There are a number of legislative changes that come into force from August 1st 2007 which affect the home selling process. Rightmove is currently in the process of comprehensively updating our website information to ensure our content is as accurate as possible. Please come back soon to see our brand new Selling Guide.
Someone is interested. After weeks of keeping your home polished and spotless, and days filled with showing off your place to complete strangers, you have an offer. Now the game begins.
Setting your priorities
People sell their homes for all sorts of reasons. Once you understand your primary reason for selling, then you can use this to drive the negotiations. Below are some possible reasons for moving.
- Money - you are selling to get the highest price possible out of your largest asset.
- Time - you are selling because you have to relocate for a new job, a new love, a new life, etc.
- Change in circumstance - you are moving because your family has outgrown your home. You can't fit anymore. Or the opposite is true - the kids have left the nest and your current home feels empty with all the extra space.
In short, is your move driven by need or desire? If driven by need, you are more likely to entertain lower offers for your home than you are if your move is driven by desire.
Understanding each player's position
Seller's position
Your negotiating power will be affected by the following factors:
- Level of interest in your property - if offers are flooding through, you can play hard to get.
- Current Market Conditions - if it's a "hot" market, where demand exceeds supply, then sellers can expect to command a favourable price for their properties. If it's a slow market, where supply exceeds demand, sellers will not have the same negotiating power.
- Length of Time on the Market - the longer a property stays on the market, the weaker your negotiating position as a seller.
- Condition of the Property - the more repair work that needs to be done on your property, the weaker your position in negotiations.
- Time Pressure - the more time pressure you have, the weaker your position in negotiations.
Buyer's position
The buyer's negotiating power will be affected by the following factors:
- Chain or No Chain - buyers who are not tangled in chains (someone has to buy their property before they can buy yours), are in a superior negotiating position to those who are in chains. Look for buyers who are:
- First Time Buyers
- Between Homes (might be renting now)
- Buying with Cash
- Investing (this won't be their residence).
- Pre-approved or Not - buyers whose mortgages have been pre-approved will be a better position than those who have to wait for the paper-work to be processed. You know buyers with approved mortgages have the money to pay for your home.
- Time Pressure - as with the seller, the more time pressure a buyer has, the weaker his position in negotiations.
Agent's position
The agent works for the seller.
- The agent's commission is directly affected by the sale price of the property, so it worth his while to try to get the highest price possible.
- The agent works in the field everyday, and may be more realistic than the seller about conditions in the market.
- While the agent wants the highest commission possible, he also would rather get something than nothing. So, it is in his interest to put both parties in a win-win situation when possible.
As a seller, it is important for you to understand your particular agent's position before you go into negotiations with a buyer. You might consider having a brief conversation about expectations and motivations of each of you before diving into negotiations.
Not selling?
Few things are as frustrating as not selling your home in a timely fashion. It can stall so many other plans. You have a few choices when this happens:
- Reduce the Price - the most common approach to take. If no one is buying, chances are the price is too high. Talk to your estate agent and check the prices of similar properties in your neighbourhood. What have they been selling for?
- Play the Field - if you are currently only dealing with one estate agency, you might consider instructing more agencies. This will widen your pool of prospects, and may spark a little healthy competition between agencies.
- Take It Off the Market - if you are selling because you want to not because you need to, then this is a viable option. You may want to wait months or years for a slow market to recover.
- Wait It Out - if your property is not sparking much interest at the current price, and the market conditions are not dramatically changing, there is little reason to believe that keeping your home on the market at its current asking price will succeed. The longer a property is on the market, the less desirable it appears to buyers.
Parting advice
- Do your homework. Take time to understand your agent's motivations and negotiating style. Figure out a negotiating strategy with your agent. And don't let your personality get in the way of a negotiation.
- It is easy to get sentimental about your home. But you are selling it, so you have no say in what buyers will do to it after it is sold (unless it is a listed property.) Try to keep your emotions out of negotiations.
- Don't take your home off the market for a buyer who hasn't exchanged on his home yet.
- Don't exchange on a new property until you have exchanged on your current home.