Once you make the decision to sell your home privately, you should look at finding a real estate lawyer before you get too far into the sale process. Let the lawyer know of your intentions to sell privately and give him any detai ls that you might find relevant to the sale.
The following is a list of considerations when approaching the negotiation process:
- Select a Real Estate Lawyer – It’s important to secure the services of a real estate lawyer to represent your interests in the transaction. Ask your lawyer to go over the main clauses of a purchase and sale agreement so that you understand what will be involved in the negotiations. Remember, you would need to secure the services of a lawyer even if you were selling your home through an agent, so this should not be considered an extra expense. Some common questions have to do with timelines, deposits, conditions, adjustments, closing dates, etc. We strongly suggest you consult your lawyer on any legal questions you may have. Consider our excellent Retained Legal Service for unlimited access to an expert lawyer with any questions you may have.
- Know Your Rock Bottom Price – When you begin the process of selling privately, you will establish a price that you will ask for your home. Depending on factors such as the local housing market, time of year, urgency to sell, or other variables, some people will leave a little negotiation room when they set the price, but this isn’t necessary. The key is to be clear on the price you would ultimately accept for your home. If you do negotiate to cover certain costs as part of the sale, (such as upgrade allowances, costs of inspections, etc.), make sure you factor these into your bottom line price. Never divulge your lowest price during negotiations.
- Not Everyone Will Make an Offer – Just because a buyer visits your home doesn’t automatically mean they will present you with an offer. Since the home showing is typically a prospective buyer’s first look at your property, they may realize after walking through that your home really isn’ t for them. Don’t be discouraged by this. Think back to when you were shopping for your home; chances are you visited a number of homes before making your decision. Often, buyers will leave a home without providing any indication of interest but follow-up later to ask further questions.
- Don’t Be Surprised by Any Offer – Remember that buyers are trying to look out for their own interests in the negotiation process. Sometimes buyers will make a low-ball offer to see if the seller can be panicked into making a deal. As the seller, you can determine whether you want to submit a counter-offer. You may decide not to counter at all if you think that the buyer is not serious enough to continue negotiations.
- Ask About Mortgage Pre-Approval – Once you get buyers seriously interested in your property, make sure you ask them about their ability to pay for a home in your price range. You will want to make sure they have been pre-approved for a mortgage and that they have access to enough money to cover the purchase of your home. If they haven’t yet been pre-approved, suggest to them that pre-approval should be their first step before they get too far along in negotiations.
- Don’t Take Things Personally – Some buyers may try to characterize your home, or your view of your home, in not so flattering ways. By pointing out weaknesses, they are trying to strengthen their bargaining position. Don’ t let these types of tactics affect you. If you have done your proper research, searched for home comparisons or used an industry expert when setting your price, you can be confident in the price you set and recognize the tactic for what it is. Again, you can choose whether you want to continue negotiations or not.
- Exchange Lawyer Information – When the foundations of a deal have been reached, exchange the names, addresses, emails and phone numbers of the lawyers involved (i.e. your lawyer and the buyer’s lawyer). Get the buyer to have his or her lawyer draft up the details of the purchase and sale agreement and have them sent to your lawyer’s office. Putting this responsibility onto the buyer will help gauge the seriousness of the offer. Your lawyer will contact you to review the agreement. If there are any questions at this point, your lawyer can amend the agreement and send it to the buyer’s lawyer for review. This process will continue until all the details are correctly accounted for within the agreement.
- Include Dates – When making offers and counter-offers, it’s always a good idea to include timelines and dates for activities to occur. For example, the offer can be good for a certain number of days or a home inspection condition must be performed within a certain number of days from the date an agreement is signed. Mark each offer/counter-offer with date and time to prevent confusion as to which one is the most current. Including dates helps keep the process on track and sets deadlines for events to occur. Speak to your lawyer about reasonable time frames for conditions and all other activities that form part of the agreement.