3 tips for negotiating with a buyer’s real estate broker
Published on September 11, 2019
You’ve chosen to sell your house without a go-between? Smart decision! While you’ll be in direct contact with some buyers, others may be represented by a real estate agent (broker) when shopping for their future home. Here’s what you need to know to successfully negotiate with a broker.
“Be clear about your intentions, ask the right questions and carefully look over the legal documents. This will help you avoid any unpleasant surprises,” says Martin Desfossés, real estate coach with DuProprio.
- Take a firm stand
- Ask the right questions
- Review the offer to purchase
- Knowledge and trust make all the difference
- You can do it!
You’ve decided to sell your home on your own and not pay a commission. Be aware that real estate agents may attempt to contact you to convince you to use their services. Remind them firmly and politely of your intention. You are fully entitled to reject their offer.
You do not have to sign a brokerage contract with them to schedule a visit with their clients.
During the selling process, you will receive interest from direct buyers as well as buyers represented by a real estate broker. The steps of the transaction remain exactly the same, except that you will not be communicating directly with the represented buyers.
To feel fully confident when dealing with brokers, be sure to ask the right questions from the start. We suggest the following:
- Has your client signed a purchase brokerage contract with you?
If the buyer is represented by a broker, a written brokerage contract is now mandatory following the recent amendments to the Real Estate Brokerage Act. As the broker will already be legally bound to the buyer under this agreement, they cannot solicit you to sell your property if their client is thinking of making an offer on your home. Double representation is now prohibited in Quebec to reduce conflicts of interest.
You should also know that the real estate broker’s fee will be indicated in the buyer’s brokerage contract.
- When would your client like to visit the property?
If the broker wants to view your property without their client present, be cautious! This could be a ploy for them to offer their services. “Know that the amendments to the Real Estate Brokerage Act require that brokers be very clear in their approach,” explains Mr. Desfossés. “If a broker contacts you and has not signed a purchase brokerage contract with their client, what they are doing is purely solicitation.”
- Questions about the potential buyer’s qualification and needs
Finally, establish a good line of communication during the first contact, which will often be over the phone. This will also give you the opportunity to initially screen and identify serious potential buyers. Ask 4 simple questions to quickly determine if the client’s profile suits the property and if they have the financial capacity to purchase your home.
When a buyer is represented by a broker, it is the broker who fills out and submits the Offer to Purchase. The buyer generally has two options for paying the broker’s fee:
- Pay out of pocket.
- Include the fee in the purchase price.
If they go with the second option, the fee is added to the amount you are expecting to pocket as the seller. In other words, you are not required to pay the fee charged by the buyer’s real estate broker unless otherwise agreed. This term of payment must be very clear and understood by all parties during the negotiations.
Do what makes you happy
Your goal as a homeowner is to reach a satisfactory agreement with a buyer, whether or not they are represented by a broker. “If you’re happy with the amount and the conditions, go for it!” advises the real estate coach. “There’s no reason to refuse to cooperate. You’re in the driver’s seat, so you get to decide!”
Elena Maria Semenescu, notary at DuProprio, wants homeowners to know this: “You don't have to accept conditions you don’t feel comfortable with.”
Before signing an Offer to Purchase, DuProprio clients can call on its team of notaries.1 These real estate professionals can go over the clauses of the document with you to ensure they reflect the verbal agreement that was made.
A ruling by the Court of Québec
This is also good to know: the Court of Québec ruled in favour of a former DuProprio client who refused to pay a commission her broker had slipped into the offer to purchase without her knowledge. She alleged that the broker omitting to mention this compensation violated their agreement. See the court’s decision (September 6, 2018, in French only) for the details.
As the seller, your greatest asset when dealing with a skilled negotiator is knowing every square inch of your property.
- Not only will drawing up a detailed list of the renovations that were carried out in the last few years be very useful, but having your own home inspection done will inform you of potential problems that could be found during a buyer’s inspection. You will have an advantage in the negotiations if you already know the work that will need to be done in the next few years.
- Setting a fair and competitive asking price is crucial to your success. The best way to do so is to determine your property’s market value using the comparables method. You can also have a chartered appraiser perform a professional appraisal a few weeks before putting your property on the market, to get a good idea of its worth.
- Knowing the real estate process will help you stay in control of every step of the sale.
- Don’t want to budge on the price? You could always sweeten the deal by including some items in the sale, such as the furniture, light fixtures, appliances or the antique bathroom mirror.
Because we’re human, emotions also play a role in negotiations. Listening and respecting each other will make the experience even more rewarding.
- Show interest in the potential buyer.
- Be transparent and honest, which will help build trust. For example, give the buyer all the relevant information about your property, to the best of your knowledge, in the Declaration of the Seller.
- Be organized and have all the necessary documents on hand, such as the certificate of localisation.
- Ask questions and take time to think things over when needed.
In short, put all the odds in your favour and trust in your negotiating skills.
While negotiating can seem scary, these tips will help you do so with greater confidence. “It's all about your state of mind, counsels seasoned real estate coach Martin Desfossés. “I want to tell homeowners to stop feeling small or helpless when dealing with real estate brokers. No one can force you to accept anything you don’t want. If you don’t feel respected, if you feel pressured, don’t make a hasty decision.”
For 25 years, DuProprio’s clients have received support in making the biggest transaction of their lives, without a go-between. Call our team at 1-866-387-7677 or receive our informational video by email.