Negotiating the Highest Price in a Seller's Market

Let's suppose you and your agent have just listed your home on the MLS. You've followed these 5 tips for a strong listing, and you're off to a tremendous start. You've received 10 immediate showing requests and the early feedback is very positive. Buyers are loving your home; several are thinking of writing an offer. You like your odds for receiving a full-price offer, but can you leverage what you have into an accepted offer that is far, far above the list? Can your agent shoot for a price that is 3 percent above the list, 5 percent, or even more? The answer is yes, and here is how you agent can do it.

6 Tips for Negotiating the Highest Possible Selling Price

1. Be helpful and easy to work with. Buyers are generally open to negotiating with someone whom they perceive as helpful and likeable. With this in mind, your agent will answer all questions about your property as quickly and as fully as possible. 
2. Proactively and openly communicate with all buyer agents who have scheduled showings to date. Your agent's job is to encourage as many people as possible to write an offer on your home. He'll let each showing agent know about the tremendous amount of interest in your listing. He'll also encourage the agents who have not yet shown your home to move up their showings so their clients have a shot at writing an offer. Your agent will call and email each showing agent to ensure each agent gets the message.
3. Suggest a selling price that is far above the list. For example: when your agent speaks to buyer agents he can share how the strong response to your listing has far exceeded his expectations. He might even share his gut feeling that your home will sell for well above the list. Here your agent is using the power of suggestion to drive up the bidding price on your home.
4. Justify a selling price that is far above the list. In his conversations with showing agents, your agent will give the other agents some very good reasons to write a very strong offer. For example, your listing agent will share his knowledge of the market and how the market is impacting the dynamics of your listing. It's not the recent sales in the area that will establish the final selling price (in this fast-rising market sold comps are often old news). It's the momentum of the market that's setting the price on your home. With high demand and low inventory, several different buyers are competing for your listing. These real-time market dynamics ultimately determine the final selling price of your home, not the sold comps.
5. Provide all parties with a status update when your first offer comes in. Once again, you agent will call and email each showing agent. He'll let each agent know about the window of time that they have to submit their offer. Your agent will encourage as many offers as possible because your negotiating power increases with each additional offer that you receive.
6. Negotiate and accept a secondary offer once your primary offer is accepted. This is a great tactic for your agent to employ in the event that your primary offer should fall through. It also helps you operate from a position of strength as you negotiate any potential follow-up to the home inspection with buyer #1. With knowledge of your solid Plan B in the fold, buyer #1 most likely will choose not to quibble with you over minor issues that arise during the inspection.

It's worth noting that establishing a strong negotiating position begins with effective marketing and proper pricing. Your buyers will come when your marketing plan and your price point are on the mark. Then it's a matter of your agent advocating your best interests and communicating effectively on your behalf with all interested parties. With all of these elements in place, many Madison home owners are learning they can sell their home for well above the list price in the 2013 real estate market.