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.