Congratulations! You've found a prospective buyer who wants to take a closer look at acquiring your property. What happens next?
Now it's a matter of turning the interested party into a buyer and enforcing your demands in the negotiations.
Plan your negotiation goals in advance and avoid making spontaneous, major concessions that you'll later regret. After all, you're not the only one with a goal – the sale – but the prospective buyer also has a strong desire: to acquire your property at the best possible (i.e., lowest) price. Finding a compromise always means that both sides have to make concessions!
Price negotiations
Every buyer will strive to acquire their dream property at the best possible price. Therefore, negotiations over the purchase price are almost always tough. To have a strong starting position as a seller, you need to be well-prepared! This includes having researched the market value of your property .
You need a good overview of past prices and the current market offerings, because your counterpart will have this information. As a serious buyer, they will have viewed numerous properties and will be aware of the competition's offerings.
Therefore, obtain comparative offers. A professional market valuation of your property can also be very helpful in supporting your asking price. From the outset, plan for some room for negotiation that you can then grant without going below your minimum acceptable price.
If you've made a realistic assessment, you have strong arguments. However, don't give in to your negotiating partner's demands too quickly. Otherwise, the impression will be created that "there's still room for negotiation." Then, renegotiations are inevitable!
Besides the price, several other points will be negotiated. This offers the opportunity to offer alternatives to price reductions. Some are listed below:
Payment date
Many buyers first need to terminate a rental agreement or sell their own property. This often results in a temporary double burden. Against this backdrop, you as the seller can offer to postpone the payment date, for example, in exchange for a higher purchase price.
If your property is already vacant, carefully calculate the costs you will incur and whether such an offer is worthwhile for you. However, the same principle applies here: if payment is delayed, the property cannot be handed over until later.
inventory
Often, furnishings are included in the sale. For example, the fitted kitchen, the garden shed, or other higher-value items.
If you don't include all the furniture you actually want to sell in the price, you can later offer, for example, the high-quality fitted kitchen as an extra instead of a price reduction.
Handover time
Decide from the outset when you can hand over your property to a buyer at the earliest. Don't underestimate the time you'll need to relocate your household. You might still need to renovate your future home, or you might even be looking for a new property yourself. The handover date is stipulated in the purchase agreement and is legally binding!
If you already know where you're moving to, or if your property is already vacant, you can make concessions here. Important: Do not hand over your property until you have received the full purchase price!
down payments
If payment and handover are agreed upon for a later date, the topic of a down payment comes up. Caution is advised here! If you can secure a down payment during negotiations without granting the buyer access to your property yet, this is perfectly acceptable. Such an approach might be conceivable in exchange for a later total payment date or a lower purchase price. Your advantage: You gain access to funds sooner, which you could potentially use to purchase your next property.
Buyers often insist on being able to begin renovations or remodeling immediately after making a down payment. While this is understandable from the buyer's perspective, it poses several risks for you. If you intend to proceed in this manner, ensure that the contract clearly defines which measures are permitted.
You must also be certain that the deposit you've paid is sufficient to cover your losses in the event of a reversal of the contract (e.g., if the main payment isn't made). Overall, such agreements are risky. You should definitely seek advice from an expert (e.g., your notary or real estate agent) regarding the implications.
For all forms of down payment, such provisions may only be included in the purchase agreement. Otherwise, the entire contract may be invalid. Your notary is best placed to advise you on this matter.
Settlement costs
As a rule, the buyer will bear all costs associated with the sale. This includes notary fees, land registry fees, and property transfer tax. Costs for clearing any encumbrances not assumed by the buyer will be your responsibility. However, you are jointly and severally liable with the buyer for these costs. Therefore, ensure the buyer is fully aware of all additional costs beyond the purchase price of your property. This will prevent any unpleasant surprises.
The same applies to negotiations: good preparation and expert advice lead to the best results. Seek compromise, but don't set your goals too low! Good luck with your negotiations!
