How to Win a House Negotiation: 9 Expert Tactics for Home Sellers

Before you post the “for sale” sign in your front yard, it’s important to prepare yourself for a critical part of the home-selling process: negotiating with buyers. Whether it’s dealing with price negotiations or determining a timeline for closing and moving out of the property, you’ll want to step into the process already knowing your objectives and what to expect from prospective buyers.

The good news is that with a little planning and forethought, you can sit at the closing table with confidence, knowing your best interests are represented.

Here are nine expert house negotiation tactics to help you on your way to a successful sale.

1. Decide what ‘winning’ means to you

According to Chester Ardolino, a real estate agent in Springfield, Massachusetts, the time to think about your top priorities as a seller is before the house hits the market. “It’s important to understand what the seller’s needs are before we begin the process. In order to win for the seller, we need to understand what their goals are.”

Your selling objectives and priorities can vary depending on your circumstances and how they might be influenced by current housing trends.

For example, a trend Ardolino has been seeing recently is sellers looking to enter into a lease-back with the buyer. “Finding buyers who are willing to let the seller remain in the house for a set amount of time while they either search for another home or transfer to another location is becoming a bigger priority for my sellers,” explains Ardolino, who works with over 86% more single-family homes than the average Springfield agent.

Other common seller priorities include:

• A quick sale to accommodate an imminent life change (such as divorce, or moving unexpectedly for a new job)
• Making enough money off the sale to fund the downpayment on a new home
• Selling the property “as is,” or without the needed repairs or renovations
• Getting the highest possible offer for the property (even if it requires some additional work and money to prepare the property for sale)

Once you’ve identified the priorities that are important to you, your real estate agent will help you formulate a negotiation strategy that best meets your needs.

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2. Weigh how much leverage you have

When the competition for housing is hot — as it’s been for the past few years — sellers have a lot more leverage at the negotiating table. “Some of us in the business have been calling this the ‘name your price’ market,” Ardolino says. “You can put whatever price you want on it, and because of the intense competition, you’ll see buyers reaching for houses at even the highest prices.”

But markets change, and sellers need to be prepared. “It always comes down to this: a property will sell for what the market will bear.”

Since 2020, the market has swung far into the seller’s favor, with the high demand for buyers outnumbering the number of sellers. This provides a great deal more leverage for sellers during the negotiation process. When this scenario flips (according to Ardolino, we’re already seeing signs that we could be heading in that direction), buyers will start to have the upper hand.

Here are a few key considerations when determining how much leverage you’ll have in your real estate transaction:

• What are home inventory levels like? Consider both the national as well as the local market. The lower the inventory levels, the more negotiating power you’ll have.
• How high (or low) are interest rates? This is generally a good indication of the number of potential buyers you’ll have at your disposal. As interest rates start increasing, as they are right now in 2022, sellers may not have as many backup offers to consider as they would when rates were low.

3. Price your house right to attract competitive offers

The price you set for your house in and of itself is a negotiation tactic. If you overprice from the start, you risk losing leverage as your home lingers on the market with little (or no) attention.

“I think the most important part of selling a home is your pricing strategy,” Ardolino says. “We spend a lot of time preparing property valuations before we meet with the client to determine what the selling price will be. We use all the tools available to us, from market trends to comparable properties in the community.”

Once Ardolino and his team determine the recommended selling price, he’ll advise his clients to price the property just below that amount to create a competitive bid scenario. “This leads to higher sales prices for our seller clients.”

By pricing the house this way, you also avoid a situation where a price reduction is necessary, which can “taint” the house in the eyes of buyers who may wonder what’s wrong with the property and why it hasn’t sold yet. The last thing you want is for buyers to bring that mentality with them to the negotiation table.

4. Get your house in top-notch condition

You don’t want a prospective buyer coming into your house feeling like it isn’t well taken care of. After all, if the gutters are filthy, lightbulbs are burned out, or paint is chipping, what other (bigger) problems are lurking below the surface?

To prevent this mindset, as well as the low-ball offers that may come with it, invest some time into cleaning, depersonalizing, and making minor repairs to the property before it hits the market. Here are a few key places to start:

• Give your house a thorough scrubbing to remove dirt, grime, and dust
• Declutter and pack away personal items such as decorations and family photos
• Replace broken windows and torn screens
• Fix leaky faucets and toilets (or replace if necessary)
• Patch holes in the walls and give each room a fresh coat of neutral paint
• Remove old or dated wallpaper
• Clean or replace dirty grout
• Repair any HVAC or heating issues

Don’t forget to give the outside of your property some attention, as well. Simple steps such as mowing the grass, removing debris, and keeping the hedges trimmed will go a long way to showing buyers that your property is well cared for.

5. Require a sizable earnest money deposit

An earnest money deposit is a way for buyers to show that they’re committed to following through with the home sale. Buyers make this deposit after they’ve made an offer and you’ve both signed the purchase agreement.

Typically, the earnest money deposit ranges from 1%-3% of the purchase price, but that amount may be higher in a high-demand market. After all, when there are multiple offers on the table, it’s in the seller’s best interest to work with a buyer that they know is committed to following through on the purchase agreement.

As a seller, you don’t have to require an earnest money deposit, but it’s in your best interest to do so. It’s also in your best interest to require a sizable deposit, as it lets buyers know that there’s competition and other offers standing by. This will give you the upper hand when it comes to negotiations, as buyers won’t want the deal to slip away from them.

