Christian Real Estate Professionals

Your Co-Worker Doesn't Sell Real Estate, Right? Then Please Listen!

Over the years, I have encountered a good number of clients who feel compelled to seek advice from a:

  • Co-worker
  • Friend
  • Cousin
  • Random Person on the Street
I'm not sure why it's okay to allow me (or any agent) to represent you professionally during your sale/purchase, but you want to double-check or seek new information from others about price.

When it comes to a real estate negotiation, I promise you that I know what I'm talking about.  I have successfully negotiated many hundreds of sales since 1997, when I was first licensed.  Can your co-worker at Dell truthfully make this claim?  If so, then I will listen.  If not, please take my word for it that I understand the market and what to expect.

Not long ago, I found a home that I think was probably perfect for a client of mine.  In point of fact, there weren't many options in the area they wanted.  

The home was priced correctly, and in pristine condition for its age.  The decision to make an offer was an easy one.

And that's where things went awry.

We met to write up the offer (in Texas, this is a minimum of 8 pages, usually 11 or 12).  Although it's fill-in-the-blank, it inevitably takes an hour or more to get things together and explain the paperwork.  Based on the limited options, and the comparable sales in the area, I expected the offer to be somewhere in the ballpark of the asking price.

"Actually, I was thinking of offering $______."  

Um....what?  Really?!?

"I also want to have them pay my closing costs."

Ugh.  This price was nowhere near reasonable for this home.  

I told my client that I would be happy to write it up for any amount, but I also warned that they might get no response at all.

The negotiating advice they received came from.........friends.  Friends who didn't buy a home in a desirable neighborhood, or one in immaculate condition, of course.  Friends who don't handle real estate sales every single day.  

Care to guess who was correct in this instance?

The response we got was friendly, professional, yet firm.  The seller had chosen not to respond, but instead invited us to re-submit an offer "if the buyer decides to get serious".  Unfortunately, I couldn't disagree.

I wasn't recommending a full-price offer, but I also knew from my experience that the suggested offer amount was just low enough to be insulting.  Sadly, the number we submitted was thousands higher than my client originally suggested, but still not in the "realistic" range.

So, if you are working with an agent, and you trust them, give them the benefit of the doubt when it comes to negotiating on your behalf.  You might actually end up buying a house and you'll still get a reasonably good deal.  



Image credit: http://www.flickr.com/photos/jenosaur/3776887321/

 

If you enjoyed this post, why not connect with me elsewhere or subscribe via email?

If you're looking for a home in the Austin area, you can also visit my primary Austin real estate website at www.austintexashomes.com.  If you're interested in social media training, visit 210 Consulting. Thanks!

69 comments • Jason Crouch, Broker - Austin Texas Real Estate (512-796-7653) • November 30 2010 10:57PM

Real Estate Negotiating 101 - You Can't Manufacture Leverage

I had to spend a bit of time thinking about the subtitle of this post.  I think this captures the essence of what I am about to cover here.  These are by no means compreshensive lists, but I think they provide a good start.  :)

Let me start by giving a few quick tips for listing agents:

  • If you have had a listing on the market for 6+ months, and you don't truly have an offer in your hand, don't try to convince me that you do. 
  • Don't act shocked by my offer, or use phrases like "I had to use smelling salts on the seller" or "We were very surprised at the offer".  Please just present it to your client and then get back to me. 
  • If you list a home at a crazy-high price, be prepared to defend it and/or to explain to your client why EVERY offer you receive seems to be a lowball.
  • If you get an offer in the first week or so, push for the full asking price.  You'll probably get it.

And now, for you buyer's agents:

  • If you are making an offer in the first week that a place is on the market, make it strong, unless the place is clearly overpriced.
  • If you have an option period (as we do in Texas), make sure you get the inspection done and all repairs negotiated during that time - you will lose a lot of leverage after that.
  • When your client has identified a house, and you are about to submit an offer, don't tell the listing agent that you have no other options.  In fact, make sure your client has a second choice.  It gives you more true leverage if the seller is unreasonable.
  • Make the assumption that the deal will work out during your initial offer letter/email.  You can say, "I look forward to working with you on this transaction." or something similar. 

No matter which side you are working for:

  • Try to remember that you are representing someone else and it's their money on the line.  Try not to act too excited or tip your hand about a specific property.  Rather than saying, "This is the one!", try something like "They have a strong level of interest, but we're still talking."
  • Never underestimate the power of simple friendliness and rapport - I will readily admit that, all things being equal, I would rather work with an agent who seems nice.

I hope this stuff comes in handy for you - some of it is common sense, and some of it comes from 13 years in the field. 

Have a great week - thanks for reading!

Photo above courtesy of jk5854 via Flickr.com. 

    

 

 

If you enjoyed this post, why not connect with me elsewhere or subscribe via email?

If you're looking for a home in the Austin area, you can also visit my primary Austin real estate website at www.austintexashomes.com.  If you're interested in social media training, visit 210 Consulting. Thanks!

74 comments • Jason Crouch, Broker - Austin Texas Real Estate (512-796-7653) • October 11 2009 10:42PM

There is a difference between bluffing and good negotiating - Don't gamble with your clients' money

I was thrilled this past month to have sold a listing of mine in 8 days, with three offers in hand.  With more economists predicting that we are at or near the end of the recession, this is very encouraging.  I have found that when enough people hear that things are good or getting better, they tend to start spending, which makes it happen.

During the negotiations on this property, I was reminded of something that has happened to me a few times over the years.  On occasion, when I receive multiple offers on my listings, I get the sense that at least one of the agents thinks I might be bluffing. 

Inevitably, these are the agents whose clients do not "win" the house.

It doesn't really seem to matter if I tell them something like this:

"Obviously, my client wants to get the best deal possible for their home, but I really do have ___ other offers."

I suppose most of us have been conditioned to be skeptical of multiple offers, or bidding wars, especially since the media has talked so much about how tough it is to sell houses.  However, when a property is priced correctly and in great shape, it WILL sell fast, at least here in Austin.

Many times, I have had buyer's agents simply stand their ground, as if that will help their clients.  Unfortunately, that just removes them from active negotiations, basically surrending the property to someone else.

On the flip side of things...

If you decide that you would prefer to bluff during negotiations, don't make it so darn obvious.  Here are a couple of examples from my own career:

I once had an agent tell me that she was expecting a full-price offer in the morning, but that her clients were willing to take my offer if we would increase it by $5,000 (still not full price).  I told my clients to wait, and the sellers accepted our offer with no changes.  This was such a blatant and obvious lie that it was easy to see through the "strategy".

One agent in Austin has a longtime reputation for manufacturing fake additional offers whenever he receives a legitimate offer on one of his listings.  I was warned about this from my previous broker, and I was able to pass this along to my clients when we did the paperwork.  The agent did not disappoint us - he was "expecting another offer, or maybe two others", even though it had been on the market for about 4 months.  How convenient!  My clients got the home at THEIR price.

I have always believed that it is my job to get the best possible price for my clients, both buyers and sellers.  Thankfully, I haven't had to lie bluff to do so.

Thanks for reading!

          

Photo courtesy of Blixt via Flickr.com. 

 

If you enjoyed this post, why not connect with me elsewhere or subscribe via email?

If you're looking for a home in the Austin area, you can also visit my primary Austin real estate website at www.austintexashomes.com.  If you're interested in social media training, visit 210 Consulting. Thanks!

73 comments • Jason Crouch, Broker - Austin Texas Real Estate (512-796-7653) • August 12 2009 05:20PM