When To Make Concessions On Your Property Deal
To tell you the truth, I hate making concessions on a property deal. In most cases, it is construed as a telltale sign that you (the seller) are hurting economically and are desperate for the deal to go through even if it costs you a little extra. While this might be true for some cases, in most, concessions are just a way to help the deal move along so that everyone comes out of the entire process a little happier than they went in.
For example, a young couple looking to buy a home might not have all the money you are asking for, but just because they remind me of my daughter when she was just starting out, I will be more inclined to reconsider their offer provided I do not sell the house at a loss. In this kind of deal, I have made a concession in the form of price reduction – whereas I’ve lost some of my profit, I have gained a good night’s sleep knowing that I helped a young couple make one of the most profound investments of their young lives. It is all about the little things you do in life that make you happy, isn’t it?
Granted, I did have a friend that thought I was crazy for being sentimental like that. And perhaps, sentiment should not be a basis of when to make a concession. So when should you consider doing so?
For the most part, concessions on a property deal will be guided by one goal and one goal alone: ensuring that the deal goes through without further hitches. So, if you want to sell that house as fast as possible, you might have to make concessions. Here are some typical examples of when to make concessions:
When the market takes a sudden dip
Although not very regular, the real estate market does take a few dips every now and again. Should you find yourself in a situation where you need the house to sell at a particular time but the prevailing market atmosphere is not so friendly towards your demands, you might have to make a price concession just so the house can sell faster.
If, for some reason, you need to sell at a certain price, the other concession is granting flexible terms.
Rather than getting all the money today, you may let the buyer pay the down payment on a monthly basis instead. In that way, they don’t have to cough up 10%-20% of the value immediately, which might make it easier for them to meet your price.
These types of payment terms have been introduced by investors like Rick Otton and Reena Malra for more than a decade now, so it’s not an uncommon option. It’s something you may want to keep open if you are looking to sell quickly.
When you realise you have asked for more than you will get for that house
This happens more often than you might think, especially when dealing with rookie estate agents who are keen to make a name for themselves. Should you discover that your house has been over-priced or that, try as you may, you are just not getting the kind of offers to match your pricing, then you will have to bring that price down or risk the house becoming a permanent fixture in the market.
When the inspection results are not so flattering
Smart buyers insist on an independent inspection report before they make a down payment. Should this report come back a bit more negative than expected, you might have to make a few concessions just to cushion the blow and to ensure that the lined up buyers do not run for the hills.
The biggest reason, however, to make concessions is when your house has been on the market for far too long. This only means that it will lose value the longer it has that ‘For Sale’ sign attached to it. In this case, you can either make a concession and sell it or hold fast to your guns and risk your equity in the process.