Negotiating the price on homes and land in Sequim and Port Angeles effectively can put $10,000 or more in your pocket, or cost you $10,000. But even worse than loosing money, poor negotiating can cost you the transaction. As a seller, if you chase that one buyer away when mature negotiating could have brought the buyer to the closing table, you may have the house for many more months (or years), and you could end up selling it for less than the first buyer would have been willing to pay.
Port Angeles Real Estate Negotiating Mistake. I drafted an offer for a client who was pre-qualified and had a great job. After going back and forth on counters, my client finally upped his offer to the maximum that his lender would approve, which back in June of 2009 was a quite reasonable offer for a house that had not sold in about two years. The house had been empty and was ultimately foreclosed on. Believe it or not the seller killed the transaction over $5,000. I told the seller’s agent at the time in a friendly way, “You realize your client killed this transaction over $5,000.” During the negotiations I shared that the price my client offered was the maximum his lender would allow and all the money my client had, and we had made it crystal clear that that last counter was a final and firm offer. The seller made a negotiating mistake and lost that sale. My client walked.
I remember thinking at the time that by killing the transaction over $5,000 in the worst real estate recession I’ve seen in 30 years in real estate, the seller risked not selling the home for a long time, would have to pay property taxes again soon, would continue to drain his account paying other maintenance expenses for a vacant home, and by the time it does sell, he might end up taking less than my client offered if the market does not markedly improve. If you were a seller, would you have killed a sale over $5,000 in this market?
How did things end up? My client moved on to buy another house and he and his family are living happily ever after. The seller’s house sat on the market for another three months before it sold, and it sold for $3,000 less than my client’s last offer and $8,000 less than the seller’s bottom line. On top of that his loss included maintenance for another three months, which included hiring someone to take care of the place (he could not do so), winterizing the home so pipes would not freeze, paying the second half property taxes, and there was the opportunity cost of not having sold the property earlier. You can be sure for any normal seller there would be added stress, which you cannot put a price on, but it is a significant negative value.
Sequim Real Estate Negotiating Mistake. I drafted an offer on a nice home for a client, and without revealing the home or the seller, it was a price just south of $500,000. In this market my client was quite reasonable when he made an offer that was about $30,000 less than the listing price (about 6% less than the asking price). The seller foolishly countered with only a $4,000 reduction off the listing price. My client instructed me to not bother making a counteroffer. He felt the seller was either not a serious seller, or he was getting bad advice on how to negotiate. We found out later it was the later.
What was the final outcome for this seller? He ended up selling the home later for about $25,000 less than his listing price, but not without lost time and a lot of stress and frustration.
Negotiating the price on homes and land is an interesting game. You know the saying, “A little knowledge can be dangerous.” As I have written elsewhere, arrogance and pride are very dangerous. Humility is beautiful when it is combined with knowledge and wisdom. In these examples, humility (and good advice) also could have helped the sellers negotiate much more effectively.
Possibly Related Posts:
- Why Negotiating is Not for Amateurs
- Negotiating Mistakes Kill Deals
- From Offer to Mutual Acceptance
- The Danger of Unmanaged Emotions in Negotiating
- In Real Estate Knowledge is Power