Category Archives: Contract Negotiation

Changing Seats at the Real Estate Negotiation Table

I have worked with many home buyers over the years and done my fair share of real estate contract negotiations. Many eventually call me when it is time for them to list their home for sale. These repeat customers are the highest form of compliment an agent can receive. When a past buyer contacts an agent to sell their home, it conveys their confidence in my expertise and I successfully earned their trust and built a positive relationship with them. The buyer then becomes the seller.

There are many types of home buyers and sellers. Each specific category brings its own unique perspective when looking to purchase a new home. First time home buyers can sometime require a greater degree of hand holding as they navigate the home buying process for the first time.

They are often unfamiliar with the process and need to feel reassurance as the transaction moves from offer to closing. More seasoned buyers may not need as much information as a first timer, however still need an agent that has a proven track record of negotiating, a keen sense of the market and valuation, and strong communication skills.

For buyers, agents are tasked with ensuring that the buyer’s sales price is as close to market value possible and to facilitate the successful completion of the transaction. For sellers, agents are relied upon to come up with an accurate valuation of market value and to get the home in front of as many potential buyers as they can.

In a real estate transaction, the perception of the buyer is often that they are in a subordinate position. The seller has the final say about what offer they will accept. When a buyer turns into the seller they can often get drunk with power.

I noticed an interesting trend developing when past buyers become sellers. The mindset, perspective, and attitude is definitely influenced by which side of the transaction they are on. How a particular client is as a buyer does not always indicate the kind of seller they will be.

real etsate negotiationsI chuckle when a seller is unwilling to repair something that their buyer has requested and believes that the buyer is being petty or inflexible. Negotiations can go off the rails when ego take over. I often have to remind them of their requests when they were purchasing the home.

When they put the selling hat on they can be offended when a buyer asks for closing costs, even though they received closing assistance when they purchased the home. In fact many of them could not have purchased the home in the first place without the seller concessions.

When a buyer is making an offer they ask for the moon and hope to get a star or two. Buyers feel that sellers should help cover closing costs and accept an offer that may be below market value. Sellers feel that it is not their job to give up any of their profit for the sake of a buyer. Understandably, sellers want to walk away with the most money possible. Round and round it goes. This is the challenge that agents face regardless of which side of the transaction they may be working.

Tips for better real estate contract negotiations.

When the buyer becomes a seller, it is my job to remind them that moderation and compromise are a part of a successful outcome for both parties. Walking a mile in the seller’s shoes may take years for a past buyer to experience. Watching a loyal and satisfied customer experience both sides of a transaction can be frustrating and even amusing at times. The opportunity to see things come full circle is a reminder that walking a mile in someone else’s shoes is one of the most effective and powerful teaching moments in life.

 

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LONG STRANGE TRIP

As a Realtor, I am fortunate enough to meet many diverse people on a daily basis. Between networking with potential customers and keeping up with past clients there is never a shortage of interesting people. I have been working with out of town customers for almost two years now as they search for the perfect Florida home for their family. Working with this family has become somewhat of an adventure. We have had the good fortune to find some amazing properties together, however none have panned out up to this point. There have been many opportunities but for some reason not all of the stars have aligned for them to this point.
The Monastery
They are not cookie cutter kind of people. From our first phone conversation I knew that these buyers were not representative of the typical kind of buyer that we all work with on most days. From the start, I knew that they were looking for something unique, and in Florida, aka the land of subdivisions and HOA’s, that this was going to be a challenge. They wanted acreage, a workshop, a pool and something that they could put their own stamp on. Together we have toured a vacant monastery, complete with bell tower and a chapel that was missing portions of the roof. Initially they considered opening, renovating and operating a bed and breakfast property that could also double as a residence for their family.

Given that these clients are from up north, they have had to make special trips down when they have had time to get away. We have built a relationship over the past two years and at this point I pretty much know what they want and do not want. Last summer, we put a contract on their perfect home, however there were issues with the financing given that it was a VA loan. We named this one the EPCOT house as it was a custom home built in the 1980’s and literally looked like something from Future World. This broke both of our hearts for many reasons. Even now, this home is still the measuring stick for what their new home should feel like. Throughout this search I have always reminded them that when the time and place were right that things would fall in place and become a reality.

EPCOT

To date this has not happened. Each go around we have made more progress toward the goal of homeownership for them in Florida. As a Realtor, I often hear complaints from other agents about working long and hard and not having a commission check to show for it. I have also been told that some agents have dropped clients because on paper they were losing money in the end because the time spent with them had not yielded a pay day. I suppose I could be one of these agents. I am not. I am honored and rewarded by the fact that these clients have chosen to stick with me this whole time. My business model has always had loyalty and hard work as its top priority. Sure, it has taken some time to find them something that feels like home and fits their needs, but all good things take time.

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On their last trip down a couple of weeks ago they wanted to tour a home about 90 miles from my main area. A home that was dome shaped and a peachy flesh color. We agreed to refer to it as “The Boob” home. It seriously looked like a boob. We all got a middle school chuckle from this property for sure. Did I mention that these clients are perhaps one of my favorites of all time? They felt awful about my having to drive so far to show them this home. They even gave me the opportunity to refer them to a new agent given that their latest round of unique properties were out of the immediate area. They let me know that they wanted to continue working with me, but understood if it would be too far for that to happen. Their consideration is something that I truly appreciated. Of course, I let them know that I would be happy to work with them. When you invest time in high quality and kind buyers, you have no problem going the extra mile, literally, to show them homes.

At this point I am just as invested in seeing this happen for them as they are. I love a challenge. Weeding through properties trying to find that one unique home out there that was meant for them is high on my list of things to do. The lesson that I have learned with these particular buyers is that selling homes for a living is much more than paperwork and commission checks. Realtors work with humans, with wish lists, and questions about schools and inspections. We console disappointed buyers when contracts are not accepted or banks change things and financing hits a wall.

Our need for patience with the deals that may take years to complete is something that cannot be stressed enough. Our job depends on our ability to remain as loyal to our long term clients as are with us. I have had more fun with these buyers over the course of the past two years than any other to date. It hardly seems like work given the relationship we have built while we waded through muddy fields, laughed at odd floor plans and discovered really awful record collections in dilapidated workshops with no electrical wiring. Working with this particular family has been a long strange trip indeed and I am certain when their buying journey is over that my compensation will include not only a commission check but things that money cannot measure.

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