The Secret to Negotiations for FSBO Sellers

When it comes to buying or selling a home, the idea of having to negotiate can be intimidating. Most of us aren’t aware we have negotiating skills even though we skillfully negotiate daily. (Who walks the dog, takes the children to school, goes out to pick up lunch, prepares the report, etc., etc.?) Let’s debunk some myths about negotiating, shall we?

This Is Not Negotiable

Sellers often say to themselves, “This is the deal I’m willing to make. It’s not negotiable.” That’s not necessarily because there is no room to negotiate. It is the simple result of anxiety about negotiating.

Take this approach and you may be chasing away otherwise good potential buyers. The buyer gets into a huff about the seller’s inflexibility and everything goes down hill from there. This need not happen. Sellers should be willing to enter into reasonable negotiations and just remember that they can say “no” at any point along the way toward working out a deal. However, they need to ask themselves when each subject comes up, “Am I willing to lose this deal over this point?”

The buyer needs to have a similar mindset. When seller and buyer are thinking along the lines outlined above, and each acknowledges the possibility of working out a deal in which both buyer and seller come away feeling like winners, the stage is set for successful negotiations. It is fortunate that most folks do think along these lines.

It’s also helpful that buyers and sellers are not always focused on the same things to the same degree. Price might be more important to one, and the time of the sale’s completion more important to the other. Sometimes negotiations are just a matter of balancing things out.

Typical Pattern

Successful negotiations don’t usually drag on for a long period of time. There’s usually an offer, and a counter-offer which is accepted. Many times the first offer is actually accepted if it is the result of a conversation between buyer and seller where subtle negotiations took place. At most, successful negotiations are usually concluded with an offer, a counter offer, and a counter-counter offer. It’s usually a sign that the deal is not going to work out if negotiations continue much beyond that.

There are exceptions to everything, of course, and the minuet of negotiations can go on for quite some time where two people who love to negotiate are involved. However, even in those cases, most of it tends to be verbal with the written sales contract changed very few times.

The biggest point of this article is don’t get intimidated. If you stay objective, you will be able to get what you need from your home.

FSBO Open Houses – What If You Get An Offer?

You’ve decided to sell your home yourself and decide to have an open house to show off the property. Potential buyers come and you get an offer. What now?

Qualifying Buyers

Your home is looking sharp and you’ve got the word out telling people about the open house. Now you need to be prepared to take action if a qualified buyer attends, likes your home and wants to buy it.

Most qualified buyers will have a strong lender letter. If one of them wants to buy, you can move on to the next step. There may be people who come to your open house who would like to buy but don’t yet have a lender letter. Let me suggest a mutually helpful alliance for dealing with that situation.

Call several lenders before you schedule your open house. Tell them you’re planning an open house and you’d like to have a lender on hand to help buyers (even if they don’t want to buy your home) figure out what they can afford. Tell them you’d also like them to help you evaluate any lender letter you’re offered by a potential buyer. Choose the lender you feel most comfortable with and work out a mutually acceptable date for your open house.

You can introduce all attendees at your open house to the lender. This often proves to be helpful to you, some of the buyers who attend and can be a source of additional loans for the lender. Everybody wins.

Be Prepared for Action

You need to know how you want to handle a contract should someone want to make an offer. Do you have an attorney who will draw it? Are you going to suggest using a contract form? If so, have one on hand. Do you have a specific settlement company you’d like to use? Do your homework and think these things through in advance. Buyers may have ideas and connections of their own. You should consider any reasonable suggestion a potential buyer makes, but be prepared with your own approach if the buyer isn’t sure how to proceed. The point is to plan your course of action in advance.

In Closing

FSBO sellers often worry whether anyone will attend their open houses. They are then happily surprised when people arrive. Such happiness can turn to embarrassment when an offer is made and the FSBO seller isn’t sure how to handle it. If you think positively and prepare, this need not happen to you.