The Price to Pay for Getting What You Want in Negotiations

By
Real Estate Agent with Long and Foster REALTORS®, Gainesville, VA VA License # 0225089470

The Price to Pay for Getting What You Want in Negotiations

With seventy-five percent of my business coming from the sale of listings, I am usually counseling sellers.  And in the seller's market conditions that the Bristow-Gainesville market has been experiencing, the words of wisdom after buyers compete in a multiple offer situation is this:

 

THERE IS A PRICE TO PAY FOR GETTING WHAT YOU WANT

 

What seller doesn't want multiple offers and buyers fighting over their property?  It drives up the price and that makes sellers happy.....until they enter the second phase of negotiatons at home inspection.  This is where sellers learn the price to pay for getting a premium price for the house.  Buyers request just about everything in the home inspection that they want fixed.  Laundry lists of repairs come across.  Buyer's agents will say, "For the price they are paying, they expect this stuff done."  And so it goes in a seller's market in Bristow-Gainesville.

Now the market is changing, particularly in the upper price ranges.  A four bedroom single family home with a two car garage is not likely to be snapped up in a matter of days.  No.  More like a matter of two to three weeks.  Still fast, but there aren't multiple buyers competing.  A seller waiting two to three weeks for an offer will feel a sense of urgency to accept whatever they get.  Of course, my job as a listing agent is to make sure they don't give too much.  Keeping an eye on market trends is important.

As the market turns and buyers come in beating down prices and asking for much higher amounts in seller subsidy (closing cost assistance,) the tables have turned.  Despite a negotiation strategy that comes out in the phrase muttered time after time by buyer's agents, "If you don't do this, the buyers are walking," these buyers are now learning the price to pay for getting exactly what they wanted before contract acceptance.  Sellers are calling their bluff.  

Take for instance the buyer who insisted they get over $15,000 in price reduction and seller subsidy for a single family home in great condition.  They got three times the amount of closing cost help that the average buyer in the neighborhood got.  Yet, they send over the home inspection report and request in one line in a contingency removal addendum, "Everything in the inspection report needs to be fixed."  They even asked for a radon remediation system when radon levels came in below the EPA acceptable limit!  And then the all too present negotiation strategy of the moment, "Do it or we are walking."

The sellers had already felt bent over a barrel.  They looked at the list, found two actual problems and countered fixing just those and not the nine other nickel and dime issues or updates to the home.  "Go ahead and walk.  For the over $15,000 you got in concessions, we aren't renovating or improving the house for you."

There is a price to pay for getting what you want in up front contract negotiations.  If a sales contract strongly favors one side, the other is likely to prevail in home inspection negotiations.  It was a tough lesson for the buyer in the scenario described above.  And it was nice to teach that lesson to a buyer's agent, when normally I'm having that conversation with a seller who looks like the cat that ate the canary. 

Ultimately, for a deal to make it to closing, it has to work for all parties.  If a buyer wants to  threaten repeatedly that they are walking if a seller doesn't do this, that and another thing....eventually the seller is going to call their bluff.  Successful transactions have both parties feeling they have gained something, and frankly, lost something.  

 

 

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Rainmaker
2,781,403
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Sometimes you have to go high first to get to where you want to go.So good and even great

Oct 05, 2019 10:42 PM #15
Rainmaker
2,781,403
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher

Seems like you know what you’re doing . Love and light and everything that goes with it

Oct 05, 2019 10:44 PM #16
Rainmaker
193,516
John Henry, Florida Architect
John Henry Masterworks Design International, Inc. - Orlando, FL
Residential Architect, Luxury Custom Home Design

Great read on how the negotiation process works in a buyer vs. seller market.  Thanks very much!

Oct 06, 2019 05:44 AM #17
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Liz and Bill Spear
RE/MAX Elite 513.520.5305 www.LizTour.com - Mason, OH
RE/MAX Elite Warren County OH (Cincinnati/Dayton)

Our local market has (mostly) been more balanced.  Not a fan of the "take it or leave it" approaches unless I know my side is truly holding all the cards.  I've always figured a deal where both sides are happy or both sides are equally unhappy is a fair deal.  Bill

Oct 06, 2019 06:20 AM #18
Rainmaker
2,474,232
Richie Alan Naggar
people first...then business Ran Right Realty - Riverside, CA
agent & author

What all agents experience but don't spend time dissecting is how when you give someone wealth or power who they are really comes out....

Oct 06, 2019 06:26 AM #19
Rainmaker
3,037,469
Scott Godzyk
Godzyk Real Estate Services - Manchester, NH
One of the Manchester NH's area Leading Agents

Congratulations on the feature Chris Ann Cleland . I am seeing a similar trend here as well. I like to explain this to my sellers before we start showings and often again when we get offers, it keeps that surpise from killing a del when it is asked for by a buyer

Oct 06, 2019 01:22 PM #20
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

There is true negotiation between seller and buyer, and there is the "I win, you lose" mentality which doesn't generally work.

