Guidance Makes All The Difference
While understanding these negotiation points is valuable, having an experienced real estate professional advocate for you can dramatically impact your results. At The Howell Group, our agents are trained in the Ninja Selling approach and negotiate dozens of successful transactions each year.
We know how to highlight your home’s strengths, set the stage for successful negotiations, and skillfully navigate each of these five points to maximize your proceeds while meeting your timeline needs.
Ready to sell your home with confidence? Call The Howell Group today, and let’s work together to craft a winning strategy for your home sale that addresses all five key negotiation points.
