-Learning The Fine Art Of Asking-
What A 1st-Time Buyer Taught Me
My Mom always told me, "If you don't ask, you don't get". And during a new construction negotiation, I was reminded of this by my buyers. I would also be schooled to not always form preconceived expectations according to market conditions - in other words, just because the market was strong and builders were pretty much ruling the roost, didn't mean that one couldn't, or shouldn't, challenge prevailing trends and accepted practices.
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So here's what happened in a nutshell:
My buyers had been referred to me. They were from India. I had been cultivating this niche because I LOVED their genuiness, and their intelligence. I knew that they in turn appreciated my knowledge and love of real estate. I took special pride in continued referrals from this base. Most of the time, the husbands, as engineers, had been relocated to our high-tech area. The wives usually did not work but kept busy with kids at home and being active in the community.
We were in the throes of negotiating the particulars of their home to be built when they asked me to ask the builder to include a finished room over the garage. I scoffed a bit and let them know that there was no way the builder was ever going to do that, especially in light of already lowering his price and including/doing every previous demand buyers had made. I felt that it was sort of like the builder had given an inch and now they wanted a mile.
My buyers said they were disappointed that it seemed I wasn't working in their best interests. They questioned my loyalties and fiduciary responsibilities. THAT made me wake up!
I mean, here I was talking a good talk about the value of me as a Buyer Agent, especially to protect them from any potentially unscrupulous and/or money-grubbing builders, yet, here I was, leading them like a fatted calf to the slaughter.
I didn't know the seller, didn't know him from Adam. Even more, how could I possibly know his motivations or what he would, could, or should accept? I always counseled buyers to negotiate within their comfort level, to do what was best, first and foremost, for themselves because, just as in this case, there was no way to ever fully know, feel, or understand the seller's side, so only worry about themselves and their needs, wants, and desires.
I had always felt that there were some buyers who fussed themselves into a tizzy worrying about what the seller might think or if the seller would be mad or if the seller would do this or that...who knows? Who CARES? Put down to paper what's best for you and then we'll negotiate (we'd hope) to a win-win for everyone.
Yes, yes, I know, sometimes in a seriously lopsided market - a strong buyer's or seller's market, we sometimes have to cushion our greatest wishes with a large dose of reality. And, that's what I thought I was doing when I told my clients that to ask for such a huge concession was silly and a wee-bit insulting to the builder.
But I dutifully relayed to the seller's agent (who also happened to be his fiancee). She said "No Way", but I reminded her of our duties to submit ALL offers and requests.
Lo and Behold! A few hours later, agent called me to say builder would be willing to split the $25,500 to finish room.
I was floored.
Then I remembered my Mom's age-old adage "You don't ask, you don't get". Here were relative newcomers to our community. They weren't buying-in to builder's usual strong-arm tactics. They had nothing to lose, and, coming from a culture where negotiations were expected, they naturally were going to ask for the moon PLUS a few other minor planets.
To which I said, why not?
One lesson I ALWAYS tried to impress on buyers - decide what you feel property is worth to YOU (I'm not going to give an opinion because 1. I already have a home and 2. Doesn't matter what I think. Our likes and dislikes may be so different that you may think a home is gorgeous and I'd think it should be burned to the ground!) Now, would I generate a CMA to gauge if home's listed price was in market range? Might. But, gotta' be careful of that practice, too. (I'll go into why in another blog).
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So, back to our example:
If a property was listed at $100,000 and buyers felt it was worth $110,000, then they were golden!
If they felt it was worth only $90,000, now we had a problem and we'd have to negotiate by coming in below that, in order, thru the process of negotiations, to end up at, or near $90,000
With this caveat - remember it's not always about price! (another complete blog discussion for later!)
One could offer $90,000 but with added stipulations, say a move-in date in 2 weeks. Something like that could have real value for someone who needed to sell before buying another home but wouldn't be a strong negotiating point for Grandma who had lived in home for 101 years and couldn't vacate so quickly!
My point? Buyers need to be realistic but remain true to their dreams. My job IS to educate them to market conditions while realizing that every seller's situation is different. We always need to ask, and without asking, without negotiating free of restrictive, preconceived, market based "reality", we're not really acting in our buyer's best interest.
To this day I remember the lessons I learned from that transaction and thank my lucky stars I got the opportunity to learn them from two such lovely and gracious people.