Seattle Residential: I Do That: How Do You Negotiate?

How Do You Negotiate?

How Do You Negotiate?

answering emailI got an email from a buyer a while back. I had met him at an open house I was holding. It wasn't my listing and he acted like he knew more about the listing than I did. Maybe so. There is a lot of information out there. I asked if he wanted to look at some comparable properties. He said maybe.

I got an email from him a few days later. "How would you negotiate for me?" he asked. I could tell from talking to him at the open that he had read about the bubble and then the shadow inventory, and he was sure prices were going down more. He told me about how much less than asking other homes were selling for. So I pretty much guess that more than anything, he wanted the deal of the century.

I wrote back: There are two ways to negotiate. you can negotiate from a position or you can negotiate from merit. If you want to negotiate from a position you are essentially saying that you won't go over $xxx,xxx for that house. Your reasoning might be comps or condition. But you take a stand and see if the seller rolls over. That would tell me that you don't really care about the house, you only care about getting a deal. On the other hand, if the house has merit, if it meets your needs, if you can afford it, if there isn't any other property that meets your needs as well, for the same price, then it's worth trying to find a way to make the purchase work so that the seller's needs are met as well.

He wrote back: No, I want to know how you will make the seller sell at a lower price.

I knew the seller had received an offer at a lower price and it didn't work out. It might now and I would help the buyer with it, but it had to make sense.

I wrote back: It sounds to me like you are trying to defeat the seller. That is one style of negotiating. It will work if the seller and his agent are both accommodaters. They may just roll over, and give you the house for what ever you want. But they didn't to the last person. If both the seller and you were compromisers, we might reach agreement, but you would have to give up some of your desired features. I really don't know what they are other than a lower price than the home is currently listed for. On the other hand, with an offer too low, as you suggested you might make, the seller might just withdraw. We would go no where with this if the other party will no longer speak to us. I suggest we try to collaborate with the listing agent and the seller. We'll need to negotiate more after the inspection and possibly after the appraisal.  Some how we can tweak their needs with ours, once I know what yours are. I need to know why you want this house so I can build a case for you. Or maybe, there is a better house somewhere else that will work as well.

Apparently this buyer, a buyer who wouldn't sign a buyer's agency agreement, a buyer who didn't seem to have needs other than to get a house for way less than the listing price, a buyer who is perhaps, not a buyer at all, didn't like my idea that we try to work with a plan that would accomplish the goal of closing a sale. He seemed to want a negotiator who would help him make it fail. I didn't hear from him again, nor did I pursue him as a client. I don't think he really wanted to be a homeowner. I think he only wanted a deal.

 

 

 

 

Glenn Roberts
Retired

 

//

Comment balloon 192 commentsGlenn Roberts • January 11 2011 08:50AM

Comments

Bottom feeders...they are not in the market to make transactions but rather to waste time.  Recreational, nothing else, playing a game!

Posted by Gary L. Waters Broker Associate, Bucci Realty, Fifteen Years Experience in Brevard County (Bucci Realty, Inc.) almost 8 years ago

Glenn,  Sometimes we have to let a potential client walk away!  Good ideas on negotiations!

Posted by Karin Lundeen, Realtor Centennial Homes For Sale (Keller Williams Realty - Denver Southlands) almost 8 years ago

I like the way you approached this.  I've seen it done before (Tish is one of the best negotiators I've ever seen in action), but I don't think I've ever read/heard a better definition or explanation.   

Posted by Cinnamon Wright, Assistant to Tish Lloyd (Wilmington Real Estate 4U 910.547.1446) almost 8 years ago

Glenn: I had one client like this years ago. I was sorry from the first day I started working with him. I tried several times to fire him and kept telling him to get another realtor. He would say "I'm sorry" but then would start up again. After we wrote a contract I couldn't ethically fire him but boy did I want to. I have learned my lesson. Folks like that just aren't worth it. 

Posted by Jane Jensen (Century 21 New Millennium) almost 8 years ago

Looks like another person trying to steal someone else's property.  I think I would have walked away from this person a little bit sooner if I felt he was trying to fight me on my experience.  Great post.

Posted by Gary Pike (Better Homes and Gardens Real Estate Metro Brokers) almost 8 years ago

Gary - They are, focused on the wrong thing.

Karin - Everyone is not a perfect fit. Thanks

Cinnamon - I'm sure Tish is. I can see it in her writing. Thanks.

