After two decades of investing in real estate, I’ve learned a thing or two about convincing someone to buy a property that might not be the perfect fit for them. Mastering negotiation skills is crucial, especially in today’s market with its high mortgage rates and prices.
Sometimes, you encounter properties that are less than ideal and challenging to sell. I’ve shared numerous tips to help buyers secure the best deals, but it’s equally important for sellers to achieve favorable outcomes.
One fundamental rule I promote is the 30/30/3 rule for buying a home. If potential buyers don’t meet this criterion, they probably aren’t in a position to buy comfortably. However, the allure of a dream home can sometimes lead people to stretch beyond their means.
For example, back in 2017, after showing my San Francisco house for 30 days, I received just one offer. This was surprising for such a hot market, but I anticipated it since I had no offers when I attempted to sell five years earlier for 40% less. The location on a busy street was a significant deterrent for most families, attracting only a group of roommates during its time as a rental.
The eventual buyer was a 47-year-old venture capitalist with significant personal changes on the horizon, including leaving his job to start a new venture. Despite the risks, his bank finally approved him for a $2.4 million mortgage on a $2.74 million home, with only a 10% down payment.
Here’s how you can encourage someone to buy your home, even if it might not seem like the best financial decision for them:
1. Create a sense of urgency (FOMO): Although I had limited interest, I leveraged every inquiry to create the impression of high demand. By suggesting we were busy with other potential buyers, we encouraged the actual buyer to make a higher offer.
2. Showcase the property’s history and improvements: Provide detailed records and visuals of all the renovations and maintenance. This not only demonstrates the care invested in the property but also helps justify the asking price.
3. Sell the lifestyle: Enhance your listings by sharing personal stories and the lifestyle benefits of living in your home. Describe the community, the convenience, and the joys of living there to make the property more appealing.
4. Appeal to emotions over finances: Buying a home is an emotional decision for many. Highlight the happiness and life quality that the home offers, which can overshadow the financial stretch a buyer might be making.
5. Highlight economic potential: Discuss factors like market trends and upcoming developments that might increase the property’s value. Understanding these elements can reassure buyers about the long-term benefits of their investment.
Selling a home involves careful strategy and sometimes means playing up the emotional over the economic aspects of a purchase. While it’s important to secure the best deal for yourself, always ensure transparency and honesty in every transaction. Both parties should feel confident and informed throughout the process.
