For the sake of Negotiating..... Lessons of Feet Dragging - yes, even in a Buyer's Market.
So, I've experienced the Lessons of Feet Dragging, Negotiating and Dragging just for the sake of Negotiating. It is not fun to witness buyers wanting to haggle just for the sake of haggling.
In the end, when the counter offer is not accepted and a new offer is introduced into the picture, it would be very disappointing when you lose the house, the house you've been talking about and the house you've been spending your time visualizing in.
So many times I wonder why buyers cant be serious? What could $2,000 mean in a $200K transaction or better yet, $2000 in a $500K transaction? Is it worth haggling?
ABSOLUTELY NOT! After evaluating the pros and cons of going back to the sellers for a tiny pricehaggle, in the grand scheme of things, it will not make a small pinch in the monthly payment,
WHY OH WHY DO YOU RISK ANOTHER OFFER COMING INTO THE PICTURE?
Do you know until it's signed and executed, you - the buyer is still vulnerable and that you have not secured anything yet.
And agents, don't come back to tell me how your clients will now pay the price they originally agreed on. It may be too late. The seller may have signed and executed the other offer. The seller may be upset about the haggle, the seller wants to deal with the other non-haggling buyer.
I've personally experienced 2 back-to-back negotiations where buyers lost because of Negotiation for the sake of Haggling.
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Content & Photography Copyright © 2012 by Loreena Yeo (3:16 team REALTY)
For the Sake of Negotiating... Oh How Much Fun It Is to Ride
Heading into the spring markets you really dont want to mess around you will lose the house.
No deal is deal until both parties signs the contract. In Manhattan New York, that leaves a window of time period that the seller can entertain another offer and accept another buyer.
Loreena....some buyers need to learn the hard way.....nothing's easy, is it???
Loreena - Thankfully I haven't been involved in one of these situations for a few years now.
Loreena, buyers in today's market keep thinking they can steal a deal and seller will do anything not to lose the buyer, unfortunately some of the buyers have to face some hard wake up calls.....often it is too late to go back.
It always amazes me when buyers (or sellers) let "game play" over-ride everyone's goal. If you want the house, let's get the house! As you've mentioned, 2k over the course of 30 yrs (or even 15) means the difference between 1 fast food meal per month... (that's just my guess, not a true eval but you get the point!). Thanks for a great post!
Loreena
Some simply need to haggle no matter what, and perhaps learn the hard way that it does not often work, espeically in a competitive market and for a great buy.
Jeff
I am dealing with that now and it is no fun. I have a buyer that knew he wanted the house, but he rejected an offer when it was his over a $1000. Now we are going to present another offer on the same house, and in this case it's just the way the buyer operates. All we can do is give it our best shot and advice our buyers.
I have been the listing agent TWICE in the past few months where the buyers agent screwed up in negotiating, and hesitated. Meanwhile I second offer came in and that 2nd buyer got the deal.
Loreena,
As you know buyers get overly excited and without remedy when a new Offer comes along. frequently it's for less money, because the seller is annoyed with them.
Brian
Buyer are always thinking if they could get a better deal. The deal is the deal. You snooze you loose.
Hi Loreena,
Thank you for this, I am reblogging. Would have suggested if it weren't a done deal... I keep telling people NOT to do this and they keep NOT listening to me. Buyers are just crazy right now. In NY I've $1 million deals where people dig their heels in over $5000. Seriously???
Also, lowballs don't work on short sales in prime condition in prime locations. Does anyone seriously thinkg that they are going take on a big bank and WIN???? Seriously???
Loreena if I were near, I would hug you for this post. You are my sista for real. The chump change is just not worth losing a home that the buyer really wants.
Buyers are always under the impression they can low ball every deal. If there Realtor doesn't educate them ahead of time, they will make mistakes that cost them a deal or make the deal a living nightmare.
Thanks to Lenn for reblogging this post...I have seen buyers haggle just for the sake of negotiating.
Not too long ago a verbal counter offer was negotiated late at night. We needed a final signature. The buyer waited until later the next day to tell us he was going to negotiate just a bit more. He lost the house! They called every day, until closing, to see if they had a chance
Margaret
This is so tough as a buyers agent to convey this to buyers. I have to tell buyers that they need to offer what they want to pay for the house and where they would not be disappointed and regret if another offer came in and got their offer accepted instead. Sometimes buyers just think we want them to offer full price to get the job done and that maybe we aren't negotiated well, but part of our job is to actually get our buyers the home that they want, and if we don't advise them they will also be upset if they lose the house. I'm going to reblog this because this happens quite often in my market, which actually is NOT a buyers market, though many seem to still think it is. -Kasey
So frustrating to watch your clients learn the hard way....