Jane - They seem to have such a different outlook and the terms house and home. Who know what they're thinking.

Gary - Exactly. I like to find out if someone is just making a misguided start into the process. I give them a chance.

Posted by Glenn Roberts (Retired) almost 8 years ago

Yes, focused on the wrong thing and not considering the injury the Seller has already endured in trying to sell in this market. You handled it well

Posted by Sylvie Stuart, Home Buying, Home Selling and Investment - Flagsta (Realty One Group Mountain Desert 928-600-2765) almost 8 years ago

Glenn,

I often want to ask, "Are you buying a house, or just buying the deal?"

And I never understood how people believe we can just magically "make" another party agree to do anything...

Posted by Mike Jaquish, 919-880-2769 Cary, NC, Real Estate (Realty Arts) almost 8 years ago

Sylvie - I sometimes wonder what motivated him in the first place.

Mike - Homes as a commodity, see me now.

Posted by Glenn Roberts (Retired) almost 8 years ago

Glenn, I always alert them that if the seller chooses to not respond at all to their low offer, that they might have to counter their own offer - going from a negotiating position to overpaying.  But you are absolutely right, some are just not in the market to buy.

Posted by Ellie Penaranda, Naples Florida Real Estate - Waterfront & Beach Co (239.776.5077 Downing-Frye Realty ) almost 8 years ago

Ellie - I warn them up front that the seller may choose that route and their position is weaker by having to come up when there is no counter.

Posted by Glenn Roberts (Retired) almost 8 years ago

Glenn, Great post. I suspect we've all had a few contacts from this type of buyer. They lose the purpose in the method. Is the goal to buy or to defeat a seller? I love the word compromise!

Posted by Charles Edwards Bentonville, AR REALTOR, Bentonville Real Estate Agent and Broker (Coldwell Banker Harris McHaney & Faucette 479-253-3796 ) almost 8 years ago

Charles - Keeping the objective in mind will result in a fair negotiation.

Posted by Glenn Roberts (Retired) almost 8 years ago

What an interesting exchange.  I think you said all the right things.

Posted by Kimberly A Norgard (Devlin McNiff Halstead Real Estate) almost 8 years ago

Glenn ~  This is an excellent exchange -- I had a similar experience several months ago and I certainly wish I had been armed with this post.  You really spelled out the bottom line in a clear and concise manner without smacking anyone upside the back of the head -- (NCIS).  Have to lean on this one . . .

Posted by Tish Lloyd, Broker - Wilmington NC and Surrounding Beaches (BlueCoast Realty Corporation) almost 8 years ago

Kim - sometimes not having the client is the best option for all.

Tish - CA was praising you above. And I believe every word of it.

Posted by Glenn Roberts (Retired) almost 8 years ago

Glenn, this sounds like the kind of buyer you don't want or need----someone that will be a headache for all parties---even the inspector :)

Posted by Charles Buell, Seattle Home Inspector (Charles Buell Inspections Inc.) almost 8 years ago

Glenn, it was after working with a lot of people like that that I learned I could make more money in less time, working with people I qualified more stringently before we started...

Posted by Chris Smith, South Simcoe, Caledon, King, Orangeville Real Esta (Re/Max Chay Realty Inc., Brokerage) almost 8 years ago

Glenn

I really like the way you state that there are two ways to negotiate - it's helpful to consider these since buyers will fall into one or the other category.

Posted by Margaret Goss, Chicago's North Shore & Winnetka Real Estate (Baird & Warner Real Estate) almost 8 years ago

yeahhhh!!!!!!!!!!!  Good for you to be able to walk away and not sweat it.  He would have wasted so much of your valuable time.

Posted by Sajy Mathew, Making your real estate dreams become a reality! (Coldwell Banker Residential Brokerage) almost 8 years ago

Loved the way you summed it up - negotiate from Position or Merit!  What a great way of explaining it.

Posted by Karen Krupovage, Owner & Qualifying Broker, Affinity Real Estate, L (Affinity Real Estate, LLC Alamogordo, New Mexico) almost 8 years ago

Nicely done Glenn.  I wish I had been so articulate with my shark/buyers.  I find they are hard to help because they are only looking for the answers they want to hear.  Not the reality.

Posted by Mickey DiPiero (Mickey DiPiero - e-Merge Real Estate - Columbus, Ohio) almost 8 years ago

Position or merit - nice summary.  I have rarely been successful putting deals together where pure defeat was the true objective.

