How To Negotiate A Higher House Price When Selling

How To Negotiate A Higher Price On A Property When Selling
When you sell a property, you naturally want to try and get the maximum value for it. For that reason, it helps if you know a few things about how to negotiate a higher house price when selling.

We know that negotiating on price can be a stressful and even awkward time. We’ve been in the negotiation position a few times ourselves and it takes a cool head and some confidence to come out on top.

So, drawing on our own experience, we bring you some of our top tips so you can look to secure the highest possible sale price for your home.

Know How Much Your House Is Worth

When you put your house on the market, you should ideally have had at least three different estate agents visit and provide you with a valuation.

A good estate agent will know the local area and the recent sale prices of comparable properties in the area.

Therefore, if all three agents come up with a similar figure, that’s probably not too far from a realistic sale price.

One thing we found is that you have to be careful of estate agents that value your property higher to get the job. We had some of these over the years and they always seem very sure they could get this price for us.

It might sound appealing, but if you put your home up for an unrealistic price you it will take much longer to find a buyer and you might end up having to reduce it.

The longer your property is on the market the more likely it becomes that you get a lower offer than you would like.

If your home has been on the market a long time, or you are not sure your estate agent has valued your property correctly, you can always bring in a chartered surveyor to give you a valuation via a HomeBuyer Report. You’ll have to pay for this but you can use our tool to compare chartered surveyors in your area.

Once you are happy you’ve had a realistic valuation of your property, you’ll know when you receive an offer if it is fair, or if you should push for a higher price.

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Notify Potential Buyers Of Any Other Interest

If someone puts an offer in for your house and you still have other viewings lined up, don’t be afraid to mention this to the potential buyers. This can often encourage them to make a higher offer there and then, as they don’t want to run the risk the other interested party will outbid them.

If the buyer does not increase their offer, or you’re still not ready to accept it, let them know you are considering their offer but would like to let other viewings go ahead first. Then, make sure you notify other parties that you’ve had an offer.

Letting potential buyers know of other interested parties and offers is not only fair to them, it also increases the urgency and can lead to much higher offers. It can even start a bidding war!

A 2009 study by Herpen et al., digs deeper into this phenomena called, “the bandwagon effect”. Buyers prefer a popular product that is in high demand and scarcely available.

Notifying potential buyers of other interest also lets you borrow a trick from the sales closing playbook. Known as the “social validation principle”, you can urge unsure buyers to make a decision on the spot.

Cialdini and Goldstein (2002) discuss that individuals are more likely buy once they see others making a similar purchasing decision. It’s why you see companies always highlight why they are the leading and most-trusted brand.

We were in this situation several times, where we got an offer but still had viewings booked in. It’s amazing how often people would up their offer, when they were told that we wanted have the viewings and make a decision afterwards.

But of course, the fear of missing out (or fomo, as it’s often called) is very strong, so this little tactic is very effective. We never got to a point were we actually had to have the other viewings, which just shows how well this works.

Invite Sealed Bids

Invites Sealed Bids On House Price

If you’re lucky enough to have lots of interest in your property and multiple offers, you can ask your estate agent to invite sealed bids from all interested parties.

This basically means that all potential buyers put in one single offer, and then you, as the seller, get to choose which one to accept (if any – you’re not obliged to accept any of the offers!).

As the buyers can only put in one often, they’ll usually put in the highest amount they are willing to pay, which can sometimes be even higher than the asking price.

Be aware though that sealed bids will only work if you have at least 2-3 serious buyers. There is also a higher risk of ‘buyers remorse’, where the buyer puts in a higher offer than they are comfortable with and become more likely to pull out of the purchase further down the line.

Therefore, sealed bids are not without risks for the seller.

On the sale of our first home we were lucky to get lots of interest in the very first weekend. By the Monday morning we had 3 offers from firm buyers.

Going to sealed bids was one option for us, however, since two of the offers were already at the asking price, we were reluctant to start sealed bids. As one of the buyers was a chain-free, cash buyer (which was very desirable for us), we decided to accept their offer.

Sometimes getting more money isn’t the be all and end all, you have to look at the bigger picture.

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Take The House Off The Market

If you’ve had an offer which is very close to your ideal selling price, but not quite there, you can try and get the price up a little more by declaring the price at which you’ll take the house of the market.

