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Casey Taylor

How to Negotiate the Best Possible Outcome on Your Home Sale

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When your home is for sale, getting an offer from a possible buyer brings a surge of relief and excitement. However, this pivotal step is just the beginning of the long road to closing the sale. After the initial offer, you and the buyer begin the process of negotiating a mutually agreeable sale price and other conditions.

As a seller, the pressures of the sales process and an upcoming move may cause you to make mistakes in negotiations that could prevent you from getting the highest possible price for your home. Here are some strategies to keep in mind as you review offers from buyers:

  1. Consider your strategy as early as possible in the selling process. What is the lowest price you would be willing to accept? Do you have any time constraints? What items do you feel are non-negotiable? Although these may change if your home is on the market for a long time, having a clear idea of your minimum acceptable terms will help you decide which offers are worth accepting or countering.
  2. Trust your realtor. Even if you are a skilled negotiator in your professional life, it is best to leave negotiating with the buyer to your realtor. He or she represents your interests and has the knowledge and experience needed to help you achieve the best possible outcome.
  3. Learn about current market conditions—as well as the buyer’s circumstances, if possible—in order to better understand your relative bargaining power. For example, if there are not many similar homes available for sale in your area, and you know that a prospective buyer wants to get settled into a new home as soon as possible, you can probably assume that you will not have to make many concessions. On the other hand, if there are several comparable homes for sale and you are under pressure to move quickly, you may need to give in to more of the buyer’s demands.
  4. Knowing that the buyer will likely use information that you are urgent to sell your home against you in the negotiation process, try to stay as private as possible about the circumstances surrounding your move. If you have a tight deadline, are struggling financially, or are coping with other difficult circumstances like a divorce, withholding this information from prospective buyers and their realtors will help you maintain the upper hand as you strive to reach acceptable sale terms.
  5. Consider bargaining chips other than price. While both buyers and sellers tend to focus on finding an optimal sale price, there are several other factors that can be used for leverage in negotiations. For instance, you might agree to make repairs, leave behind furniture or appliances, or pay the buyer’s closing costs.
  6. Act swiftly when responding to offers. Even if you are disappointed by an offer, remember that a lowball price may just be part of a buyer’s strategy. Depending on buyers’ moving timelines and how much they like your home compared to others they have seen, they may be willing and able to agree to a much higher purchase price. However, the longer you wait to make a counteroffer, the more likely the buyer is to lose interest or find another home.

Phoenix projected as number one US housing market for 2017

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Phoenix is projected as the top housing market in the country for next year, according to a new forecast report by Realtor.com.

The real estate group expects Phoenix housing to see price gains of 5.9 percent and sales growth of 7.2 percent. That earns the Valley the top spot.

Los Angeles ranks second, Boston third. Sacramento and Riverside round out the top five. Tucson is picked as the ninth strongest housing market next year, by Realtor.com’s forecasters.

The housing forecast projects slower but moderate growth in 2017 with eyes on a potential interest rate hike.

Realtor.com is an arm of media giant News Corp.

Nationally, the forecast calls for a 3.9 percent gain in home prices. That is slower than the past couple of years.

New home sales are estimated to increase 10 percent and new home starts 3 percent next year.

The real estate forecast expects 2.1 percent economic growth in the U.S. in 2017.

“We don’t expect the outcome of the election to have a direct impact on the health of the housing market or economy as we close out 2016. However, the 40 basis points increase in rates in the days following the election has caused us to increase our interest rate prediction for next year,” said Jonathan Smoke, chief economist for Realtor.com referring in part to Donald Trump’s presidential election.

The real estate group also expects Midwestern cities such as Madison, Wisconsin; Columbus, Ohio; Omaha, Nebraska; Des Moines, Iowa; and Minneapolis to be attractive to younger home buyers.

Those markets have affordable prices — compared to larger, mostly coastal cities — and are often college towns or have positive job markets.

Realtor.com projects Chicago with the weakest housing market in 2017 among the 100 top U.S. metros.

Mike Sunnucks writes about residential and commercial real estate, government, law, sports business and workplace issues.

Questions Often Asked About Real Estate

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  • Is now a good time to Buy or Sell?
  • What is the housing market like in my area?
  • What do I need to do to sell my house?
  • What is my home worth?
  • Does choosing the right realtor make a difference?

The real estate market is constantly changing. I can provide the information you need to make a smart real estate decision. If you are buying or selling, I can give you expert guidance.

 

Phoenix Housing Posts Huge Increases

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Phoenix,  amoung a few other cities, hit one of the highest year-over-year price increases. According to a Case-Shiller report recently released, Phoenix hit 23% for the past year with San Francisco, Las Vegas and Atlanta not too far behind. This is largely due to the mix of low mortgage interest rates and investor buying.

With the lack of distressed properties (short sales and foreclosures) bringing prices down, many sellers now have an equity position due to the price increases over the past 12-24 months.  This has led to sellers being able to sell their current residence and purchase a move up home that is generally bigger or in a more desirable area.  Many first-time buyers have also entered the market.  First-time buyers typically represent 30-40% of the buyers pool at any given time. 

This year’s housing growth rate represents the largest growth rate since 2006.  Another variable that often goes unnoticed is the number of homes that have been remodeled.  Many homeowners, as well as investors, have significantly improved homes over the past couple of years. This trend has helped fuel home sales and increase overall value to the homes and communities.  Owners that renovated their homes in the past are now seeing large gains and significant return on their investments.  Many homeowners also took advantage of low mortgage rates and refinanced, saving them hundreds of dollars per month and aiding in renovation budgets for kitchens and baths or other value added items such as pools and better landscaping.

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Phoenix Housing Market on the rise

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Phoenix housing prices have seen a substantial increase in the past 12 months with as much as 20-40% growth rates in certain parts of the city.  With limited inventory available for many new home buyers, many builders have seen an increase in sales.  As investors flocked to the Valley over the past 2 year, with housing prices at historic lows, many of the distressed properties for sale have been either scooped up as rentals or resold as “Fix and Flips”.  Investors often times going in and doing a nice re-model of the home in order to improve the property and sell to an end user.

The Phoenix housing market has a number of factors influencing home sales:

  • Price Increases
  • Consumer Demand
  • Historically Low Mortgage Rates
  • The overall improvement in the economy and job growth

First-time home buyers feel the pressure.

Many first time home buyers and buyers with a price-point under $200,000 are often getting outbid to “Cash” investors.  Many offers that are made by these cash investors are often made sight unseen.  That is because the market has been climbing so quickly that investors could buy a home, hold it and renovate it for a month or two and re-sell the house for a nice profit.  This often leaves owner occupant buyer’s left in the dust, and wondering why they didn’t get the home.  This has lead to buyer’s making “above list price” offers and hoping that they have a chance to get the home.

This activity has fueled the market in a challenging way.  Primarily it causes bidding wars that often leads to people feeling like they are paying too much for a home or even discouraged to the point that they don’t want to bother trying to purchase a home all together.  Another big challenge lends to the circumstances of an appraisal for anyone buying and obtaining mortgage financing.  Often appraisers are now forced to try and justify the higher price on accepted contracts, even though many similar comparable homes that have recently sold, have sold for less.

Opportunity still exists

Despite the rampant price increases, buyers should not be discouraged.  Many investors are realizing that the market can no longer support the quick gains as seen in the past 12-24 months and many are no longer buying.  That will leave plenty of opportunity for first-time buyers and move up buyers to find nice homes that they can purchase and enjoy.  After all- buying a home and getting a 30 year rate in the range of 3.25-3.75% will not be around forever!

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