Posted by Jeanne Dufort, Madison and Lake Oconee GA (Coldwell Banker Lake Country) almost 8 years ago

Great post Glenn.  This is what I term the 'Walmart mentality' that is taking over the mindsets of an awfully lot of people in the country.  They completely forget that their goal is to buy a home (or in my case, get a beneficial loan)

I give folks a chance as well, but more often than not, cutting ties is the smartest thing to do to avoid the headaches that accompany these types.

Posted by John Meussner, #MortgageMadeEasy Walnut Creek, CA 484-680-4852 (Mason-McDuffie Mortgage, Conventional Loans, Jumbo Loans, FHA, 203(k), USDA, VA,) almost 8 years ago

Can't help but wonder...even if through some miracle you could negotiate and get the seller to accept his lowball offer, he still wouldn't be satisfied. Obviously, (to his mind) if the seller accepted it, he could have gotten it for even less. Kinda like not wanting to join any club that would have you for a member.

Posted by Linda Humphrey, CRS, Broker/Owner HHC Realty (Humphrey Home Connections Realty, Reno, Nevada) almost 8 years ago

Hi Glen,   remember, there are some real estate programs out there that only teach trying to get deals unrealistically below market.  These folks have paid good money and have been told how to work an agent over to accomplish their goals at the expense of everyone else.

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) almost 8 years ago

Good explanation.  But remember as a Realtor, we have the luxury to play these different roles.  Some clients are looking for "merit', while others are looking for the big deals.  We need to become comfortable with facilitating either transaction, otherwise we may lose out on a number of deals. 

Posted by Brian Hurt, ABR, E-Pro (Keller Williams Premier Realty) almost 8 years ago

These are the kind of "would be buyers" that just want to steal a house.  They will not listen to reason and they will only drag your reputation with other agents through the mud in the process.  They would never be satisfied and would always want more.  Good for you for not pursuing such a person.

Posted by Karen Feltman, Relocation Specialist in Cedar Rapids, Iowa (Cedar Rapids/Iowa City, IA KW Legacy Group) almost 8 years ago

Charles - Someone once told me that if a client is trouble from the first, it will probably get worse.

Chris - The best part of this job is the ability to eliminate the bad apples.

Margaret - And agents and sellers fall into categories. Sometimes tough to sort out.

Sajy - Learning how to sidestep this things when you need clients is tough.

Karen - Sometimes you don't want to mirror what the other side is doing, but find a way to sway them.

Mickey - Well, it comes off better in the telling than the actual doing.

Jeanne - Defeat rarely works. Usually results in a walk-away.

John - I took me some time to learn. But some people never go that way.

Linda - That is so true.

Bill - I had a client once go to a 1 week class for $5,000 and we steadily grew apart after that. She's doing well, but ended up need to use everyone rather than reward those who had helped her.

Posted by Glenn Roberts (Retired) almost 8 years ago

Glenn, I agree it is not a CONTEST between parties but both sides trying to build win-win. Win-Lose most often just never arrives in an agreement...

Posted by Gary Woltal, Assoc. Broker Realtor SFR Dallas Ft. Worth (Keller Williams Realty) almost 8 years ago

Brian - Sometimes I'm not comfortable with a buyer or seller's agenda, and have learned to let it go.

Karen - They are takers from the beginning, and never let up.

Gary - The common goal, it is surprising to me when I encounter people who can't picture that and every transaction should be a battle.

Posted by Glenn Roberts (Retired) almost 8 years ago

Great story, Glenn. Sounds to me like you handled this particular client appropriately.

Posted by Bill Burchard, Broker, Realtor, Representing Buyers and Sellers (3B Realty: 951-347-3818, CA) almost 8 years ago

Bill - I sometimes wonder what he thinks of me...that I was an idiot for not working with such a great buyer? Or something else.

Posted by Glenn Roberts (Retired) almost 8 years ago

Glenn,  This is an excellent post and reminds me of many of the "so-calle" buyers we have seen in the last few years.  I will re-blog, but more importantly, bookmark this post for my own use when "negotiating" with those cagey buyers!  Thank you,  Kathy

Posted by Kathy Schowe, La Quinta, California 760-333-8886 (California Lifestyle Realty) almost 8 years ago

He sounds like he needs to get his cash and go to a foreclosure auction. Once they hit the MLS, there are good deals to be had, but the crazy cocktail party story deals are not there. Most of these stories are as true as fishing stories anyways.

