We all know that the housing market isn’t what it was two years ago. Houses are sitting on the market longer and prices are dropping across the nation. The problem is that you may be forced to sell your house for various reasons (re-locating, loss of job, ARM moving to a higher rate, etc.). Suppose you do have to sell your house in a tough market, what can you do to get the best price possible?
Scenario: Your house has been on the market for 120 days and you get your first offer. The offer comes in $20,000 less than your asking price. If you accept the offer you are set to lose $5,000. Do you accept the first offer without negotiating because you are afraid if you don’t accept it, you won’t see another offer for an additional 120 days?
This sort of scenario is commonplace in a bear market. The numbers will be different, but the story is the same.
One thing that you can do is use the buyers agent to feel out the offer. The buyers agent is in a great position. She understands her client and knows how firm the position really is. Knowing this, it is important to understand the buyers agent and her motivations. The buyers agent has two motivations:
1. The buyers agent wants a higher price for a larger commission. (Some people will argue that the are trying to get the lowest price for their client. I disagree simply because a lower price is a lesser commission and the buyers agent is in it to make money just like everyone else.)
2. The buyers agent wants to get her client to buy a house as fast as possible so as to make her commission. (She doesn’t make anything until the deal is done.)
Knowing the motivations of the buyers agent, we can now use them to get us (the seller) the best price that the buyer is willing to pay for the house.
To do this all you have to do is call up the buyers agent and start asking some questions about the buyer. Did they like the house? What were some of their comments as they walked through the house? (These two questions are for you to see if the buyer is emotionally attached to your house or just looking to get a good deal) Are there any other houses that they have made offers on recently? (Again, this questions is to see what sort of person is looking to buy the house. If they have made a few recent offers on other houses, chances are they are low-balling on all their offers looking for a good deal) I need to make a small counteroffer, how do you think you client will respond? (This question is great because you will be able to see what sort of price range the person really has and can afford. Notice how I said a “small counteroffer”. This lets the buyers agent know that you really want to get the deal done soon and taps into both of HER motivations.)
These are just a few samples of questions that you can ask. By asking the right questions, you can get a good feel for the offer on your house and whether or not you should accept it without making a counteroffer. If the answers to your questions are cold and it doesn’t seem that you should make a counteroffer, then your best option may be to accept the first offer and take a small hit because who knows when the next offer will come around. If you get a good response from the agent (the client LOVED the house, I think they could move a little on a small counteroffer, etc.) then feel confident to make a counteroffer to get a better price for your home.
