The YouMove Guide to Selling

Negotiating and accepting an offer

By the time your get to the negotiations you will have already valued your home and decided on your ideal price and the minimum price you're prepared to accept.

Emotional control

Contrast that with someone who is not confident about the value of their home. They'd like it to be worth £200,000, but that figure is based on guess work and wishful thinking not on a proper valuation.

If this person receives a couple of low offers then their confidence will be knocked even further. It's at this point that they're likely to make an emotional decision and accept a low offer because they're scared that if they don't they'll miss out altogether.

The seller who is confident in their valuation doesn't do this. They see low offers for what they are — try-ons by bargain hunters. They know that as long as they haven't overpriced their home someone will come along and offer the right price.

Getting the best price

Emotional control protects you from accepting offers that are too low, but you still want to make sure that you get the best price you can.

You've got your house looking it's best. You've done your homework, you know how much it's worth, you know the minimum you'll accept and you've set a price that allows you some room to negotiate. What next?

Unless it's a very buoyant market, your buyer will probably expect to pay less than the asking price. That's fine, but it's not your job to give anything away.

Don't be in any hurry to begin negotiations. Look after you buyer. Let them get to know you. Find out about them and be as helpful as you can answering their questions. Give them time to imagine it's their home. Let them develop an emotional attachment to it.

First move

Let your buyer make the first move. They'll probably ask "Will you take an offer?" Ask them what they have in mind? Don't say any more until they've told you their counter offer — silence here is golden.

Remember that whatever figure they give you they will expect to end up paying more. If the figure is very low you should have no trouble looking shocked! Even if it is reasonable you should at least look disappointed.

When you do respond, however, remain polite. You don't want to alienate your buyer at this stage by telling them that their offer is ridiculous. Simply make a counter offer as follows:

• Remember, you know the minimum you're prepared to accept. Now is when you begin to use the negotiating room you gave yourself when you set your price — a 5-10% cushion before you get down to your ideal price. After that you're on to your reserve, ie, the difference between your ideal price and your minimum price.
• When you respond to their counter offer don't come down too far too fast. Anchor in your brain your original asking price. Use that as your reference point, not the figure that your buyer has just given you.
• This is important as otherwise you risk dropping your price too far trying to catch up with the figure the buyer has just put into your head. Take your time — let them come to you.

Negotiating points

Following the advice above should put you in a strong position, but it still helps to have a few negotiating points as well:

• Let your buyer know how much interest you have had. If you have several more viewings over the next few days say so. This will convey to them that there is plenty of demand for your property and that their bid should reflect this.
• Create a sense of scarcity. Tell your buyer that with so much interest you really don't think the house will be on the market much longer. People hate the thought of missing out on something they want and tend to act accordingly.
• Use existing bids to establish a floor below there is no need for you to even entertain offers.
• Play one buyer off against another to bid the price up in an informal auction.
• Use stamp duty thresholds to create leverage as described in step 1 (this only works if the price you're expecting to sell at falls just below one of the thresholds).
• If you're getting close to a deal, but you still need the buyer to come up a little bit on the price now (and not before) is the time to offer to throw in something extra:
• is there anything that they've mentioned that they like? The carpets, maybe, or the curtains or some other fittings that weren't part of the offer, but which you could live without?
• you might be able to trade £1,500 of carpet and curtains for an extra £5,000 on the price of your house. Why? Because when people are excited about getting something their emotion leads them to over value what they want and make a poor bargain.*
• Don't blink too soon if the buyer goes away to think about it. Give them a couple of days to get in touch with you. If they see you're not in a great hurry to get in touch they may well assume it's because you have other offers.

* At some point you will need to complete a TA10 Fittings and Contents Form. This sets out exactly what is and is not included in the sale, plus anything that is not included, but is for sale at an extra cost (and at what cost).

This form will be supplied to you either by your HIP provider or by your solicitor. Some people choose to complete it at an early stage and include it with the HIP. Others will wait until an offer has been received and complete it based on what was agreed in the offer.

Sealed bids

If there is a lot of interest in your property, or if it is particularly rare or desirable, then you might consider using sealed bids.

First, you need to set a guide price over which offers will be accepted. You then contact the interested buyers with the details and the deadline by which you must have received their offer.

An alternative approach is to conduct an open house viewing attended by all the interested buyers who then either leave their best offer in a sealed envelope or send it to you.

Be in a good mood!

Research has shown that a sad person will sell the same item for a lot less than a happy person would. This relates to a subconscious desire to do something to improve their mood (in this case, make a sale).

So, make sure you're in a good mood when you're buyer arrives and don't let any negative comments they may make about your house bring you down. Enjoy the experience!

Things to watch out for

Be on your guard for tactics that buyers will use to push you to accept an offer:

• Some buyers will be ready to move faster than others. They may already have cash in place or not have to worry about a chain.
  
  These may well be reasons to take their offer over someone else's, but don't be too hasty. For all they know you may have other buyers in the same position. Take your time if you want to get the best price.
• Don't be thrown if buyers make derogatory comments about your house, garden, decoration or neighbourhood, etc. These comments are designed to soften you up to get you to accept a lower price. Let them wash over you.
• If the buyer sends round a surveyor just leave them alone to get on with it. You already know how much your house is worth.
• Never let yourself be forced into a decision when you're not ready, however pushy your buyer is being. Explain you need time to consider their offer in light others you may have or that you need to discuss it. If they're that keen they won't mind waiting.
• Just when you're ready to sign contracts the buyer comes back and offers you less. This is one where you need to use your judgement. If you've had plenty of interest and the market is good you probably don't need to accept it. If, however, the market is weak or you've had little interest you may need to drop your price.

To further safeguard yourself against this last scenario you can continue to market your property until the contracts are signed. If the worst happens and the original offer falls through then you're likely to be much closer to getting a new one.

Plus, you never know if you're going to get a better offer. If you do then you'll have to decide whether to take it, give the original buyer the chance to increase their offer or stick with what you had originally agreed.

Accepting an offer

If your negotiations have been successful then you will have got to the stage where you have verbally accepted an offer.

The next step is to exchange details of your solicitors.
At this point it's over to the solicitors. Your role from now on is to monitor proceedings, just as you would if you were using an estate agent, to make sure that the other parties are moving things along as they should.