I can help people to get a fair deal on a home and I work my tail off to do that. I also know that I cannot make anyone do something that they do not want to do.

Sounds like you handled him the best way he could be handled. Wonder if we will kick himself in 5-10 years when prices are back up and he has no home?

Posted by Michael Simcock, Elk Grove, CA Realtor 916 425-1084 (Coldwell Banker (Elk Grove, CA)) almost 8 years ago

Glenn, I liked your post and I like your style!

I would have dropped that Buyers so fast - the "possible" commission would not have been worth the headaches this type of person will present.  Count your blessings you never heard back from him.

Posted by Marie Story, Broker Associate, Pinecrest (Miami) Specialist (Coldwell Banker - Pinecrest (Miami)) almost 8 years ago

Kathy - Thank you for the reblog. recognizing the types helps you stay centered.

Michael - He was young. Still in his twenties. Maybe another agent could have shown him the light.

Marie - I think you are very right.

Posted by Glenn Roberts (Retired) almost 8 years ago

This is a really great explanation of the ways to negotiate - some so much more likely to end in success than others.  And it sure does sound like this buyer (?) was way more about defeating the seller than actually buying a house.

Posted by Nancy Conner, Olympia/Thurston County WA almost 8 years ago

You made some great points to him - and you're probably better off without him as a client. You'd write dozens of offers, offend fellow agents in the market, and not earn a commission. Sounds like he needs an education that only the market can provide.

Posted by Christianne O'Malley, Exceptional Service - Delivering Results in Reno! (RE/MAX Realty Affiliates) almost 8 years ago

The word integrity comes to mind here Glenn...............you handled this well...........great post.  Congratulations on the Feature.

Posted by Roger D. Mucci, Lets shake things up at your home today! (Shaken...with a Twist 216.633.2092) almost 8 years ago

Nancy - That occurred to me from the beginning but I gave it a chance.

Christianne - Yes it would have been a long haul until he blamed me for being a poor negotiator.

Roger - Thank you. Life has been good.

Posted by Glenn Roberts (Retired) almost 8 years ago

My comments are from a NC law perspective...

You say you met him at an open house..so was it your listing0r even your companys listing?  If so, when he asked about how you would negotiate FOR him, I would have responded that I was legally bound to represent the best interests of the SELLLER of that listing, and even if he signed a Buyer Agency agreement, I would not be able to be "HIS" agent to negotiate terms and conditions for that house. 

If your state's laws are the same, you could have saved yourself a lot of time and aggravation trying to meet the negotiation responsibilities he wanted you to assume but could not legally do.koku

Just move on and next time you find his "brother" in the demands department, keep on walking and try to find a ready, willing, and able buyer who is wasting your time.

Posted by Marion Morton almost 8 years ago

Marion - It was not my listing, but a listing in my company. In Washington only the listing agent represents the seller, and all other agents represent no one or a buyer, if they have a contract that sways so. I allow so time to any potential client, to see what their position is before I decide to work with them or not. The process does not take a lot of time or aggravation, more so in the telling.

It has been interesting to not here on Active Rain and in this post the variances in how state laws effect and control our behavior and our mind sets. Thanks for this information from NC.

Posted by Glenn Roberts (Retired) almost 8 years ago

Sounds like many of us have encountered this type of buyer, as I have.  Just recently worked with a buyer who was out for the "deal of the century".  After explaining what the comps were for the neighborhood, they still insisted on offering VERY low.  I told them that they may not have the opportunity to negotiate as the seller may reject the offer and not counter.  We submitted the offer and the sellers countered at the listing price!  It all worked out in the end, but in the future I may pass on this type of buyer.  It was alot of stress and not a smooth transaction, many heated conversations with the buyer who thought the seller was being stubborn!  But they loved the house and eventually paid very close to list, but wow what a closing!  Great tips on how to deal with this in the future!

Posted by Carolyn Hoff (Coldwell Banker) almost 8 years ago

Often further negotiating works after the inspection reports are ready. That was a good idea you brough up. Depending on the situation and the type of buyer, I have had success by presenting a lowball offer, which gets flat out rejected, the making another offer a little higher if the buyer still wants the house, then the seller becomes more receptive to further negotiating. By the way, how much was your "buyer' pre-approved for?

