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"THIS is my FINAL offer!"

By Barry Owen

Real Estate Broker/Owner with Pareto Realty TN #251071

April 24, 2008 11:25 PM

Have you had any great negotiations recently?

I think "dancing" through a negotiation is one of the most fun aspects of this business. It's an art form. Everyone does it differently, and we all do it for the same reason: To get the best deal - a "Win-Win agreement".

The best negotiators understand the need for PATIENCE and TIMING . . . and really get the importance of holding their tongues. Lose your cool, and you'll likely lose the cooperation and respect of the other party.

Think about EVERY word that rolls out of your mouth - intonation - pace - confidence - and well-thought out creative solutions.

Remember the goal is to REACH AGREEMENT - not to squash the "opponent"

Know that this negotiation is nothing more than a "formal conversation" to find accetpable terms for both the Buyer and the Seller. The Buyer wants the house and the Seller wants to sell it . . . Don't get in the way by pushing too hard.

Be careful with strong messages such as "THIS is my FINAL OFFER!" unless it REALLY is. I don't EVER recommend such definitive language in a negotiation . . . but I DO coach my clients to "know when to quit" . . . At the beginning ofthe negotiation, we talk about where we want this thing to end - We then can negotiate with an "End in mind"

An agent called me somewhat freaked out about the fact that she was in a negotiation that "stalled out" $20,000 apart - The Buyer had said "FINAL OFFER" . . . She told me the negotiation was over because "My Seller would NEVER go that low."

Talk about "Limiting beliefs" . . .

I'm just sayin' . . .

I coached her:

How long have you been negotiating?

2 days

How many counters?

Buyer offered - Seller Countered - Buyer gave "Final offer" - OVER!

STOP!

Now, are you telling me this Buyer took the time and energy to fall in love enough with a house to put a good chunk of earnest money out there and write an offer just for a 48 hour negotiation? And the Seller staged the house and showed the house and all that goes with that . . . and they are both ready to quit after a 3 exchange conversation?

My advice was to keep her client in the game and counter this "final offer" and let things take their own pace.

RELAX!

Give everyone a chance to breathe and think about things. Rushing through this does not help the goal of finding agreement. I'm OK if it takes 2 weeks or 2 months to find agreement . . . Of course, the longer it takes (in this market of high inventory) the better the odds that the Buyer might get distracted by a "shinier house" . .. or that an unforseen other Buyer might appear with another offer on the house creating a "multiple offer scenario" ... We all must do this dance knowing these possibilities exist.

Ummm ... After a 9 day conversation, the Buyer and Seller reached agreement. Both are tickled pink with the deal . . . and it'll close in 3 weeks.

Art form - Dancing - Breathing - conversing - Open minds - cooperative - end in mind . . . It all leads to win-win agreements.

Best,

Barry Owen

Principal Broker & Productivity Coach

Keller Williams Realty - Nashville, TN - Green Hills

www.theowengroup.net

www.creatingspaces.blogspot.com

Simply & BOLDLY Living the FourFold Way in Open Space!

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Lenn Harley

Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate - Leesburg, VA

Real Estate Broker - Virginia & Maryland

TOTOH, if that "final offer" had been in writing, the seller may have accepted it. Or, would surely have been tempted to keep it going.

Verbal negotiaion is, IMO, very inneficient. I don't even participate. If someone has an offer, counter offer, final offer, etc., PUT IT IN WRITING and I may be able to do something with it.

Lazy negotiation is a disservice to buyers and sellers.

Apr 24, 2008 11:34 PM

Kim Tavares

Legend Residential Sales LLC - Dix Hills, NY

e-PRO - Long Island, NY

good advice Barry...I think you just have to feel the players out in the negotiations - some need the breathing room to mull things over, and some you do need to stay on top off.

Apr 24, 2008 11:37 PM

Chris Griffith

Downing-Frye Realty, Bonita Springs, FL - Bonita Springs, FL

Bonita Springs Listing Specialist - Agent

I am all for having every offer and counter offer in writing, too. Plus, I've seen those "not a penny over/under" statements be fibs. Ride that pony til it dies is my theory.

Apr 24, 2008 11:39 PM

Gary McAdams

GMAC Schwartz Property Sales - Key West, FL

If I had a penny for every time I have heard "This is my final offer" I would be quite rich. It's funny how that changes when it is presented in writing.

Apr 24, 2008 11:43 PM

Stanton Homes

Stanton Homes - New Home Builder - Raleigh, NC

Design/Build Custom Home Builder in North Carolina

Barry - great post. Verbal negotiations do have their place, especially in new construction when there can be a dozen different items that are being negotiated. We often have a combination of verbal and written counters.

Apr 24, 2008 11:44 PM

Neal Bloom

Brokered by eXp Realty LLC - Weston, FL

Realtor CRS-Weston FL Real Estate

Everything should be in writing regardless or another buyer can come right in and swoop in like a ninja and make a better offer and the seller could grab it and that buyer #1 loses. I've seen the final offer writen on contracts and that's fine...at least the seller knows if they aren't interested then they can move on. I would always leave things open to renegotiation if the parties agree to. Sometimes emotion takes over though.

