Negotiating home prices can be an emotional experience. You may have invested your heart and soul in a home you raised your children in, or you are selling the home you grew up in after a parent’s passing. It can be a frustrating experience as well. You might make an offer for exactly the selling price, wait with bated breath to hear back from the seller, only to find out that they used your offer to get a higher than asking price offer – that they accepted without even asking if you wanted to counter. It’s too late for you to counter, because the purchase paperwork is already signed.
In the 1990s, I was negotiating a settlement with a Canadian company, and they made a settlement demand. We made an offer in response that was a lot lower than they were willing to consider. We didn’t do it to insult them, but clearly that was how they took it. “Oh, no,” they said. “We don’t do that dance that you seem to favor here — we make a demand, you make a really lowball offer, then we come down a little, and so forth. In Canada, we come to the table with the number we are willing to settle for.” I have to admit, I thought the insured’s representative was making that up. But when I Googled it, I found out that it was actually true.
As a buyer, I think having a game plan is critical. At McCoy Wyman, we always come to the table with our best offer. There is rarely much wiggle room after that. That whole dance we Americans are famous for takes too much time, and if you really want the property, might signal to the seller that you aren’t really serious. Sometimes it can be helpful to explain the rationale behind an offer, but in my opinion, it is only effective when your rationale is based on something the property needs, versus something the buyer wants. “It needs a new roof,” for example, is a legitimate reason to make a reduced offer. “We want to add a patio, deck or pool,” are not. What you do with a property once it is yours is your business and it won’t impact the sale price.
As a seller, you have to be realistic about the value of a property if you are motivated to sell. Working with your realtor to figure out similar sales in the area can be extremely helpful. It will also save time if you give your realtor an absolute price you won’t go below, even if that happens to be the sales price itself. Your realtor is duty bound to convey all offers, but if someone verbally conveys an offer that the realtor knows the seller won’t accept, it might save some time and paperwork if a potential buyer knows that before wasting time with a formal written offer.
Good luck out there. Happy buying and selling!
