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It Isn't About Win-Win!

Many agents use phrases they really do not understand. A deal in this market is not about a "Win, Win!" It is more about "Winner take all!" This market is a buyer's market on steroids. The sellers are not in control by any stretch of the imagination. So when the listing agent says:

The home appraised for 150K more last year!
We are selling it for less than the tax assessment!
The seller's owe more than you offered!
The seller is out of work and cannot accept this offer!
There is a second mortgage on the home...
The seller will have to come to closing with 20K

How is this your buyer's problem? First of all, it isn't! As a buyer's agent, the task at hand should be to negotiate the best possible deal for your clients and enlightening them as to as many aspects of deal as possible. It is not about netting more for the seller, or for the listing agent to have a better set of LP/SP ratio stats. It is about negotiating on steroids to get the best possible price and terms for your client. When you complete the deal it is about that buyer client being so satisfied with your results they will tell others!

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Posted by Jim Crawford ~ Atlanta Real Estate-ABR E-PRO on 05/16/2009 06:32 PM

Comments (21)

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Originally posted at: Atlanta Real Estate | Atlanta Housing News for Real Estate: It Isn't About Win-Win!

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21 Comments on It Isn't About Win-Win!

MAY

Jim ~ I agree, but you (or anyone) as the buyer's agent can't get any better of a deal than the seller is willing to give. If the seller doesn't have the difference, then he can't sell it any cheaper.....Yes, you don't know if you don't ask, but that still doesn't mean the seller will say yes. It is up to the seller to accept it or not. Agents are not the one's to make any of the actual decisions.

We here that from an inexperienced negotiator. They are doing their fiduciary duty by trying to negotiate in their clients best interest, but, perhaps, not with the right techniques. I had the exact same thing happen where the selling agent said their client would have to come to the table with $17k. I merely said "I am so sorry" and shut my mouth thereafter. I truly am sorry, but it is what it is.

Buyers have to be realistic, but not charitable. Market value matters. The buyer's needs matter.
Condition of the home matters. The seller's problems are of no concern.

Owensboro KY Real Estate Specialist Vickie McCartney, Broker, ABR (Home Realty GMAC Real Estate Owensboro Kentucky) I recently did a buyer deal where I got a refrigerator, closing costs, price reductions, upgrades, blinds etc... When other agents asked us how we got so many concessions, we said "We asked for them firmly!" If you don't ask, you don't get.

Tim Moncrief, Co-Owner-Bartlett RE Group (Keller Williams Realty ) I have had sellers come t tht table with 45K. That is life. If they took the money out of the home wihta HELOC, I hope they enjoyed it. They are not entitled to 2 uses of the same funds!

Jim, I saw this phrase batted around today myself and had much the same thought. I look at it as a Win-Ouch or a Win-Bleed situation...

Jim, absolutely. The market doesn't care what you want, what you need, what you paid for it, what your neighbor says it's worth, what another agent says it's worth. The value of the home is what the buyer is willing to pay and the seller is willing to accept.

Sharon

Paul Henderson, Realtor ® Lacey & Dupont Washington homes (RE/MAX Professionals & Four Seasons Inc.) A agent friend of ours had a contract rejected recently because the seller would be out of pocket 10K! So how is that the buyers problem? Does the seller realizewhat their agent is conveying to the buyer? In this case the buyer did walk, because they had completed quite a bit of research before submitting the offer and they already made a generous offer.

There was a year I purchased Lucent stock at $53 / per share. I sold it at $3.75 / share. It was no ones problem but my own.

Frank & Sharon Alters, ePRO, GRI Fleming Island FL Real Estate (Watson Realty ) You are so right, and in this market it is what a bank is willing to lend on a property.

It is a buyers market, but buyers don't pay attention when a home is priced out in front of the market. That is an agent responsibility.

Managing expectations is an agent responsibility on both sides of every negotiation.

MAY

Jim - Its amazing how many agents want to appeal to you and your buyer's emotion to further their seller's cause. They either want to accept the offer ... or they don't. Knowing the seller's situation and motivation can help the buyer negotiate, and if they play to that so the seller is satisfied then it can be construed to be win/win negotiating... in fact it is playing to win using the tools that are available to you. Nice reminder. I always say, anybody can do "split the difference" negotiating - it takes true skill and mindset to get the advantage for your client ... to do our job in other words. Nice post, Jim. Thanks for the mindset.