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6. Double-check repair requests with trusted professionals

Although many buyers purchased properties without a house inspection these last few years, Ardolino believes that the market is starting to shift — and that we might be heading back toward a time where repair requests become more common again. “Right now, we don’t have to search for buyers because they’re coming to us. But this might change really quickly with the interest rates rising and the inventory in our market increasing slightly.”

With that in mind, seller negotiations after the house inspection will become more common again — particularly if it reveals an issue with the function and safety of a home.

If you receive a repair request or a request for a repair credit, make sure you double-check the repairs with a professional. First, you want to make sure that the problem identified actually needs to be fixed. Secondly, you want to get an accurate quote on what it will cost to rectify the issue.

“If an inspector says something should be done, we have a repair guy that’ll come in and say, ‘That really is necessary and this is what I would charge to do it,’” says real estate agent Gladys Blum in Salem, Oregon, who has been selling homes for 45 years. “We always get bids on things that are requested so that the seller can see the dollar amount that they would have to pay to do it.”

And remember: sellers aren’t obligated to make any repairs after the purchase agreement is signed. In fact, the only repairs you should really negotiate on at this point are those that weren’t apparent or disclosed when the buyers saw the property.

7. Make repairs that affect the buyer’s loan requirements

It’s one thing to negotiate on repairs that will impact the buyer’s loan requirements (and could result in their financing falling through) — particularly if you’re eager to close on the property and don’t want to start the process over again with another buyer. But it’s another thing entirely to let the buyer get carried away with nitpicky requests. Because cosmetic flaws don’t affect the home’s function, the buyer’s loan, or the home’s value, they shouldn’t be considered a top negotiation priority.

Here is a list of items that should be a hard “no” during the negotiation phase:

• Minor repairs that cost under $100
• Cosmetic imperfections
• Fixing loose door knobs or handrails
• Repairing a broken outlet or lightswitch
• Fixing unsealed windows
• Landscaping work
• Replacing missing or broken smoke and carbon monoxide detectors
• Repairs to a shed or other outbuilding
• Minor cracks in the basement or driveway

Helpful to this process is working with an experienced real estate agent who understands the loan requirements and can guide sellers on what repairs are necessary to close the deal. “We know what things have to be done and what doesn’t, depending on what lender it is,” says Blum.

8. Negotiate closing costs with your ‘win’ priorities in mind

Buyers often bear the brunt of the closing costs because most of the fees are associated with the process of obtaining a mortgage. Because buyers are also writing big checks for the mortgage down payment, as well as the costs associated with moving, many will try to negotiate with sellers to pay at least part of their closing costs.

If a buyer is looking to have you cover the closing costs as part of the initial offer, there are a few ways you might be able to make the negotiation work in your favor:

• Can you use this as leverage to move the closing along more quickly? If a quick home sale is important to you, perhaps you can negotiate to cover the buyer’s closing costs in exchange for a quick, hassle-free sale.
• Ask for the buyers to pay full asking price (or even above asking price) to cover the closing costs you’ll be paying on their behalf.

Again, you’ll want to consider the market and what leverage you have when deciding whether to make these concessions. If inventory is low and you have multiple offers coming in, your best bet may be to see what else comes along — and wait for an offer that comes with the highest purchase price and the least number of concessions.

9. Know when (and why) to walk away

As a seller, you need to make sure you’re satisfied with the terms of an offer before signing on the dotted line. Because once that purchase agreement is signed by both parties, you’ll be locked into a contract that won’t be easy to break.

With that in mind, it’s crucial that you work through all of the big negotiations before you accept an offer. This includes negotiations around selling price, who pays closing costs, and any inspection or financing contingencies.

Here are a few common red flags to watch out for during this process:

• A buyer doesn’t include an earnest money deposit with their offer (or their earnest money deposit is very small)
• The buyer asks for multiple concessions at the outset — from requests to have the seller’s personal property included in the sale, to having all closing costs covered by the seller
• Lowball offers that are well under asking price
• An insistence to rush the closing process and move in early
• Too many contingencies
• No mortgage pre-approval

All of these issues point to a buyer that may either be too difficult to work with or not serious enough to follow through with the sale. Especially if you have multiple offers coming in, it pays to think carefully about the offers you receive — and weed out the ones that could create major headaches throughout the process.

It’s worth repeating that there are consequences associated with walking away from a contract. Here are a few big reasons you’ll want to consider your offers carefully:

• The buyer could take you to court and sue for monetary damages
• You’ll need to return the buyer’s earnest money deposit
• You could be forced into a court-ordered sale of the home, which is known as a “specific performance.”

Having an experienced real estate agent by your side will help tremendously through this process. Chances are, they’ve worked through enough real estate transactions to be able to spot a difficult situation as soon as it arises.

Bottom line: To win a house negotiation as a seller, know your objectives

Your house is likely your biggest investment, so you need to make sure you keep your best interests in mind throughout the sales process — whether the primary goal is a fast sale or to maximize your profits. If buyer negotiations cross a line that no longer aligns with your goals, don’t be afraid to say “no” and decline the offer.

“We have no problem just walking away,” says Blum. “If it doesn’t work, that’s fine. We’ll put it back on the market.”

To give yourself the best chance of success in winning the negotiation process as a seller, it’s important that you work with a top real estate agent in your area. “The experience really is the most important part of being a Realtor® in this market — especially for sellers,” Ardolino says. “It’s key that they have someone who can negotiate on their behalf and use the leverage we have right now.”

HomeLight’s free Agent Match tool will help connect you with a real estate agent in your area who has the skills to lead you through a successful home sale. All it takes is two minutes and you’ll receive a list of real estate agents that have the experience you’re looking for.

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