When you're too rigid or unrealistic in your price negotiations during an offer
sometimes this will cause a communications breakdown between the
buyer and the seller making it much harder for the deal to
come together.
Today I'm going to share with you a story about a listing that I
have where an offer came in too rigidly and
that buyer ended up missing out on a great property.
We've helped countless buyers and sellers successfully negotiate
offers the right way helping them to reach their real estate goals
in the smoothest and simplest way possible.
If you're new here subscribe to
our channel and hit the notification bell
because we're releasing weekly videos for mortgage and real estate advice for
you.
Now here's the story: I have a listing
that's been five days on the market so it's quite new and we're getting a lot
of showing activity on it and an offer
comes in and it's a bit lower of initial offer
price and my sellers are a little bit upset
but I advise them properly that this is a buyer's market right now in
Calgary and we should see if we can work with it but
at the end of the day if it doesn't meet where we want to be in terms of price -
then we can always walk away.
My seller clients agree to work with
this offer so we come back with a counter offer of five thousand dollars
off the list price and the buyers come back with their
counter offer of five thousand dollars up from where they were from their
initial offer price and that does show good faith
and we think everything is going well and there's two more moves back and
forth where we do this but now we are fifteen thousand dollars
apart and this is where it goes a little bit sideways.
At this point the buyer's agent calls me and they say
look my buyers are looking to buy a really good deal
so they want a discount on this property and i remind the buyer's agent that
this listing is five days on the market and we have a lot of showing activity
and also we price it very competitively so even at market value they're still
going to get a really good deal on this property.
So I tell the agent to come back with the counteroffer
and we'll see if we can come to an agreement this is where the buyers dig in
and stand too firmly.
And with each counteroffer their move is only one thousand dollars
up and we still have a ten thousand dollar gap at
this point my sellers are at the lowest price that they will accept
and it's still ten thousand dollars higher than where the buyer has to be.
So I put in our final offer so the buyer agent calls me right away and says
"That's way too much and I think that you're overpriced so that's why we're
gonna walk away"
and I tell them that's okay and for our
sellers it is actually okay because we're getting a lot of showing activity
right now and we know that even at the lowest price that we're
willing to accept it's at fair market value.
So we let them walk away and the offer expires.
Over the next two days
the buyers are still coming back to us each time coming up a little bit
and closing up to that $10 000 gap that we had
up to our final and best price now they finally actually begrudgingly make it there
Now through this back and forth drawn
out experience it's forced my sellers to really
consider all their options carefully so my clients and i sit down and we have
a discussion about what is going to be the best
option for them and because my clients have very good equity position in the
property as well as the location offering a
really good rental rate I advise them to actually take the
listing off and to rent the property out and so that's what we do.
A couple of days go by
and the buyer's agent calls me again
and now they're offering more than what we asked for originally
my sellers have already decided that the best case for them
was to rent out the property which I agree with and now that property is no
longer for sale so we have to decline that offer.
So why am i telling you the story?
The lesson to be learned here is that
real estate negotiations should be done in good faith and usually
only work out when there's a win-win situation for both
parties.
Every negotiation comes with a little bit of gamesmanship
but if you're not properly positioning it or are too
rigid in your communication then that communication can break down
quite quickly and you're going to lose out on that deal whether you're the
buyer or a seller.
In this case when my sellers
came down to their best and final offer at their lowest price that they would
accept - This would have been the time for the
buyer to come and buy this property and a great real estate agent is going
to be able to advise their buyers that based on this price it's still a very
good value deal.
Be careful of the timing when you choose
to use a take it or leave it stance.
This almost never works when the gap is
too big and buyers and sellers cannot see the light
at the end of tunnel where they can actually agree
Tip two is: Don't get lost in the game gamesmanship is very important during
your negotiation but if you stand too firm and only have the
attitude of i'm only going to buy this property if i get a heavy discount on it
is not the right way to go.
If the home is right fit for you
and you're getting a pretty good deal then you have to reevaluate if having
that attitude is helping or hurting your negotiation.
Another tip is: Keep emotions out of it.
Real estate negotiations can get heated and you don't want to make a hasty
decision that you can't take back later so take a step back and look at the big
picture and be as objective as you can as much
as possible.
Remember - buying a home is a business decision.
What were your top takeaways from the story?
I'd love to hear them so put that in the comments section below
and if you found this video valuable hit that like and share button
and if you haven't done so already subscribe to our channel and hit the
notification bell because we have new videos coming to you weekly
My name is Jasben Lai with the LiveInnerCity
real estate team helping you keep real estate simple.
We'll see you next time.