For nearly 15 years, sellers have been living the high life — a hot seller’s market that saw home prices rise 10 percent to more than 30 percent per year over the last five years alone.
Those days, at least for the moment, are gone. And in its place is a much more balanced market — if not a buyer’s market.
A balanced market means that there is about an equal number of buyers and sellers in an area. A buyer’s market means there are more sellers looking to sell than buyers who want to purchase their homes.
To attract buyers in either a balanced or buyer’s market, sellers need to whip their home into top condition, price it right, and perhaps even throw in a few goodies to get buyer’s agents interested in showing the property.
But when the first offer comes in, it’s time to do what you can to get the best price possible for your home without scaring off the buyer. If you want to negotiate from a position of strength, you’ve got to know your own motivation for selling.
Ask yourself the following questions: How quickly do I want to move? How quickly do I need to move? Knowing your motivations for moving, and how quickly you need to sell your home will help you negotiate more effectively with the buyer.
But not every buyer is the same. Just as you’ll have specific reasons for moving and a timetable you hope to follow, your buyer will as well. If you find out as much as you can about your home buyer’s motivations, it’ll go a long way toward helping you negotiate a better deal for yourself.
(And for buyers who are reading this, the reverse is true as well — know your seller and you’ll be able to negotiate a better deal for yourself.)
Here are some different types of home buyer personalities you may encounter:
-The Reasonable Buyer. These are folks who want to purchase your home at a decent price. They’re not out to get you for every last cent. They’ll start their offer at perhaps 5 to 10 percent below your list price.
-The Nitpicker, Non-stop Negotiator. This is the kind of buyer for whom the negotiations aren’;t over until after the closing. This buyer will try to wear you down by nitpicking every little detail of the contract and your home. His goal is to get your home for the lowest price possible — and then some.
-The Uninformed Overpayer. While every seller hopes to get one of these, the advent of the Internet makes it less likely you’ll run across someone who doesn’t know the true value of a neighborhood. But, you might find someone who is transferring in from a more expensive part of the country or who inadvertently lets you know just how much he or she loves your house.
-The Good Guy, Bad Guy. Buyers who come in couples will often adopt the “good guy, bad guy” posture in order to wear you down. One buyer will tell you how much he or she loves the unit and the other will hem and haw and talk about how much over budget it is.
-The Overprotected, Escape Hatch Buyer. This is the buyer who has a contingency for everything. He or she wants total protection in the deal and the right to withdraw completely for any reason.
Once you figure out what kind of home buyer you’re dealing with, you can come up with a negotiation strategy to counter any possible argument. The key is to figure out where you stand, and what’s really important to you.