Art and Science
One of the most intriguing aspects of being a Realtor is observing the twist and turn that goes with determining current market values through the dynamics of negotiating. One thing I learned early on in my career is that establishing a price for a property truly comes down to an agreement between a willing seller and a willing buyer at any given time. Anything else is purely speculative - "what if" or "could a, should a".
I soon decided that the best I could expect to do as a facilitator working in the middle was to simply give my client a perspective based on logic and personal experience. I also had to come to grips with that my take on the "facts", no matter how well researched or intentioned, may not be totally accurate. Let me demonstrate - hold up a dollar coin to a friend, and ask them to describe to you what they see. What may be real for them is the Queen's profile, while your view is only a loon; two different perspectives of the same reality with both being correct.
Now some people are quite competitive, and will approach negotiations with a "win - lose" attitude. This personality type must feel as if they achieved power over the other in order to be satisfied. Rarely does this style work. In fact, it can even make the party on the other side dig in harder. Several weeks ago, I received an initial offer on an acreage that was 25% below asking price. Along with it came a long list of reasons, all of which I knew the seller had taken into account when placing a value on the property. I didn't dare repeat what the seller had to say about this particular buyer, so simply chose to respond to their agent with a "thank you but no thank you". A week later another buyer made a much more respectful approach and was successful in securing the property at a reasonable price.
We are coming out of about two years of recessionary pressure. For some sellers, it meant sell quickly or lose their home and credit rating. Today, buyers still think that making a "lowball" offer may bring success. I prepare my seller clients for this by stating that almost every offer we will receive will be low, and that there are two types of buyers in the market - bargain hunters and serious ones. When you attempt to negotiate with the former, they will simply disappear, assumably to try their approach again on another unsuspecting seller. Sincere prospects on the other hand, will stick around and engage in several rounds of negotiation. Often, the trade can be put together to everybody's satisfaction somewhere between the list price and opening bid.
Motivation is definitely a part of negotiation. Where I personally draw the line is when one side is attempting to take advantage of the other party's circumstances. A single parent needs affordable housing, and doesn't take the time to properly inspect a property. An elder without family nearby feels under duress to sell as their health will no longer allow them to maintain a house and yard. And while it is true that approximately 40% of our Group's practice is due to relationship breakdown and 20% to significant life events such as critical illness or death; I believe as a professional we still have a duty to be fair to all involved, even we don't directly represent them. That's the way I would want my loved ones treated, and I am sure you do too.
Vern McClelland is an associate broker with RE/MAX of Lloydminster and a partner with The Midwest Group. If you have questions or comments on this article or other real estate matters, he can be reached at 780.808.2700 or through the website www.wesellmidwest.ca
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