Periodic tips and reminders to help focus your by-owner marketing and win your commission-free sale - from Canada’s by-owner web-site, www.privatelist.com.

THIS ISSUE:      Negotiations / Season’s Greetings!

ARCHIVES:     www.privatelist.com/newsletter.htm

NEGOTIATIONS

It may happen the first week you advertise or only after several months, but if you set a realistic asking-price, focus on getting the word out as widely as possible and adjust your marketing as necessary, your efforts at some point will attract an offer on your property. Here are some tips on handling the next step: NEGOTIATIONS!

Technicalities

Whether the back-and-forth is close-up and informal (you and the buyers WRITE the offer together around the kitchen table - see our guide), arms-length (they drop off an offer and leave), or something in between (they make an appointment to present the written offer and wait in the next room while you consider it), there are a number of basic facts that apply:

• a verbal offer ain’t worth the paper it’s written on: make sure you do your negotiating in writing;
   
• it is customary for you (and your lawyer) to be given 24-48 hours to consider an offer before responding, but don’t dally - an offer can be withdrawn at any time prior to its acceptance being communicated to the offerer;
   
• change the slightest detail in an offer, and that offer is dead: now you’re making an offer, which the other party is free to accept or reject, so consider very carefully before altering an offer that is at all close to your bottom line;
   
• you counter a written offer by crossing out or changing any details that are unsatisfactory, or by adding details that conform to your wishes; then you initial all changes. (Alternatively, you might write an entirely new counter offer and simply sign it.)

Basic Principles

Assuming your buyers are financially qualified to buy (you should have raised this issue with them during their walk-through) and that you genuinely wish to sell, the greatest danger you face during negotiations is having them collapse prematurely. To lessen that risk,

• respond to all offers: consider low-ball first offers as part of the game and no real indication of your purchaser’s ultimate position;
   
• keep the lines of communication open: if you counter, do so in a way that invites further engagement: “Please consider seriously these few changes and let us know what you think . . .” will be much more productive than issuing ultimatums;
   
• know why you're selling: having a clear idea of your absolute bottom line will help you avoid getting tripped-up by non-essentials;
   
• know the market, know your property: be aware of the level of sales activity in your area and of your buyers alternatives; be honest with yourself regarding your property’s condition and location;
   
• focus on your buyers’ needs: starting with their original phone call and continuing with their tour, try to identify what’s most attractive to them about your property, then emphasize those benefits when appropriate;
   
• work to develop trust: support your position with facts (an independent appraisal can be of real help here) and let your buyers know that you respect their situation and want to work with them to make their purchase happen.

Bargaining Points

Negotiation is not just about price! Items like the size and scheduling of the deposit(s), financing, closing and occupancy date(s), included or excluded chattels, bonuses like cash-back towards closing costs, and conditions relating to financing, inspections, repairs, etc. are opportunities for you to let the buyers WIN in return for their giving you what you want.

(Regarding conditions ("subject tos"), make sure they are specific about what has to be done and include definite deadlines: see our Offer To Purchase guide, as well as several other newsletters in this series for further details.

Purchaser Ploys

Don’t be upset by objections that purchasers may raise about the property, either as half-hearted negotiating ploys or genuine misgivings; just be prepared to respond to comments like:

• "You can afford to come down - you're not paying a realtor!" (You’re right - we’ve already offered some of that saved commission in our asking price, and if you and we can reach agreement, we’ll both save.)
   
• "We just can't afford a full price offer!" (Let’s sharpen our pencils: would $34 extra per month - the difference between our two offers in terms of monthly mortgage payments - really break the bank? Might any of your relatives be willing to help you with a small loan? What if we lent you the $4000?)
   
• "We're going to have to spend $10,000 on re-decorating!" (Yes, I remember when we moved in - it took a few changes before the place began to feel like home. But given your comments on the layout and neighbourhood, my sense is you see real potential here . . .)

The point here is not to sidestep buyers’ genuine concerns, but to calmly remind them of the pluses that induced them to make an offer in the first place, and to defend your position that your asking-price or counter represents good value in the current market. Your ultimate job is to help buyers win, within the constraints of your own needs.

Plan Of Attack

How do the negotiations actually proceed? Some step-by-step suggestions for face-to-face negotiating, from (ex-realtor) John Kirby’s excellent book For Sale By Owner (Toronto, Uphill Publishing, 1997):

• read the entire offer without comment: don’t react to unfavorable details until you see the whole picture;
   
• ask questions about your buyers’ reasons for conditions, deadlines, etc., as a way of demonstrating respect, and of finding trading cards - issues on which you can let them win in return for their cooperation;
   
• still without responding, excuse yourself to consider the offer’s pros and cons: give yourself a breather, go over your bottom line, make sure that you and your spouse are of one mind;
   
• when you do respond, avoid rigid positions and ultimatums: if you counter, do so in a way that invites further discourse;
   
• try to build momentum: if you get stuck on a point, set it aside for a bit and tackle some of the easier issues. By dealing with them successfully, both parties show committment and build trust, and the more items you and your buyers resolve, the greater your investment in seeing things through to a successful conclusion.
   
• be prepared to walk: if, despite your best efforts, there’s no chance of meeting your absolute bottom line, wrap things up, while still leaving the door open if the prospects change their minds.

Summary

Respect your own needs and reason for selling, be prepared to demonstrate objectively that your bargaining position represents real value, gently remind your buyers of your property’s particular attractions for them and always leave the door open. Don’t give up if your buyers have demonstrated genuine desire, but be prepared to walk away if they haven’t.

SEASON’S GREETINGS!

This past year, the third in business for PrivateList, has demonstrated more than ever the potential of internet exposure for private sellers: on average since launching the service, we've had another client sell successfully every nine days.

In the coming year, we'll be instituting a number of improvements to the web-site, and exploring ways to cooperate with similar services across the country in building a formal alternative to the realtors’ MLS.

Our next newsletter will go out January 1, 2001, so let me extend now my best wishes to one and all for a happy holiday season and New Year.

FRIENDLY REMINDERS . . .

Are the thousands of dollars you'll save by selling privately worth, say, an hour each week-end, spent reviewing your progress to date and mapping out your continuing campaign?

It's important to maintain an active marketing focus until your property is sold. Therefore, each e-mail version of this newsletter ends with a series of reminders, tips and tools that lead to a sale!

To access these resources, press here.

©2000 PrivateList