It is very easy to sabotage your home negotiation and make the seller not want to do business with you. It is real easy.
BE WISHY WASHY!
Before negotiation you need to know what you want out of the negotiations.
- You need to know when you want to close
- How much you want to give as earnest money
- When you want to take possession of the home
- How much you want to pay for the home
- What else do you want besides the house (like the pool table)
Here is one bad example.
List Price & terms $190,000 possession immediate
Buyer Offers $180,000 30 days possession $8000 in sellers concessions
Seller counters $185,000 30 days possession $4500 in sellers concessions
Buyer counter offers $185,000 60 days possession $8000 in sellers concessions
Seller Counters $185,000 30 days possession $8000 in sellers concessions
Buyer now wants $185,000 90 days possession $8000 in sellers concessions
Sellers and Buyers can't agree on 90 days possession Dead deal
The buyer realized halfway through negotiations that they needed more time to get their money together. It made their real estate agent look foolish. The seller thinks the buyers are crazy. And it wasted everybody's time.
If you want to close the deal you have to compromise. You can't start adding more things on in the middle of negotiations.
- The buyer offered $180,000 so it would be stupid to ask for $170,000 in the middle of negotiations
- The buyer asked for $8000 in sellers concessions it would be dumb to ask for $15,000 in concessions when you are getting close in negotiations
- The buyer asked for 30 days possession, then upped it to 90 days. That's crazy. It threw a wrench into the negotiating gears.
You are going the wrong way. Think of it this way how would you feel if the seller came back and now asked for more than list price after you had 2 out of the 3 items agreed upon. You will get mad. I guarantee it.
By asking for more than what you originally asked for in the middle of negotiations usually has a bad outcome. So decide what you want before starting and compromise or stand firm. BUT DON'T RAISE THE STAKES IN THE MIDDLE OF NEGOTIATIONS.
Being wishy washy in your negotiations will most likely cost you getting the house. So know what you want before hand.
Russ Ravary your Metro Detroit real estate agent
Search Metro Detroit foreclosures
__________________________________________________________
My Month of April quote:
"Sometimes the only way to get to the far shore is to lose sight of the shore you just left"
Russ Ravary
"helping make your move easier"
your local Metro Detroit Realtor helping clients like you sell and buy homes through out the entire Metro Detroit suburbs. I love showing and selling Oakland County and Livingston County Lake front homes too.
What is the deal with 90 day possession? WOW -- the SHORTER the time will be viewed by the seller -- who has "immediate possession." The seller wants to cash out . . . so why not offer a quicker close, quicker possession . . . what a weird negotiation.
I can see why you blogged this . . . WOW!!
Russ, sometimes you just have to wonder...what were they thinking???
90 days is long contract period
I know that after most negotiations now.....I am worn out.
All buyers start low, all sellers are offended, and all Realtors become referees.
Russ
This will do it.
Russ: I am in the middle of a contract negotiation right now where the buyer... and the other agent... have done just this. One area seemed just fine, but other stuff was being negotiated. It looked like we were getting close, and then this buyer brings in something out of left field, and ends up looking insane to my seller. We both looked at each other wondering... what in the world ????
It just sours the whole negotiation, and makes my seller think the buyer is a total flake.
sometimes you have to wonder what people are thinking, had one deal go south after agreeing on price, terms, preety much everything and the deal dies over switching DOOR KNOBS
I wish somebody would give me a closing gift: a referee's shirt and a big loud brass whistle.
Russ - When I read your blog post title, I had to come and check it out. Congratulations on coming up with a unique title and spin on home negotiations.
The logic of this type of scenario escapes me.
Didn't the buyers agent explain to their client that if the seller gives the keys to the buyer the day after closing that they (the buyers) are only entitled to one days worth of the occupancy escrow?
I don't get it.
This whole thing sounds goofy.
Russ...
I always wonder why some buyers or sellers want to go backwards in the negotiations. Do they just want to kill the deal completely?
Russ,
On Sunday, I sat down with sellers and their agent to present my buyers' offer and negotiate a win-win deal. Great rapport, a couple laughs.
Offer - 20% cash: split 2% check with offer, 8% after attorney review, other 10% at close. "Name brand" mortgage approval. Close 30 days, 60 if sellers prefer. Sale price - lowball to be negotiated. I documented 2009 sales of similar homes, pointing out the halfway between list and offer was market value - important for appraisal purposes.
Right then and there, the sellers withdrew their home from the market. Other agent and I couldn't even get them to counter. Sellers decided if they couldn't get what they want, they aren't selling.
Talk about wishy-washy time wasting!
I had a buyer low ball on a reasonably priced house they really wanted. Against my advise. The seller was insulted (it was really low) and didn't counter. Then their scrambling and asking me to put in my original recommendation. To late of course, seller came back with full price.
If you really want it, offer what's being asked with maybe some closing costs. The market here is a little tight right now with the tax credit deadline looming.
Russ, Very good discussion of what happens so often. Enjoyed reading.
yeah, if I was a seller and I was in this kind of negotiations where the terms were changed more often than socks, I would not want my house off the market pending for 90 days. Soemtimes there is the horse that can't be rode as we say in Oklahoma.