When a buyer is not sure just how much to offer, I always ask, "how upset would you be if you lost the house to someone else?" If the answer is "very upset" then they need to stop haggling and come up in price. Some people just can't seem to stop, though and ruin a deal over the littlest thing.
Just this week somebody in my team, suggested to the buyer not to offer below $550000 as it is in a multiple offer scenario, NO WAY, he said. he offered $535,000. Next day, the status changed to Pending Sale, and we were not it. Now he is willing to go over the listed price of $560,000. Hopefully next house he likes, it will be easier to convince him, I guess !
Loreena - When you consider the cost of a loan currently is around $5 per $1000, it really makes no sense especially if it's a house you really want, but people insist on it sometimes any way.
It's either haggle or buy a home. I notice when a buyer starts haggling on one issue, they'll haggle on just one more thing. I recommend sellers to lose these types of buyers who want to negotiate just for its sake. There's no end to it, and it's nail biting all the way to close of escrow. Find a buyer who wants to buy!
Loreena - I am in the middle of one of these negotiations! These buyers need some serious guidance from their agent,
Sometimes buyers just get a number in their head that is "ALL" they are gonna pay.
Tammy's comment is all too right, if they just need a nudge! :)
Congrats on the feature! You make a great point. There is a time to negotiate and a time not to. Thanks for sharing and have a great week.
I've got two buyer clients right now that are acting like this. One set, just simply REFUSE to pay any more than $300,000, for any house, even if the Seller will sell at $300,001. Makes no sense!
The other clients are clearly on the warpath for a Personal Win, not a house. You know what I mean? They might end up losing their PERFECT house, or may buy something not quite so right, as long as they feel they won the negotiations at the expense of the Seller.
Argh! They've missed the forest for the trees.
I try to get buyers to re-evaluate the property.. that is if this property meets 99% of their wants and needs, how would they feel if they lost the property for X$... This usually works....
I have to agree with Luis #14 and Pam #22, Yes the the Buyer's agent has a duty to help their client purchase at the best possible fair deal. However, base on market values they should also inform their client if the property is priced to sell and that unnecessay haggling could cause them to lose out on an opportunity to purchase.
Loreena
A buyer or selling can kill and sale by hagging for the purpose of hagging.
Good luck and success.
Lou Ludwig
Loreena,
Great point!
It's going to get worse.
Consumer's real estate eduction now comes almost exclusively from TV.
Bill
It's so unfortunate when buyers don't take our counsel and lose a house they love. Especially, when the difference may just be 1% of the purchase price.
Loreena, it must be somethng in the DNA. Even after I've proven that they're ahead on the deal, I still have buyers that want to squeeze out even more; it's frustrating.
Some people will not negotiate for a cent over their "bottom line" price. In many cases, those buyers lose the property to another buyer who is better in negotiating and sees the value of the property.
Loreena, this is so painful - and unnecessary. Some people just can't see the big picture. We have to help them to see it.
Sharon
In a turning market like we are in now, this is the buyers stuck in the "buyer's market" mentality, and the market in an "equilibrium" or even a "sellers market" depending on months of supply. If they are willing to lose the home over $2,000, then you have to chalk it up to an educational experience.
Hi Loreena, so true. It is just not worth taking the chance, not if they really like the house. Great post.
It because those buyers think they are the only ones out their right now. The market is picking up and the consumer doesn't see that yet.
Thought provoking for our clients...
This is in interesting point. During our office meeting in January, we were asked how many of us had already experienced multiple contracts on our listings. In a packed room of agents, half of us raised our hands. Good news to start the New Year.
loreena, it is just so true ...i had one last week who just would not understand until they lost the house yesterday that a few thousand does not make a difference over 15 or 30 years...because mine is a buyers market they still keep thinking that multi bids do not happen....all of my last 4 closings have been multi bids...if it is worth pay for it.
I've noticed some clients have a competitive streak .. like to have the last word. By negotiating over very small amounts it really sets a poor tone for the repair negotiation, etc. Risks .. lots of them. As a representative you have to watch that your client doesn't feel you are working for the other party's interest with the wrong impression of recommendations you make and trying to caution over such silly tactics. When they lose out you just refrain from the I told you so and hopefully lesson learned.
