<p>Have you bought or sold a house recently? I’d love to hear your negotiation stories. How many rounds of counters? How close did you get to your secret last-best-final number? Are you happy with the result?</p>
<p>I found a house that I like but don’t love. (Quick backstory: i had to sell my beloved dream home in divorce, and can’t afford anything remotely comparable so I’m not holding out hope for “love.”) The house I’m thinking of buying is in a hot neighborhood in a hot market but this particular property has not been updated and is not necessarily a popular style (though I like it). It’s been on the market for over a month. More desirable places in the neighborhood are snapped up immediately. </p>
<p>Sellers apparently bought the property as an investment, but at the top of the market.</p>
<p>Comps are all over the place. There are comps to support asking price but also comps at 85% of asking price. Worse houses are currently on the market for much higher prices.</p>
<p>I made a low offer at 85% of asking price, significantly below what they paid for the place in 2007. They’ve come back with a counter at a de minimis reduction off asking price. I’m secretly willing to buy at somewhere between 90 and 95% of their asking price. </p>
<p>What’s the best strategy for getting the house at closer to the 90% of asking price range, without killing the negotiations all together?</p>
<p>(This is almost impossible describe without actual numbers. Would it be crass to provide actual numbers? Really hoping that some negotiation-whisperers could look into their crystal balls and provide advice on best way to counter their counter).</p>
<p>I wish I could sic my husband on your sellers as he is a spectacular negotiator. It is what he does every day in his career, so he’s had a lot of practice.</p>
<p>That said, this is so market dependent, and so individual. Some sellers are extremely unrealistic. In our case, when we bought our current house, our seller was in a similar situation to yours. He had bought at the top of the market, we were in a strong buyer’s market, so he was upside down. In our favor, he’d already bought another house, so was carrying two mortgages, and he’d been on the market for 7 months already. We went back and forth so many times I lost count. Eventually, we walked away and waited. We had made an offer which only made much sense if he closed by the end of the year. Mid December, he had his agent call us, and we settled for our original low ball offer, but paid his property taxes.</p>
<p>Within a couple of months of closing, the market shifted, and houses in our neighborhood became very desirable. A realtor contacted us and asked if we would consider selling at a very significant profit. After moving twice in 3 months and putting in lot of effort to convert a large theater room space into DH’s home office, we passed.</p>
<p>It easily could have not gone in our favor. I think you are smart not “to be in love” with the house, because when that happens, you tend to work the deal with emotion, and that’s not the best way to do a business deal if bottom line is the priority. I simply can’t work that way, so I basically left it to DH and did not let myself care one way or the other.</p>
<p>Getting the worst house in a great neighborhood is, of course, what everyone dreams of. You need to know in your own mind what is the most you will pay for the house. Then make your next offer slightly below that and see what happens.</p>
<p>If the seller doesn’t come down much more, then you need to walk away. Since you’re not in love with the house, that won’t be too hard.</p>
<p>Remember it’s a business deal. Try to leave emotion out of it. </p>
<p>You could also give your “best and final” offer and make it clear that you are finished negotiating. That’s what we did. When he rejected it, DH told the agent, “well, let us know if he changes his mind. But we are moving forward on some other properties we like.” There were none at the time, but his agent didn’t know that.</p>
<p>A lot depends on your market. Sounds like yours is more sluggish than some. Around here, folks are getting the asking price…or higher if the property is desirable…often with multiple bidders.</p>
<p>Put in your bottom line offer and continue to look.</p>
<p>the #1, #2 and #3 most important things in real estate is Location. If it’s a good neighborhood, resale value will hold up. </p>
<p>Are you a cash buyer or are prequalified? if so, you are more interesting to a buyer and Have your agent make that point. The less contingencies in a contract are also important. Given they aren’t living there, a quick close might be worth $ to them. A rule of thumb is carrying a house costs 1%/month. </p>
<p>Go back at 90-92% of asking and say it’s your final offer. </p>
<p>Quite right, the fewer the conditions a potential buyer wants, the simpler and more attractive an offer is. And, if you put forward a “last and best” or “final” offer, make sure it is that. Don’t offer something higher 5 minutes after you’ve said that. Not only does a buyer look like they lack integrity, but a seller and realtor will always be skeptical of anything else they might say in the future.
A month on the market is not considered a long time.
