Mistakes sellers make that could cost them a sale and/or money

By
Real Estate Broker/Owner with Cornerstone Business Group Inc 0225086119
https://activerain.com/droplet/49vC

There are a lot of mistakes sellers make that could cost them a sale, but I had a unique one a few years ago that not only cost a sale multiple times for my seller, but it also cost him $28000. The house was a simple plain vanilla ranch house. The local market was just in the beginnings of the 2008 market plunge. So, the comps on his house came in at the pre-plunge prices, and it was a pretty nice range.

We listed at $140000. Immediately, I received an offer at $130000. Based on where the market was heading, that was an outstanding offer. The seller came back with a counter at $138000. The buyer countered at $135000. I'm yelling, "Take the money and run!" But, my seller decided that this was a game that he liked to play. He came back at $135500, and the buyer walked. He was tired of the game. He gave up a great sale for $500.

After that, it sat for nearly a year without a buyer. Finally, I talked him into dropping the price to $130000. Immediately, another buyer came by with a good offer. He offered $125000. Again, I begged the seller to take the money and run, but nooooo, the game was afoot. He came back at $128000. The buyer didn't even bother to respond. He just walked. I dropped the listing at the end of the listing period. He ultimately sold the property for $112000. His propensity to negotiate cost him $28000.

Sellers can do a great deal of harm to a sale by getting into that mindset. Everything doesn't have to be a negotiation if the offer is a good one. This is where an agent may be able to offer advice, but not always. I brought current sales to show him. I showed him where the market had gone during the listing. I showed him the difference between houses selling for more than his vanilla house, but nothing would persuade him to use good sense. He just had to negotiate. It cost him plenty. 

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Rainmaker
361,783
Jeanne Dufort
Coldwell Banker Lake Country - Madison, GA
Madison and Lake Oconee GA

Excellent post - that last counter can really be just that - the last counter that kills a potential deal.

Jan 15, 2014 10:22 PM #1
Rainmaker
703,762
Andrea Bedard
Thompson Company, REALTORS® - Silver Spring, MD
M.A.; REALTOR® Silver Spring, MD and beyond

OUCH Mike. Losing 28K because of a $500 difference is painful, not to mention the additional carrying costs. The buyer's mindset was likely such that if the seller is playing that game during negotiations, what will the transaction be like? I can't blame him.

It's tough to not get caught up in the moment sometimes but it's the bigger picture that counts.

Jan 15, 2014 10:42 PM #2
Ambassador
1,491,665
John McCormack, CRS
Albuquerque Homes Realty - Albuquerque, NM
Honesty, Integrity, Results, Experienced. HIRE Me!

Feeling your pain Mike.  Been in the same shoes and it makes one crazy when our clients won't and don't listen to us.  After all they did hire us to put our knowledge to work for them.  Yep I'd say your client paid dearly.

Jan 15, 2014 11:06 PM #3
Rainmaker
224,639
Rick Frissell
HomeXpress Realty - Valrico, FL
aka "The Red Baron of Real Estate"

OMG Mike, I think I have the same client right now.  Did your ex-client move from Virginia to Plant City, Fl and buy a house?  If so, I might be dealing with them right now!  :-(

Jan 15, 2014 11:20 PM #4
Ambassador
2,751,523
Dick Greenberg
New Paradigm Partners LLC - Fort Collins, CO
Northern Colorado Residential Real Estate

Hi Mike - Sometimes our clients get too far into the game and forget why we're there. We too have seen deals die over piddling amounts of money when one or even both sides of the deal make it a death match with only one possible winner - which usually turns out to be that everyone loses.

Jan 15, 2014 11:29 PM #5
Rainmaker
1,529,046
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

Jeanne, it was a bridge too far (for me too).

Absolutely, Andrea.

John, he did that. I doubt that he very figured it out.

I hear you, Rick. It does seem that a lot of these characters move around, doesn't it?

That sums it up, Dick. Everybody loses.

 

Jan 15, 2014 11:53 PM #6
Rainmaker
3,072,438
Will Hamm
Hamm Homes - Aurora, CO
"Where There's a Will, There's a Way!"

Hello Mike,  Sometimes people just do not want to take our advice.  Hope you are having a great day!

Jan 16, 2014 12:01 AM #7
Rainmaker
200,219
Debbie Holmes
Gold Key Real Estate - Boise, ID
Gets the job done!

Arrrg to lose a sale for $500.