I read and re-read this. Great reality check. It really is a buyer's market on steroids, but I've also learned that a seller is not going to charitably give away the house, having to take $100,000 out of his own pocket so a buyer can have it. There seem to also be buyers that believe houses are being given away. There are deals to be had, for sure, but I had one seller say after a ridiculous offer, that it would be better for him to bulldoze the property and keep the land as an investment.

Michael Caruso Real Estate Group That is correct, but if a buyer is working with an experienced buyers agent that has weathered bad markets before and advises the client correctly. I find it is the listing agent that does not have a clue. They advise the sellers. You cannot price a home 150K over market because the sellers purchased it at the peak of the market with no money down and then took out a HELOC. Empathy is great, but it should not cloud the facts. Home values have dropped in value, there are fewer buyers, and it is harder to get financing.

Jim Valentine (RE/MAX Realty Affiliates) Most agents that want a win-win are in experienced. Their only knowledge in real estate is that prices always go up. That is a total fallacy. What the listing agent lacks is historic background, and negotiation skills.

Mara Hawks, REALTOR®, First Realty Auburn, Alabama Real Estate (FIRST REALTY Auburn Alabama) The seller has that option, but in the mean time his home sits and loses more value. No one that has equity has to give away a home unless it is their choice. It is a choice not unlike a stock owner. Lucent is $83 a share and falls to $53 a share. I bought at $53 and when it kept going down...I figured it has to come back. It never did. I sold my stock for $3.75 a share. Homes are a much more expensive proposition. We must consider competition from distressed homes, foreclosures, rising unemployment, and closures of small businesses. Now we have a smaller pool of buyers competing for fewer sales. It is an economic thing. Prices are going to continue on their way down for a while to come.

For those sellers that want to get from point "A" to point "B!" They will negotiate until it hurts to get the best possible deal. Dismissing the only buyer because someone's ego gets bruised easily is not a smart thing to do. All we have to do is turn on the local news, read the papers. Things are tough all over. As a buyers agent, I can educate my buyer, but it is up to the listing agent to educate the seller's.

MAY

Hi Jim, thanks for taking the time to explain so much. It is so helpful to me. I have 2 sellers of new, completed construction, that were originally "investors" of a builder's associate/investor group. The builder is in C-11 & the house is now completely owned by the investor who has acquired the full debt to the bank, having had to refi and put it totally in his name. It seems the only hope is to attempt short sales, which we are going to begin doing today. Have a day of greatness!

Mara Hawks, REALTOR®, First Realty Auburn, Alabama Real Estate (FIRST REALTY Auburn Alabama) Thanks so much for sharing.

Jim - Not every seller qualifies for a short sale and those who can't may not be able to pay out of pocket. As a seller's agent I had tried to explain to a client late last year how taking out a personal loan for 20k to write a check at closing would be far better than hanging on to a 250k mortgage on a vacant home. Anynody who does the math can see this, yet the seller still resisted the idea. Psychologically, sellers see it as a loss when they haveto write that check at closing. Yet, paying property taxes on top of a $1500 mortgage payment plus utilities can add up to the same 20K loss if the same house remains on the market another 8 months. Even when an agent does the simple math, sellers are still don't get it - or just don't want to.

Carol Culkin (Houlihan Lawrence Realty) You are exactly right. Several sales last year the seller wanted to walk away without the blemish on their credit. The contacted friends, families and took out small loans. They did it. This year with the low rates they are already able to buy a new home. The new home has a lot of extras, and a much lower interest rate. Sellers are too emotional to make hte decisions, that is why they need a good agent like yourself to tell them the truth.

MAY

Jim - this is yet another reason that a client may choose to be represented by a buyer's agent rather than a transaction agent.

Sharon Simms St Pete FL - CRS CIPS CLHMS RSPS (ALVA International, Inc.) You are right. The problem is they many buyers agents are really not representing their client. They are buyers agents in name only.

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