A counter offer only pennies lower that their ask is intended as a signal that they do not intend to drop much at this time.</p>
<p>I would guess it depends on how long it’s been on the market and how badly they need to sell it soon. Any idea? </p>
<p>I’ve never done this before, but I would probably counter back at 86.5% of their asking price or so with a number down to the $100 level (as in, $184,800 instead of $185,000). I wouldn’t say it’s a final offer, but if recountered I’d hold off for a few days before responding again, and maybe come back afterwards at that amount up to the thousand, maybe plus another thousand if it’s an expensive house. But probably situation dependant. If they have no pressure to sell immediately (as in, they’re a retired couple just looking to downsize) then I have to give more room. If they’re moving to a new area because of a job and they have to go soon, I can be firmer.</p>
<p>Mostly posting to think though how I would do this.</p>
<p>If they’re not budging on price, it’s my experience that you’re SOL. Do you like the house enough to pay their price? If so, meet it. Otherwise, tell the agent you’re moving on. A month on the market (IMHO) is not enough to make a seller reduce the price.</p>
<p>I think the fact that their counter was such a small reduction indicates that your current offer is too low, and they don’t think you are a serious potential buyer. </p>
<p>At this point, I like Nrdsb’s advice. Put in an offer at the max price you are willing
to pay and indicate it is your final offer. </p>
<p>Using the same agent as the seller incentivises the agent because the agent gets two commissions. The agent makes more money selling to you. For example, You can tell the agent she can represent you for 1.5 percent commission. The seller can pay 2.5 percent you pay 1.5 percent. The agent’s firm makes 4 percent gross now instead of 2.5 percent. If that doesnt fly… Just pay the 2.5 percent. </p>
<p>The agent will work on the seller to cut the price.</p>
<p>Having said this, I agree with dmd77. Doesnt look good if the counter offer is a barely reduced number.</p>
<p>I don’t know if it’s the best strategy for getting the lowest price, but I would want to have my own agent. I want my agent to be looking out for what’s in my best interest.</p>
<p>I’m choosing to believe a good agent looks out for his client as well. If the agent is representing both the buyer and seller, there is, I would think, more chance for conflict of interest.</p>
<p>If the agent works for the buyer and not the seller as well, he’s less vested in making that particular deal happen. Maybe <em>that particular deal</em> wouldn’t really be a great one for you. Think inspection, etc. He’s still in the game if he finds you a better one.</p>
<p>I think one round of offers is too soon to resort to best and final.</p>
<p>I think if you are willing to pay between 90% and 95% you should come up to 90% or maybe even slightly higher, with as few contingencies as work for you, and see whether they move at all.</p>
<p>I don’t think giving actual numbers is crass at all. I think it would be helpful, if you feel comfortable doing so. Percentages are indicative, but real numbers have very real psychological impact for most people.</p>
<p>How can anyone tell the difference between them being unwilling to sell for less, or them thinking the purchasers really like the house and will fold to their bluff? </p>
<p>I don’t believe anyone can really know the sellers’ or buyers’ intent, unless they’ve disclosed it to their RE agent (who shouldn’t be sharing…but some do, as I know from experience.) What’s helped us is to try to keep emotions out of the dealings and decide that the other party needs to close more than we do. Of course, that’s usually easier as a buyer than as a seller.</p>
<p>If there’s a rule about how many rounds negotiations should go or how long they should take, I haven’t heard it. In some cases we’ve been under time pressure and have made our one and only offer, which our RE agent was instructed to present as our best and final. More than once, a seller’s agent was surprised when we didn’t return to try again but instead moved on to the next choice.</p>
<p>If you can pay cash, make sure the sellers know. If not, but you’re preapproved and have a substantial down payment on hand, make sure they know that, too. We made an offer on a failed builder’s spec (a deed in lieu of foreclosure deal)
for 70% of list price. Neither our agent nor the selling agent wanted to present the offer. We insisted and put up 20% earnest money to show we were serious. We got that house at our price.</p>
<p>Being able to pay cash or being pre-approved and willing to close fast are often very good negotiating tools to have in your back pocket. If a seller has been through the agony of thinking he has sold a property, only to have it fall apart do to buyer financing problems, that is something that can differentiate your offer from another one which might look better at first glance.</p>
If the agent is representing both the buyer and seller, there is, I would think, more chance for conflict of interest.</p>