Leverage is key when negotiating a real estate deal.
Fast Value: “You aren’t the highest price, but you have the best terms.” We hear this all the time when we are competing against multiple offers with our buyers. Whoever is in the driver’s seat in a negotiation is going to get the better deal.
How do you get leverage for negotiations?
Great question.
It’s all in the preparation. What you do before you get to the negotiation table is going to determine how much leverage you have.
This is why we spend so much time educating our clients and advising them way before they ever buy or sell.
For example…
When putting a home on the market, we don’t just put a sign in the yard, take some iPhone pics, and put it on the MLS.
We put a strategy together of how we’re going to build leverage. Sometimes, that means doing some work to the home; other times it doesn’t. Leverage can come in many different forms.
But when you’re negotiating without leverage, you’re going to lose more than you win.
Here are a few tips for both buyers and sellers…
Sellers:
You have two major points of leverage when listing your home for sale.
1) Presentation (how your home looks)
2) Price (compared to the market)
These two work together or against each other.
Here is a recent example from a home we recently sold. We could have done major renovations to the home and sold the home at a marginally higher price. But what we chose to do was to spend the bare minimum to maximize our client’s profits.
The other suggestion we gave to our sellers was to do little to no work to the home and price it slightly lower. Their net proceeds would have been lower, but not by much.
They chose to go with the option to do some work to the home to maximize what they walked away with.
The day before we listed the home, we felt confident that we could get $50k higher than we thought. So we raised the price and sold it at the premium.
This is how you use both of your leverage points to make you way more money.
Buyers:
You want to be the best buyer writing an offer on the house.
What does it take to be the best buyer? It means you need to make your deal more certain for the seller.
The more certain a seller is that you’re going to close the deal at what you offered, the stronger your offer becomes.
This is what makes cash buyers powerful.
The cash itself isn’t power, its the certainty that comes with it.
But with the right preparation, you can create almost as much certainty as a buyer with 3% down. How? By partnering with the right agent and lender.
We do this all the time for our clients.
This is why we win so many multiple offer situations without being the highest price.
So… for a summary…. Start early. Like now.
If you want to learn how we can save you money…
Go to OnyxHomes.com/buy if you’re thinking of buying
or
Go to OnyxHomes.com/sell if you’re thinking of selling (or doing both)
Get prepared now so you have more leverage when it really counts.