With the average sales price dropping across the city, and the number of listings rising, now is not a great time to be a seller in NYC. Dealing with difficult and demanding home buyers is, unfortunately, a common part of selling a home. In slow markets like now, they can be especially prevalent. There’s the bargain hunter who thinks he can get everything with a lowball offer, the time waster who refuses to put an offer on paper, and the unrealistic dreamer who sets impossible deadlines. Such people are challenging but not impossible to work with. It just requires a cool head and a well thought out approach.
Here’s how to deal with difficult buyers when selling your home during a buyer’s market.
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What to expect when selling your home
People tend to attach a lot of emotional value to a home, and if you’ve lived in yours for many years, then you should expect it to make you a little biased. Such can cause problems when you run into difficult buyers. The first step should be to try and emotionally detach yourself from the property. Start by finding the home’s current market value through the use of comparative market analysis (CMA). The CMA determines the right asking price for your home based on sales of comparable properties in your area. Next, depersonalize your home by removing most of your personal effects such as family portraits. Making it more appealing to potential buyers. Next, you’ll want to stage the home, so it looks like it’s best for the open houses and private showings ahead.
As you meet different buyers and start negotiating towards a contract, keep in mind these negotiating tactics.
Say “No” and wait
If a buyer is playing hardball and refusing to budge on a concession or price point that is important to you then be prepared to say no. If you’re not getting a lot of offers, this can be difficult but is probably better in the long run. Say no and give your reasons for it. The buyer will see that they’ve hit a brick wall and may come back with a more reasonable offer if they’re interested in the home.
Make a counteroffer
Saying no to a buyer’s demands might work when there are multiple offers but what if you’ve only got one interested buyer? If a buyer’s first offer is too low, then be ready to meet them halfway with a counteroffer. For this to work in your favor, it is good practice to have some cushion space built into your original offer. This will allow you to scale back the price without going too far. From the buyer’s point, this looks good as it shows you’re willing to compromise and play fair in negotiations.
Take preventive measures
If a buyer doesn’t accept your counteroffer, then look for ways to mitigate your losses. Concessions and contingencies can be just as significant as the price point so try to reduce them. If the buyer agrees to drop certain contingencies, then make sure you get it in writing.
Let your agent do all the talking
If things get very heated, then turn things over to your agent. They want to make a sale just as severely as you do, but because they don’t come with any emotional attachment to the home, they’ll be far better than you at keeping a level head. Your listing agent has also likely dealt with a demanding home buyer before.
5 Different Home Buyer Character Types
In a perfect world, every potential buyer who passes through your doors would be deadly serious about their offer and put no obstacles down in the selling process. But like almost every aspect of life, you’ll encounter a host of different homebuyer characters in real estate. Even if it does take a while before you finally meet them face-to-face, it’s good to have an idea early on of what sort of buyer they are. Know your buyer and you’ll how best to deal with them. Here are the five most common you’ll encounter when selling your home.
The all-cash showoff
At first, an all-cash buyer can seem like a gift sent from heaven. The financial guarantee of an all-cash buyer certainly makes them a surer thing. Especially when other interested buyers only have a mortgage pre-qualification. But know that this can make them a little arrogant and more demanding with contingencies. They’re also more likely to make a lower offer. If that offer price is too low or their demands become too much be willing to walk away. In the end, you’ll still get the same amount of net proceeds in cash regardless of how the buyer pays as long as the bank funds the loan.
The scrappy underdog
Opposite of the all-cash buyer, the buyer who has little money to put down. Most people with FHA loans fall into this category. This can present a problem for sellers as FHA loans have stricter home qualifications. Along with this, the more help a buyer needs financing the purchase, the more you might be required to give such as contributing to closing costs or potentially face the deal falling apart. Still, don’t allow that to make you overlook these types of buyers. They tend to be far more flexible with a seller’s needs.
The emotionally attached charity case
These are the buyers that fall in love with your home and include tear-inducing love letters with their offer. While these types of buyers can be the most heart-warming know that love won’t pay the bills. The bottom line still matters so unless their offer price and financing also look good, be on your guard against anyone who tries to play to your emotions. You can always negotiate with these types of buyers. Maybe their holding out on some cash and using this as a tactic to get a better deal. Perhaps their feelings are genuine, but the financing isn’t there. Focus on the bottom line and don’t get distracted.
The casual shopper
Every seller encounters this type. These are the people that regularly attend open houses, take up the agent’s time asking a lot of questions and sometimes make low-ball offers that they know will be rejected. They are buyers, but they’re just not committed buyers yet. They probably want to buy one day, but for now, all they can do is look, dream and take up your time. These people can be big-time wasters so the sooner you can identify them the better. Find out if they’re looking at multiple properties and how soon their planning to move. The vaguer their answer, the more careful you should be of placing your faith in them.
These types of buyers are part market-enthusiast, part bargain hunter and part serious buyer. They’ll usually have been looking for the right property for some time and are just looking for a good deal before they pounce. They know what similar properties are going for and they’ll want to know about any potential defects in your home. Just be honest with them. If their serious about doing a deal and aren’t trying to underpay you, then they can be a winning card.