Buyers want houses taken off the market once their offer has been accepted because it significantly reduces the chances of them being ‘gazumped‘ (being outbid by another party after your offer has already been accepted). Therefore, this can be a great way to bump up the offer price that little bit more.

Of course, once you have accepted an offer on the agreement that you’ll remove it from sale, make sure you stick to the agreement or you may lose your buyer altogether.

We’ve employed this tactic several times. In fact, every time we had had an offer below the asking price we have used the house coming off the market as a negotiation point.

For example, we were offered £5k lower than the asking price on one property. While we didn’t feel we could push the buyer up the full £5k we did go back and say that we could accept their offer, but if they wanted it taking off the market, they’d have to increase it by another £2k.

Most buyers, if they’ve fallen in love for a property and can afford to increase their offer, won’t risk losing their dream home for the sake of a couple of grand.

Become Chain-Free

One thing everyone hates is being stuck in a chain. Even if you’re ready to move, if part of the chain isn’t, then you’re going nowhere.

That is unless someone decides to take themselves out of a chain, either by buying their next property without first selling or by moving into rented accommodation after the sale is complete.

If you’re in a position where you can remove yourself from a chain, or were never in a chain to begin with, make sure the buyer is aware as this can help push up the offer price.

We haven’t yet been in this enviable position but the sellers of both our first house, and the house we own now were able to use this tactic against us.

In the first house, the seller had moved in with their partner and so the house was empty. They were able to push our offer up a little because they were chain-free (though we still got a very good price as we timed it well and were first-time buyers).

In our most recent purchase, the sellers had been able to buy their next property without having to sell first. In fact, they completed and moved into their new home a few weeks before we completed on purchasing our property.

Again, this put them in a stronger selling position and we were willing to pay a little more to secure the property, knowing that their position meant it was unlikely we would be gazumped.

Throw In Extras

Our large sofa we used to negotiate
The large sofa we used as a bargaining chip when selling our home!

Did the buyer fall in love with your sofa or that antique cupboard in the corner? If so, it may be worth offering to throw such items in with the sale to encourage a higher offer.

White goods can also be a persuasive factor, especially for first-time buyers who need to kit out a new house. It also gives you one less thing to worry about on moving day and gives you a chance to renew or upgrade your furniture in the process.

In the book Predictably Irrational by Dan Ariely, individuals are more likely to change their behaviour when there is something free. Another Cialdini article titled, The Power of Persusasion, highlights the fact that humans are always wired to do something in return once they receive a gift or freebie.

You can hijack this so called ‘law of reciprocation’ to your favour! In fact, it’s one of the most powerful psychology tricks in sales.

We have used this trick several times. The last time, we offered our buyer the huge sofa we had in our living room. Because the living room itself was really big, you need a big sofa, but this can be costly, as we know.

So when his offer was slightly lower than we hoped, went back with a counter offer that was higher, but we included the sofa as well as the dishwasher. And he accepted.

Not only did it mean we got the price we wanted, but we didn’t have to worry about getting rid of the sofa. It would have been far too big for our new living room and selling it would have been a hassle we didn’t need.

If anyone would ask me how to negotiate a higher house price, this would be my first tip, because it is easy and simple and can even save you some hassle.

We would highly recommend that you single out items that you can throw in to increase the offer beforehand, so that you are prepared.

Get Any Repairs Done

Ideally, if your property needs any maintenance work, you’ll get this done before putting it up for sale. This alone can help attract more buyers and gain higher offers.

However, if you didn’t repair everything, or just missed something, and your prospective buyer is trying to reduce their offer as a result, it may be worth offering to get the repair done yourself. This could be done instead of accepting a lower offer.

Just make sure that it’s cost-effective to do the work rather than accept the lower offer! 

So there you have it, a few good tips on how to negotiate a higher house price when selling. Don’t forget that there are also a number of ways to get higher offers for your house before it’s listed on the market.

We’ve also listed 101 ways to sell your property faster, and many of these will also increase your likely sales price too!

If you are also buying a property, or just want to understand the techniques buyers will use to get the best deal, don’t forget to read our guide on how to negotiate a lower price on a property.

Author

  • Paul James

    Paul James, is a marketing expert with a passion for property. As well as being a property investor, Paul has also worked within the marketing departments of some of the UK’s leading estate agents. Paul is the founder of Property Road.

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