Posted by Flavia Brown almost 8 years ago

Glenn, hooray for you for not pursuing this buyer.

The irony for me is that I have this type of buyer right now - only I also have his home listed for sale.  When he offered an extreme low-ball that was ridiculous, and went un-countered by the seller, he was furious.  I had explained how the home was already listed WAY under market value, and that it would likely generate multiple bids.  If he wanted it, he would have to go higher.  Nope, he wouldn't do it.  Flash forward 2 months later, when a buyer submitted a low, but not ridiculously low initial offer...he went ballistic!  "The nerve of that buyer!"  I'll never sell at a dime less than XXX!"

Good grief.  This is the first client that I have ever thought about firing!

Posted by Melissa Brown, Realtor - South Charlotte NC Homes for Sale (Helen Adams Realty) almost 8 years ago

Glenn - what a refreshing post. You dissected this "buyer's" demands into exactly what it was... a game. If a buyer can't articulate his needs or why they want a specific house, they can't possibly be ready, willing and able. Incredibly wise of you to not waste your time. 

Posted by Caroline Gosselin (Prominent Properties Sotheby's International Realty) almost 8 years ago

Glenn,  Very well said in the written form.  I'm sure you would agree personality types and timing so often determine whether a transaction will work out.  None of us is a perfect fit for every Client out there.  As for this buyer, bottom line appears to be the whole story and I doubt he'll fathom that the cheapest home might not be the best buy.  In our area, this buyer mindset will land him a "dog."  I define "dog" as a home with fatal flaws.  A fair number of foreclosures are also "dogs."  Priced at low market, they're snapped up like good buys.  Truth is, they'll never be good buys which will be born out when the current crop of buyer's become sellers.  I say to my Buyer Clients, "in a market with so many homes for sale, do you want to buy one with a fatal flaw?"  Price is not the whole story.             

Posted by Beverly Femia, Broker Realtor Stager - Greater Wilmington, NC Are (BlueCoast Realty Corporation) almost 8 years ago

Love this!  I don't care what market we are in, the surest sign of a deal well negotiated by both sides is one where each party feels like they left a little on the table.  I've been inspired to further expand on this post in the coming weeks.

Posted by Mark Stuart (Berkshire Hathaway HomeServices California Properties) almost 8 years ago

This is a great post. Investors can approach a negotiation from the price point but people buying to live in it should have more of the merit approach. This market and the media made buyers somewhat greedy. But it was a wise thing for you not to work with this "buyer".

Posted by Elcin Kaleli almost 8 years ago

Glenn, I loved the way you responded to this "would be" client. I agree he was only looking for a deal thtat wasn't there and once in a while writing a low offer isn't bad but I do expect the client to be loyal and have realist ideals in the long term of our process of getting them a new home. Great job on showing him how it needs to be done to create the right outcome.

Posted by Robby Leviton, Knowles Team (Keller Williams Realty) almost 8 years ago

I have a client now that wants to sell his house for $20g's more than I proposed we sell it for after showing comps, explaining the selling process, he still knew more than I did or so he thought. We haven't listed, by the way the house is only in the $70's.

Posted by Gary Poppens (Keller Williams Sioux Falls) almost 8 years ago

It sounds to me this person may have been trying to qualify you and your ability. Take it from one in the NYC shark tank.

I would have to ask the person first what price is he or she looking to buy the property at. This would give me a sense as to weather a deal can be struck. Is he a serious buyer or isn't he? As far as how I would answer his question, Basically I would tell him I couldn't without knowing his position his goals ,his finances or ability to create a smooth easy transaction, Then I would need to get a sense of the sellers motivation and do a market study on the property to find out its fair market value, Then I would need to find comps to show both parties to justify a fair negotiation. I would then ask, If you are looking to get a fair price and not be taken advantage of ? And of course you are not looking to take unfair advantage of another person are you? You seem like an honest person am I right? If he answers yes to my the last question. I tell them I will be doing lots of research and spending a good amount of time and the only way I can legally represent you and provide these services will be as a buyers agent otherwise I am legally obligated to work for the seller or broker or as a dual agent which means I must hold back confidential information from you in either case and cannot represent your financial interest beyond disclosure of known defects or information pertaining to taxes sizes and incumbranaces. Telling you how I would negotiate would be a buyer agency type service. If you want to hire me to represent you we can proceed but until we do we have as a default a customer salesman arrangement so without establishing our relationship first I can be in breach of my fiduciary duties. For this we need to commit to each other hence the buyer agency Agreement. If the person is not really in the market to purchase a house half way through they have ran out the door. Anyway he saved you a lot of time and now you can work with normal buyers that are qualifiesd and want to buy a home. Best of luck to you.