I was listing agent once and offer came in below list price, asking for closing costs
We countered something reasonable
Buyers came back and offered even lower sales price, removed request for closing costs
We countered something reasonable
Buyer came back and offered lowest-yet sales price, no closing costs, but wanted a new fence
We thought about countering something reasonable, but I called Buyer's rep (a friend) and told him we were countering full price, no closing costs and a Home Depot gift card.
Can't recall what we finally worked out, but it was something reasonable. :-)
Great post, Russ -- hope some consumers learn from it!
Russ, we had something very similar. After the buyer got the price down he kept adding conditions and demands. The negotiation spread out over a week. Before his offer was signed another one came in which the seller accepted. The 1st buyer who was a jerk....lost.
I think we should make a list of the don'ts in real estate negotiations...Cathy Chaudemanche
I agree with Linda, it seems that we are trying to console hurt sellers more than negotiate deals. I look forward to the day that buyers quit listening to CNN and listen to the real estate professionals.
That is crazy. Buyers must not have loved the house...
Morning Russ, This buyer should have had their financing in order well before this point in the process ! Good reminder for buyer agents.
Hey Russ - I wonder if this situation happens more with inexperienced agents who don't know how to assist and educate their clients. I have seen that for sure in my office. Takes a quick wake up call and sombody to say - what in heavens were you thinking going backwards and giving them such ***** advice.
Russ - negotiations is a very sensitive topic. Your story of how to sabotage negotiation is an excellent example of lack of leadership skills in the buyers agent. Confused, mislead, unprepared or undereducated buyers act out of fear, not out of desire to own this home on reasonable terms.
We can also add a lot of example of how the sellers' agents can "help" to sabotage the negotiations, too. Fake multiple offers or "another agent just called and asked how to present an offer" are just two samples.
This really must have had you banging your head on the table. Good observations. People are odd sometimes!
How this apply to Toronto's asking price for Roy Halliday ????
If the buyer wants that long of an escrow as 90, there should be a 72 hour R of R and the status as Pending-Contingent-Continue To Show and the R of R in the agent remarks . . .
I wrote recently about negotiating too Russ - there is so much to learn for most agents. And principals . . .
I couldn't help laughing at that scenario, but then I don't think I would be laughing too hard if it was one that I was in the middle of!
People do crazy things. Sometimes as an agent you cannot tell people, you just have to do what they ask. Sometimes they learn and sometimes they do not.
I don't believe I've ever seen anything like that. But if I do, at least I won't waste any time being shocked now that I've read your post.
Why does the buyer think this way?
Sounds familiar...I've had some real doozy's lately! :-(
Thanks for the reminder to counsel with the Buyers before starting negotiations. You have to know what you want up front and do your best planning that will lead to that outcome (or better!).
I sort of have that going on in an accepted offer. It really makes people upset.
I'm all for giving buyer's IQ and mental stability tests before working with them. It's all about whether they truly want to buy a house or do they want to learn a much needed lesson.
All we can do is advise and sometimes they listen. I bet that buyers agent felt worse than you as he had to battle his clients, that were not straight up with him in the beginning and, he has to feel bad for you, a fellow agent for putting you through this disaster.
Russ,
I agree. And, you don't know how many times buyers and even sellers want to "go back" on something they have already agreed to.
It really annoys the other party, no matter how small it might be.
Brian
Russ, don't 'cha just LOVE it when this happens? It does make you feel foolish and like you don't have control of your buyer when they throw things out like this. BUT....we have to do what our client wants. That's when we have to grin and bear it. Unfortunately.
I couldnt agree more, both parties need to enter the negotiations knowing what they want, ..... In this case it looks to me like the important terms for the buyer were the 60-90 day settlement and $8000 concession. It seems to me that the sellers next step should be to accept...If he dosent he's the one I see as unreasonable. And he will probably still own his home 90 days from now. If I was the buyer Id be getting upset and begin looking for another home, or wait the seller out. In 90 days I could probably get it for 175
Gee...you hear it all here.
I know there is give and take in negotiations.
We learn we grow, but this is a little off the top.
Russ - Clear example and very well written post.
I think that this buyer's market had added to the confusion. i.e. Some Buyers believe that they can make any unreasonable offer.
The gambits is negotiation are of utmost importance. Both sides have to feel that the other side is negotiating in good faith by moving the right direction!
I was purchasing a home once when the seller was the one that was wishy washy. We ended up not buying and it took another 2 yrs and a price reduction of 40,000 before it sold!
Human nature...it's a b***h!
Negotiation 101.
Have your buyers and sellers bid their walk away terms. All, always in writing. Be polite and pleasant to all parties.
The End.
Tony Barker
You hit it on the nose! I am actually going through that now. Great post.
Wow, that's rough when the parties fail to narrow the issues, and find a way to come to closure! Remember to breath...John
i don't think I have ever came accross that scenario yet
I agree Russ. The Sellers may feel that they are dealing with unreasonable and worse than that unrational Buyers. My advice RUN.