Negotiating the Offer

My heart is beating a little faster. A properrty has been on the market for 66 days when an offer comes in. The buyer is respresented by a Realtor I respect. I go over the offer again and again, it is within 5% of the asking price, flexible closing date, no mortgage contingency. I present the offer to the seller; they are expressionless, not happy or relieved. They reject the offer there is no counter.

To say I am dumbfounded is an understatement. What went wrong, what am I missing? This should have been a sale. The sellers had purchased in 2005, had outgrown the house after the wife had triplets, were moving back to California, but renovated above fair market value for this house. There was some discussion about this at the lisitng presentation, but no red flags. The sellers realized that a buyer may not value their renovations as much as they did. I gave a lsiting range, they wanted a higher price, so we went over the comps, considered market conditions and disicussed consequences of overpricing. They went with the absolute highest price I thought possible and told them so. The property was in a great location and it was in excellent condition. The sellers found a property they wanted to purchase.

There was excellent activity in the first few weeks, after that showings were sporadic. A few second showings, but no offers. We had the “talk” about price reductions sooner rather than later, but suddenly they were firm on their price. The sellers decided that houses just weren’t selling at all so why lower. I provided enough graphs and charts to make any accountant happy, along with 3 competing properties that 3 different buyers chose over their house. Houses are selling.

We never really know what goes on in someone’s mind. Brokers have to review the goals and objectives with sellers during the course of a listing. Life is fluid, motivation changes. Markets reflect new lisings coming on and going off the market. I give my sellers verbal feedback after every showing and a written review weekly or semi weekly. What happened?…they found another house, were negotiating on that house. Those negotiations I was not privvy to, but from what they told me they didn’t feel represented.

When I presented the offer to them, the sellers evaluated the offer based on their current goals and objectives. This offer was being clouded by what was happening in California. I went home around 10:00 pm unsure, ranting to myself. In the meantime I had to tell another broker that my client would not be countering her clients offer (at this moment), she was not happy and her clients wouldn’t be either. Since we had until 2 pm the next day I asked her not to mention this to her client yet.

I woke up resolved to make this happen. I went over to see the sellers around noon and determined that they really did want to sell. I spoke with the agent in California and tried to keep that deal moving forward and convinced my sellers to counter this offer. The buyers countered the counter and the sellers countered the counter counter but in the end it all worked out well.

A successful real estate negotiation begins before there is an offer. If all the pieces are in place, including motivation, competitively priced properties, a market sensitive seller, you know the outcome. Just make sure your seller has a place to move.

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