Posted by Thomas Preston almost 8 years ago

Buyers taking that position are an utter waste of time. In my experience after they get done trying to beat the seller into submission they try to beat the agents into submission by wanting part of the commissions. In the end they just don't work out until the buyer loses several properties. At that point, with all the time, energy and frustration that goes into the deal(s) it is just not worth working with them. 

Let em work with the newbies :) 

Posted by Bruce Swedal, Denver Real Estate almost 8 years ago

Well said and perfectly handled Glenn.  As I read through your post the one thing that jumped out at me was that this "buyer" was trying to get you to give him enough information to use to negotiate his own deal and when you didn't he probably just moved on and tried the same tactics on another agent. Good riddance!

Posted by Page Wade almost 8 years ago

Great Post.  I've had a few clients over the years like this. My last one was almost as stubborn as this guy, but was reasonable and nice. I forwarded him the best foreclosed homes that met his criteria, usually about 1/month and was eventually able to get him an excellent deal on a foreclosed home.  Sometimes, you got to let the client be the expert and nudge him in the right direction. Of course it helped that he had $500K cash in the bank and was serious about buying a new home.

Posted by Sean almost 8 years ago

After holding many Open Houses, I have really experienced the various people who walk in and their questions.

It sounded like your Buyer Prospect wanted to know how you would negotiate so he can go out and do the same thing without the Buyer's Agent or any Agent altogether.  He wanted a house and a deal and no Agent involved.   

Your answer was priceless, but totally not what he wanted.  So, he moved on.    NEXT?

 

Posted by Diana Bowler almost 8 years ago

Hi Glen, excellent post. I think we all have worked with a client like that. Sounds like you actually dodged a bullet with working with this guy. I'm sure there will be another agent that will be willing to write up low ball offers after offer..but your gut instinct was right.

Posted by Cindy Westfall, ABR,GRI Your Tualatin & Portland Metro Real Estate (Premiere Property Group,LLC Portland Metro & Suburbs Oregon) almost 8 years ago

I really like the position or merit analysis....nice post!  The buyers who operate from the "position" angle seem to be kicking a seller when he is down, unless they are investors who are really needing a deal to make the numbers work.  Or maybe they have just been watching too much HGTV or infomercials.

Posted by Dana Wilkinson, Broker-Your TX agent for The Woodlands-Spring-Conr (Connect Realty, The Woodlands, TX) almost 8 years ago

Great post and responses.  When my red flag goes up on a potential client I think about the financial and emotional drain I will likely experience.  Spending time with them causes loss of opportunity to work with someone prepared to pursue a win/win transaction!

Posted by Alice Nye Fitch almost 8 years ago

Glenn,

Bravo!  As a professional negotiation trainer in real estate, I think you handled the buyer exceptionally well.  Recommending a collaborative approach to find a solution that satisfies both parties is definitely the right approach.  Buyers who openly acknowledge their only goal as "taking (unfair) advantage" of the other party will likely have that attitude towards their agent as well. 

We teach our negotiation training at SKCAR frequently and we'd love to have you in class!

Tom Hayman

Real Estate Negotiation Institute

Posted by Tom Hayman almost 8 years ago

Glenn,

I firmly believe that deciding to work with the right people will define some of our success in this business.

Negotiation is certainly a compromise.

Negotiation is high value activity.

Good luck in your endeavors,

Posted by Coldwell Banker Camelot Realty, Homes for Sale Mount Dora Realtor (Coldwell Banker Camelot Realty) almost 8 years ago
Glenn. Very well put, you handled that person with class and professionalism. He thought you were going to roll over and be his puppet. I sell foreclosures also and had a man tell me to call the bank and tell them about the property and his offer. I said well NO the bank knows the property condition and that his offer was rejected because it was to low. Pretty simple I have learned that many times these people wanting a free house can't Oxford it to begin with so they act like some baby Donald Trump
Posted by Tim Riddle almost 8 years ago

Great post!  I had this situation awhile back and the buyer (taking a positional stance) wasn't motivated to get the home, (I don't think based on subsequent issues) no surprise the offer was rejected at first.  A few days later the seller countered out of the blue.  We walked.  A day later the seller countered lower again, at this point, knowing the bottom line with my buyer, I stated that it would fly for xxx and that is it.  Seller accepted.  I guess sometimes you find a highly motivated seller, especially in this market.