It may be a buyers' market, but sellers have their tolerance limit. The buyers that seem to need to prove their negotiating prowess or to "get just a little more" are starting to lose out because sellers are tired of feeling like they have their backs against a wall. Some folks are their own worst enemy, and it can be a frustrating process to find yourself in the middle of.
Oh my. Am dealing with a couple of these right now. Some people just feel they have to win. Nuts.
Loreena, some buyers are just really focused on the price. We just have to prepare them before going into negotiations that this might happen and they'll need to decide to walk away. Playing games in a serious situation is never good. Thanks for the post!
Loreena, I'm from the old school where successful negotiations means a win-win. Some people think they don't win unless they come out ahead and get one over on the other. Negotiating is good, haggling is not.
I can be simply amazing how short sighted some home buyers are. I ask buyers how upset they would be if they lost the home to another buyer over $2,000? Most of the time, they say very upset and then it's usually pretty easy to convince them in the error of their thinking. Sorry you're dealing with this right now. Fortunatly I haven't had this problem pop up in quite a while.
Loreena - in this economy I think there will be more haggling and penny pinching than ever before.
It's good that there are great agents like you out there helping to educate others in local markets that often times it's a waste of time and energy. Buyers also have a big concern that something better might come along and at a better price and therefore have a touch time committing and taking the plunge.
They need YOU to show them the way and the ropes. Great to know that there are people like you out there willing to take the time to educate them and then help them through the home buying and home selling process.
Keep up the great work, I'm sure your clients and those about to be your clients really appreciate it!
As Barbara points out..there are some lesson in life that come with a premium...
buying a home definitely isnt easy...so many people dont realize this! They definitely dont want to mess around in the upcoming spring market.
When I encounter such buyers, I don't insist the 1st time. Once they lose out on the house, which they pretended wasn't of so much interest initially, they then frantically beg me to change the outcome because they really, really want it.
The 2nd time around, they are usually on board with my advice, if not, I just suggest we part ways. My last buyers that did just that, have missed out on 3 more homes since November, with their 3rd agent.
Some people never learn.....others do.
Loreena, buyers often lose the first house they want because they are listening to everyone but their agent. The second house, the tend to listen to their agent. (Or, as Anthony says, find another agent.)
Loreena...it is so true. Usually I tell them to focus on the monthly payment - a couple of thousand over the course of a 30 year loan is not that much more per month. Of course, if the Seller is refusing to budge at all & the buyer has come up a great deal, buyers will sometimes dig in their heels.
A very hard lesson to learn. I agree with what Christine said above. HOpe you are doin gwell!
Hi Loreena, I suspect that for many the idea of haggling is a little bit like " beauty ". It is in the eye of the beholder and varies from case to case. What is haggling to me may be risky and annoying to you. A smart buyer/seller knows how to stay focused on the big issues.
The $2,000 in a $500K transaction borderlines on craziness, but never but craziness past people Loreena, as they will do it. Some people just get stubborn.
its just a personality thing that you cant control
I think buyers and sellers start to take negotiaions personally as it gets down to the wire. Their pride often gets in the way of good business sense. It's in all of us, but we see it more often in our line of work.
My rule of thumb with buyers is that they shouldn't waste time when the offer and asking price are within 1% of each other. During negotiations, if we're within 1%, it's time to stop haggling and just get it done.
Loreena,
The low interest rates eradicate any haggling over a few thousand dollars. We agree with this assessment... g
This is so true, it amounts to less than $25/mo in the loan! People HAVE to win though!
I just had a listing agent contact me today because her seller backed out of the contract with the other buyer. She was calling to see if we wanted back in the picture. My buyers didn't submit their offer when they found out it was multiple offers to deal with. The buyers asked for 10 too many things, and now the seller wants to play with someone else.
Loreena, too many buyers are reading the doom and gloom reports in the paper, then they get the old shockerooo!
I have been on both sides of this issue. For many, it is the thrill of the 'win.' I try to explain in a true negotiation both parties must feel like they 'won.' Too often the competitive nature of the clients that I work with comes out and they cannot get their heads around how very little that $2,000 (or $500 or $5,000) means over the course of 30 years! I have had a number of clients miss out on the right house because they were stubborn.