How To Negotiate With Cash Home Buyers
Buying or selling a house is probably among the biggest financial transactions you will ever make. While taking this on, homeowners should have certain skills to ensure that they walk away with the largest amount possible. Fortunately, the current real estate market leans towards the seller.
Property owners can sell their properties in many ways, including accepting cash offers from cash buying companies, such as Mill City Homebuyers. Sellers can also opt for financed buyers, who rely on mortgage loans to purchase the property. However, unlike cash buyers, there are minimal negotiations with financed buyers since the price is based on inspection and approval reports. The following negotiation strategies can help cash sellers get a better deal.
1. Counter The List Price
As the property seller, you shouldn’t immediately accept the initial buyers’ bid on your property, especially if the quote is way below your asking price. Homebuyers expect to negotiate with property owners. They will often offer a low initial quote, which may be lower than what they are willing to pay for the property.
As the seller, you should table your counteroffer. It should be a price tag higher than their quote, but slightly lower than your listed price. Most cash buyers are flexible and willing to negotiate, especially if they like your house. You can as well stick to your listed price, assuming you priced the property fairly from the start.
2. Try Creating A Bidding War
After listing your home for sale, make it available for many potential buyers. Schedule an open house for buyers to inspect the property. While the open house event won’t guarantee the sale, you will get several offers. Potential buyers will start competing, forcing them to set better offers. Evaluate all the offers and start negotiating with buyers with the highest bids.
3. Place A Deadline On Your Counteroffer
Cash buyers are better than financed or mortgaged purchases because they eliminate a lot of steps and buyers close the sale faster. However, negotiations and counteroffers can delay the sales process. If you have multiple offers, you should engage in multiple negotiations simultaneously to find the best offer.
Note that it is unethical to disclose to prospective buyers that you are negotiating with other parties. While disclosing can lead to better offers, it can also put off the potential buyer. Nonetheless, you should place an expiration date or deadline on the negotiations to close the sale faster. Doing this will compel the buyer to make their decision. You will either get under a contract or start negotiating other offers.
4. Agree To Cover The Closing Costs
Some buyers request property sellers to pay for the closing costs, which amounts to approximately 3% of the total price. This is because buyers are often cash-strapped from down payments, budgeting for renovation costs, and moving expenses. Some buyers also incur closing costs on the property they sold before buying yours.
If the potential buyer requests that you foot the closing costs, show willingness but increase the property price. Paying the closing costs out of pocket will reduce your final property price. You should set a higher price than the list price to ensure that you remain with the quoted amount.
Cash offers are becoming common in the current real estate market. However, you can only take charge of negotiations if your property is superior. Your home should be well-staged, in excellent condition, and have features that competing properties don’t have. If your house doesn’t excite buyers, these tactics won’t work.