Jan 16, 2014 02:23 AM #8
Rainmaker
1,405,648
Kat Palmiotti
Grand Lux Realty, Monroe NY, 914-419-0270, kat@thehousekat.com - Monroe, NY
The House Kat

Oh, that must have been frustrating!  Sometimes, buyers and sellers just won't listen to reason since they think they know what they're doing and they don't want to hear anything else.

 

Jan 16, 2014 02:52 AM #9
Rainmaker
1,529,046
Mike Cooper, GRI
Cornerstone Business Group Inc - Winchester, VA
Your Neighborhood Real Estate Sales Pro

It's a great day, Will. A closing, a listing, a new rental and I was able to help a first-time homebuyer get situated in her new place. All good stuff.

Debbie, I would have pulled my hair out if I had had more. 8-)

Kat, that's pretty much the case here. 

Jan 16, 2014 03:43 AM #10
Rainmaker
487,088
Jim Patton
209-404-0816 - Turlock, CA
Realtor - Stanislaus & Merced county Realtor.

That was a pretty expensive game that your seller was playing Mike. 

Jan 16, 2014 07:02 AM #11
Ambassador
3,673,447
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Mike, well now!  That is a costly mistake.  And I think a lot of us have stories a lot like this, unfortunately.

Jan 16, 2014 10:31 AM #12
Rainmaker
797,359
Troy Erickson AZ Realtor (602) 295-6807
Good Company Real Estate www.ChandlerRealEstate.weebly.com - Chandler, AZ
Your Chandler, Ahwatukee, and East Valley Realtor

Sometimes it's hard for a seller to take the first offer, especially if it is $10k lower than list at $140k. Hence the negotiation ensues. However, more often than not, the first offer is the best offer, and all other offers will end up being worse, especially in a stable or declining market. Only when the market is on an upswing can sellers bargain with the pricing. Normally in those instances, the seller will get multiple offers.

Feb 03, 2014 09:11 AM #13
Rainmaker
111,540
William "Bill" and Karen Farragher
EXIT Blue Water Realty, Matawan, NJ 07747 - Matawan, NJ
SFR

Mike, I hope that was a lesson the seller learned well.  Sometimes it doesn't matter how much information we give them, they always think they know it all.  Thanks for sharing. ~Karen

Feb 06, 2014 03:32 AM #14
Rainmaker
98,627
Laura Andersen
Keller Williams Realty Partners ~ 678.462.1191 agentandersen@gmail.com - Woodstock, GA
A HomeSOLD Name (678)462-1191 Woodstock, Georgia

It's always a challenge when the seller is in a situation where he obviously doesn't need to sell.  It then becomes a game with you in the middle.  You were right to drop this listing. 

Mar 16, 2014 07:29 AM #15
Ambassador
2,344,889
Fred Griffin presently on Leave of Absence
Fred Griffin Real Estate - Tallahassee, FL
Licensed Florida Real Estate Broker

   I can beat a person like this at the game of "Monopoly" in about 25 or 30 minutes. 

     Unfortunately, this is not Monopoly - it is real life.

Oct 10, 2014 01:13 PM #16
Rainmaker
196,442
Ingrid Pierson
HomeTown Realtors - Auburn, CA
Making Friends & Helping Friends with Real Estate

I've been in this position as well... What bail's me out is the Seller's Net sheet I prepare for the Seller in advance as part of my listing presentation.  First off, in my market most Realtors do not provide the Seller with this upfront estimate.

Here I include all the negotiable costs that are a normal part of the contract.     (as well as estimated pay off of loan, pro rated interest and taxes, HOA etc included)  You know... who pays what... in the example I have the Seller paying all and explain that often with a FULL PRICE purchase this is part of the negotiation.  In the case of multiple offers I provide one for each contract.

  • Benefit is that now it is not ALL about price.  It is now about terms as well.  I would rather have a negotiation over terms than price and sometimes... knowing that this is THE BEST offer... I'll pay the stumbling block $$$ and we're off to escrow.
  • Benefit is that when the property was listed... The Seller "technically agreed to $xxxx based on list price and cost of sale... Often, even with a slightly reduced price and terms my Sellers come out ahead financially and we head off to escrow. 

This is the best way I have found to avoid a no win negotiation game...

Jan 19, 2016 08:37 AM #17
Rainmaker
553,289
Peter Mohylsky, SoWal Is HOME.
PrimeSouth Properties - Santa Rosa Beach, FL
Let me help you find your path to the beach.

Great advice, I have the conversation with the other agent to determine the mind set of his client and warn that we are not interested in going back and forth several times. 

Feb 20, 2016 12:38 PM #18
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Rainmaker
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Mike Cooper, GRI

Your Neighborhood Real Estate Sales Pro
Winchester has a place for you! Call me.
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