Oct 06, 2019 08:25 PM #21
Rainmaker
211,010
L. Scott Ferguson
Ask4Ferguson - Your House-SOLD Name in Real Estate - West Palm Beach, FL
Sunny Florida Real Estate Professional

Agreed on your last point.  There is a balance and in the end I've noticed that what transpired was what I thought was going to happen at the beginning.  It just took a few twists and turns to get there. :)

 

Great post!

 

Blessings!

Oct 07, 2019 05:00 AM #22
Rainmaker
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Kat Palmiotti
406-270-3667, kat@thehousekat.com, Broker, Blackstone Realty Group - brokered by eXp Realty - Kalispell, MT
The House Kat

"Do it or we walk" can kill a deal, even if the "it" really should be done. If a buyer makes a reasonable request for repairs, and the seller responds just as reasonably, the deal can move forward. 

Oct 07, 2019 05:42 AM #23
Rainmaker
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Patricia Feager, MBA, CRS, GRI,MRP
DFW FINE PROPERTIES - Fort Worth, TX
Selling Homes Changing Lives

Chris Ann Cleland 

I haven't heard agents or sellers say "take it or leave it." I do believe in treating all people fairly and the Golden Rule. It's obvious to me, you're the expert in your area and provide good information to your sellers. 

Congratulations on your feature! 

Oct 07, 2019 04:20 PM #24
Rainmaker
795,780
Nick Vandekar, 610-203-4543
Long & Foster Real Estate Inc 610-225-7400 - Devon, PA
Tredyffrin Easttown Realtor, Philly Main Line

Very good points, at some point both sides need to consider the other side, or one of them will walk.  Another well deserved feature.

Oct 08, 2019 02:20 PM #25
Rainer
2,630
Nancy Haynes
Tropic Shores Realty, LLC - Spring Hill, FL

Here in FL, most agents use the "as is" residential contract. This became the trend during the market crash. A tremendous amount of sales were "bank owned" and all their contracts are "as is". Private sellers soon caught on, and it has beecome very popular. In some cases, generally if it's something that would prevent financing or insuring, a seller is willing to fix. Or, sometimes, if the buyers are really nice people, sellers tend to be willing to fix more things, even though they are not required to by contract.  Y'all should use the "as is" in your market, unless it's illegal.

Oct 08, 2019 06:28 PM #26
Rainer
51,996
Jim Whatley
Uber Realty - Fort Walton Beach, FL

From the newer "True Grit" Movie.. Mattie Ross: You must pay for everything in this world, one way or another. There is nothin' free except the grace of God.Dec 22, 2010

 

Oct 08, 2019 06:37 PM #27
Rainer
94,466
Marilyn Holda-Fleck
Coldwell Banker Residential Broker - Westfield, NJ
Personal service for each and every Customer

This was very well written -- and tries to show things from both sides of the table.

Oct 08, 2019 06:41 PM #28
Rainmaker
1,550,787
Marte Cliff
Marte Cliff Copywriting - Priest River, ID
Your real estate writer

It seems to me that balance is the key to success in most things in life.

Oct 08, 2019 09:11 PM #29
Rainer
9,225
Robert Buys Houses DFW
Robert Buys Houses DFW - Dallas, TX
We Buy Houses Fast in Dallas-Fort Worth

These same negotiation tactics are now starting to take place in the Investor realm, when buying a house. With so many investor buyers, most will bid higher until the bottom falls out.

 

I stay away from these real estate bid-wars, such as auctions and house showings where multiple investors make offers that we all know will not bring the profits we want.

 

Change is on it's way in soon.

 

Much Apprciated

 

Robert Hernandez

https://www.robertbuyshousesdfw.com

Oct 09, 2019 04:11 AM #30
Rainer
15,960
Connie Martin
San Jose, CA

Negotiations start before you ever take the listing and certainly before it goes on MLS. I recommend my seller get all inspections, Termite, Home and Roof, UP FRONT prior to any offers. We send the inspections out with all the other disclosures and let the buyer know to make their offer accordingly.  This really cuts down on renegotiating the contract after acceptance. 

 

Oct 09, 2019 11:34 AM #31
Rainmaker
475,181
Diana Dahlberg
1 Month Realty - Pleasant Prairie, WI
Real Estate in Kenosha, WI since 1994 262-308-3563

Great Featured Post!  I believe in the Win-Win scenario and like to deal with as many details "before" the inspection so everyone is on the same page.  But there are those moments!  Caveat Emptor

Oct 09, 2019 12:33 PM #32
Rainmaker
525,830
Mary Hutchison, SRES, ABR
Better Homes and Gardens Real Estate-Kansas City Homes - Kansas City, MO
Experienced Agent in Kansas City Metro area

I've been in the same situation.  I tell sellers BEFORE the listing goes into MLS: if I expect there will be multiple offers over list price--the buyers will expect a lot of repairs!  Just makes sense to discuss all scenerios up front.

Oct 09, 2019 03:21 PM #33
Rainmaker
380,816
M.C. Dwyer
Century 21 Showcase REALTORs - Felton, CA
Santa Cruz Mountains Property Specialist

I enjoyed reading how your market is changing and loved your conclusion - for the deal to work, everyone has to feel like they got something, yet likely lost something too.

Oct 12, 2019 04:06 PM #34
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Chris Ann Cleland

Associate Broker, Bristow, VA
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