Being a great real estate agent isn’t just about sourcing homes/buyers and closing the deal for your clients. It’s also about getting the best possible deal that your clients will be happy with. If you represent sellers, this means pitching the value of the home and negotiating to avoid any additional expenses like paying for extra renovations. If you represent the buyers, getting the best deal can mean anything from haggling the asking price to getting extras thrown in like the patio furniture.
Whatever your client wants is what you should try to negotiate for, but home buyers and sellers don’t always realize just how much they can ask for, or how much better their sale might be with creative negotiation. As the representing agent, it’s your job to be on the ball and offer your client the opportunity to negotiate for additional points beyond the listing price of the house.
Today, we’re diving into five negotiation points that your clients might appreciate you fighting for that are more personalized, useful, and schedule-conscious than simple price haggling.
1) Closing Costs: Ask the Other Party to Cover All or a Greater Percentage
The closing costs include the cost of the lawyers, the title check, and the title transfer along with paying the agents for their assistance. Traditionally, closing costs are split based on tradition and policy based on your state and the individual real estate market. But the exact lines of the split are often negotiable. A desperate seller or a motivated buyer might be willing to take on more than their traditional share for other advantages in the negotiation.
Seller Covers Costs to Close Deal
The seller may agree to cover the entirety of closing costs in order to help the buyer take the house off their hands. It is often seen as a fairly small incentive compared to larger ticket negotiation items.
Buyer Covers Costs to Compete with Bid
Buyers who are competing with other buyers or dealing with a tentative seller may offer to cover the total closing costs to help motivate the seller toward accepting their bid and closing the sale.
2) Final Repairs
Many homes are polished but not actually perfect when they go on the market. The roof, the foundation, or the driveway may need work, or the inspector may have found a mold infestation in an otherwise perfect house. There are a few different ways for agents to leverage this into negotiation points, but the responsibility is usually on the seller to make it right.
Seller Completes Repairs Before the Deal is Struck
The seller may agree to complete the repairs before the deal is closed so that the costs do not fall onto the buyer.
Seller Credits Buyer the Cost of Repairs
Alternately, the seller may credit the buyers with the predicted cost of needed repairs, keeping the listing price where it is while finding another route to help the buyers afford the repairs that need to occur.
3) Closing Date Control: Rush the Closing or Let it Linger
The date of closing is a financially significant day for both buyers and sellers. Buyers and sellers could both be in a hurry or, due to real estate cycling practices, they may need to time the closing just right with the sale or purchase of another home in sequence.
Seller Grants Fast Closing to Buyers in a Hurry
If buyers have a lease ending and want to move in right away, sellers may grant a faster closing date in exchange for other negotiation points they desire.
Buyers Grant Slow Closing to Sellers with Final Tasks
Sellers who have final tasks or moving out to take care of may ask for a closing date further out to get the home fully move-in ready.
Buyer or Seller Grants Timed Closing to Meet a Financial Schedule
Buyers or sellers may have a precise closing schedule they need. Buyers may need to sell their previous home before they have the funds to close while sellers may need to line up their next home before they are comfortable fully moving out.
4) Homeowner’s Warranty: Insurance on Essentials in the First Year
A homeowner’s warranty is a special type of insurance that covers the essentials of a home like the roof, water heater, AC, wiring, and so on. These are things the seller is usually assumed to be responsible for the quality and performance of at the time of the sale. Sellers will sometimes offer or grant the purchase of a year-long Homeowner’s Warranty policy on behalf of the buyers.
Seller Buys the Policy and Premiums until Closing, Buyer Pays Deductibles with any Claim
One way Homeowner’s Warranties are handled is that the seller purchases the one-year policy and pays the whole year’s premiums as part of their negotiating give. But if the buyers make a claim within that year, the buyers pay any deductibles and handle the claim themselves.
Seller Buys the Policy, Buyer Pays Additional Premiums
A more even option in negotiations is for the seller to buy the policy and pay for premiums up to the sale, then the buyer takes care of premiums and deductible once they take over ownership of the home.
5) Throwing In the Furniture and Household Supplies
If the home has not been completely emptied, there may be a few removable features that the buyer would like to keep. This often includes things like patio furniture or the seller’s stockpile of maintenance supplies, including air filters or pool shed supplies.
Buyers Ask for Furniture or Supplies as a Bonus
Buyers who like the patio furniture or see the value in having all the supplies they need for a home feature in one place may ask to keep these things as a minor negotiation point, or a major one if there are left-behind appliances like chest freezers and workshop tools.
Sellers Offer to Leave Extra Items Behind
Sellers who don’t really want to move their old patio furniture, supplies, and appliances may offer to throw these things in as an incentive for buyers who are interested in the home.