Apr 24, 2008 11:45 PM

Konnie Mac McCarthy

MacNificent Properties, LLC - Cobb Island, MD

Broker/Owner - VA & MD "Time To Get A Move On!"

I have found the minute people introdue their egos into a negotiation.....things get hairy....the trick it how to get them to move their egos aside...and do business.

Apr 24, 2008 11:46 PM

Nancy Brenner

Referral Associates of Georgia, Inc. - Roswell, GA

Roswell Georgia Real Estate Agent

I love the Negotiation Dance. I do, however, make sure that all is in writing - even if it's in the form of an email to the other agent.

Apr 25, 2008 12:03 AM

Sara Homan

Coldwell Banker Ellison Realty 352-209-4044 - Ocala, FL

Realtor, Homes, Farms & 55+

Negotiation is a game that has to be played with finesse. Everybody is different in what they will entertain and in what form. I have seen buyers go higher than they wanted and sellers go lower than they wanted, but you just never know until you push the buttons!

Last year I negotiated a deal where the house had been on the market for 10+ months, priced at $575k and only a $5,000 price change. The sellers were up north so I requested to present my offer over the phone. I can convey my buyer's case, the listing agent has no relationship with them, therefore it is in our best interest that I get my finger on the pulse with the sellers and see where we can go myself. My buyers were at $425k which was only $50-$75k off where the house should have sold yet we had a $150k gap. I had the hutspa to try to close it. We went back and forth 7 times !!! At the end we were $25k off and the buyer just couldn't move. I told the listing agent, Thank you for the time you gave to this deal and please thank Mr & Mrs Seller, but would you do me one last favor, would you ask them to please reconsider the $500k again. An hour later I got the call...They'll take it but it is "as is" and you have to cut your commission 1% Now I have to negotiate with the agent!!! I said let me check with my broker I DON'T CUT COMMISSIONS! I called him back and said "My broker said absolutely not" They cut their side and I got paid.

Debate "in writing", verbal offers etc but it is all about feeling people out and keeping the right attitude. Getting defensive and nasty will kill a deal quicker than rat poison!

Apr 25, 2008 12:18 AM

June Piper-Brandon

Coldwell Banker Realty - Columbia, MD

Creating Generational Wealth Through Homeownership

Barry, well written. I love the negotiation process myself. The trick is to make your contract as attractive as possible without giving too much. I am going to settlement today with a couple that also loved to dance and the seller got 5 contracts the first weekend the house was on the market. In the end my couple won because of the terms of the contract rather than the price. And, Sunday they will be moving in to their new home and starting a family in August.

Apr 25, 2008 12:19 AM

Anonymous

Barry Owen

Goodness . . . Seems this was an itch that needed scratching :-)

Lots of comments here about written vs Verbal . . . I'm not sure how that came to be because my post was not as much about the form of negotiation as it was about the "essence and flow" of it.

I, too, am a believer in WRITTEN ONLY - I blogged about that a few posts ago.

Perhaps, when I used the word "Conversation" it was construed to be all verbal . . . so my clarification is that I advocate TALKING (Verbally) AND supporting (documenting) any conclusions or counter-offers in WRITING.

I see many negotiations go weird because the agents are attempting to get it done exclusively through email and/or text messaging. I believe those means of communication are too shallow (one dimensional) to be as effective as verbal or face-to-face . . .

So my bottom line is that there really is no agreement unless and until it is in writing . . . and that it is essential to document each step along the way.

Hmmm . . . I think I need more coffee - I think I am talking in circles,

Best,

Apr 25, 2008 01:33 AM

#11

Lesley Lambert

Park Square Realty serving Western MA - Westfield, MA

Real Estate Agent - Realtor - Westfield, MA - 413-

I couldn't agree more. Oftentimes each side just has to feel that they "won" something and that is our job to figure out what we can "give" in the negotiations. Giving people time and space to consider their choices works great, too.

Apr 25, 2008 02:34 AM

Cliff Collipriest

Keller Williams Realty/Coastal Valley - Santa Maria, CA

Making dreams come true one home at a time!

I would agree that the negotiations process is one of the more enjoyable parts of the real estate business, and it is our job to do everything we can to make a deal work. I was very pleased that I was able to close every deal I had last year. I wish I could say the same for this year. It seems last year buyers and sellers wanted to make things happen, this year I am seeing much more of the buyers saying "I'll buy if I can steal it". It's a buyers market, they know it and want to play hardball. I been on both side of this fence, having buyers who will not come close to a reasonable market price offer and seen sellers get offers that we down right insulting. This years buyer mentality is a bit brutal. But that's the market.

I also feel verbal negotiations can be very efficient in the right circumstances. If a buyer wants to submit a very low offer a simple phone call to the seller or their agent can be an easy way to find out if there is any common ground between parties with which to make a written offer. I prefer written offers as they are more concrete and suggest the parties are more serious, but verbal negotiations in the early stages can be very usefull.

Apr 27, 2008 06:34 AM