Nov
27
You know the old saying, don’t go to the restroom during a meeting or you will be appointed to chair a committee or fundraiser by the time you return. Well, this is kind of the same but different. I feel like I left an office meeting and someone came in and told everyone to write the lowest low ball offers you can dream up! Mind you I’m not actually complaining, at least there are Buyers willing to get off the fence, I just wonder how many of them are real Buyers that will step up to the plate when tested. I have had two of the sort in the last couple weeks on listings of mine. One we did get worked out and the other we scared away with our first counter, thus begging the question, is he a real Buyer? Do Buyers just expect to bring the Sellers down dramatically in the first counter and how many counter offers should it take to get a deal worked out? Better yet, if a Seller does come down significantly in the first couple counters, does it affect the value of the property to the Buyer? In other words, is six counter offers enough to make the Buyer feel like they got a good deal and the house is worthy of the price? Or do you run the risk of scaring the potential Buyer off by not making it too easy. I had both situations but in opposite price ranges with the offers I was representing the Sellers for.
The offer we did get worked out was offered at almost $2.3M, had been on the market a relatively short period of time (about 90 days when we received the offer) and took six counter offers but even then the Buyer wasn’t satisfied thus we ended up then fighting over the potted plants in the rear courtyard.
The other offer was on a property in a lower end market on the Monterey Peninsula (asking $579,000), was listed in access of six months and had been reduced almost $100k in that time frame. This is the one we scared off unintentionally but frankly I wasn’t surprised.
I think the difference is the market segmentation that is going on. The high end in our area is still going strong. In one case you have the President of a company playing a cat and mouse game to see where he could get, but still wanting to buy the house. In the other case, you have someone trying to see where the truly desperate and motivated Sellers were so he could get more for the money. When it didn’t work he moved on quickly.
My point is this, when people tell you who they are…listen! Know who you are dealing with in each negotiation. Diagram the negotiation to see where it will go and how many counters it will take. Prepare the other agent to keep the ball rolling. Decide if you think the other agent can manage the negotiation on their end if they have a difficult client and always present offers and counter offers! This allows you to feed the other party the information you want without depending on the other agent to deliver the message in the manner you want it delivered in. In this market especially you have to show up to win!
Buyers, Sellers, Listing Agents, Buyers’ Agents…everyone is learning the rules of the current real estate market …and lets not forget lenders and appraisers. It does not matter whether you are selling, buying or participating in real estate as an agent, lender or otherwise, this is an exciting and challenging time.
Very true!