Posted by Melinda Pearson (Prudential Serls Prime Properties) almost 8 years ago

I imagine myself as the seller's agent working with this buyer and the agent he eventually winds up with. I would advise my seller to just reject his offer outright asuming it was way below market value.

Then I think about those "bottom feeders" that are making very low offers on property. They are looking for a situation not a property. The situation is a distressed seller who must sell to raise cash quickly. There are sellers in that situation. A bottom feeder may be doing that seller a favor bringing much needed cash when no other buyers are looking at the property.

As an agent I do not want to be in that bad karma.

Posted by Jerry Germansen almost 8 years ago

That type of client drives me crazy! Even when the home is priced below market value, they want a steal of a deal and make lowball offers. They have that "buyer's market" thing on their minds and won't listen to reason. Great post!

Posted by Rose King, Friendswood / Pearland / Houston Bay Area (David Tracy Real Estate) almost 8 years ago
I'm not into making $5 an hour and getting drained. Not a real buyer in my opinion. Great post thx
Posted by Eborges almost 8 years ago

I say "Yes" and "No" to this particular buyer.

Yes: I don't blame this potential buyer for wanting a great deal on a home.  I am a Nashville Tennessee real estate broker who focuses on short sales and pre-foreclosures.  I am also an active cash home buyer.  I am looking for a great deal for my own home purchase, which usually means offering substantially less than list price.   I believe this strategy is completely justified due to the "temporarily artificially propped" housing market we are in.  As a buyer I am being forced to factor in that there are millions of yet to be offered for sale pre-foreclosures and foreclosures (REO's).  While I do not know how many of these "shadow inventory" homes will be available in Murfreesboro Tennessee (the town where I am looking to buy in), I can reasonably guesstimate that it will be slightly more than the average for states in the US based on Tennessee's typical foreclosure ranking at a little worse than average.  As a buyer, I am also being forced to compete with buyers who are really not qualified (based on normal historical standards), but who are able to buy a home due to artifically low interest rates and government enabled very low down payment mortgages.  These buyers have little to no "skin in the game" and typically are not financially savvy, and, therefore, are willing to overpay for homes (i.e. they are not aware of the issues affecting the housing market).  Given the information provided in my blog posts, Nashville Home Prices Declining Again and US Housing Market Facing “Doom”, it is clear that home prices in Nashville are going down.  In other words, there are completely logical and proven reasons why a buyer would need to purchase a home well below the inflated list prices that still exist today.

No: While I have shown the completely legitimate reasons why a buyer would need to get a "great deal" on a home, it does not not mean that I would want to work with the buyer described in Glenn's post.  This buyer's unwillingness to sign a buyer agency agreement is a red flag that indicates that they are not committed to buyng a home through Glenn and maybe not at all.

Posted by Jim McCormack, Nashville Short Sale REALTOR - Stop Foreclosure (Nashville Short Sale Specialist - Jim McCormack - Edge Advantage Realty, LLC - 615-784-EDGE (3343)) almost 8 years ago

I liked your definition of position and merit. I had not thought of it that way, although I have encountered plenty of "buying poseurs". They watch whacky TV shows and read newspaper articles about markets in other areas and then think they can apply some of those methods themselves. Interestingly enough, many such buyers are not in a financially strong position (paying cash for a quick close, for example) to allow a deep discount negotiation.

You were smart enough to spot him early on and let him go. You would have just spun your wheels with him!

Posted by Sylvia Jonathan - Coldwell Banker Platinum Properties almost 8 years ago

Very good, good explanation, qualify, qualify, qualify..

Posted by Laura Reilly, Home Sales Realtor - Short Sale Team Member - Redd (Real Living Real Estate Professionals) almost 8 years ago

I recently had a buyer like this that I let go.  He did end up buying, but I hear that he made the transaction horrible for all that were involved.

He emailed me a couple of days back to gloat that he purchased a home.  I congratulated him, and then let him know of the better home, in the better neighborhood, that didn't back up to a busy street, that just sold for less money.  

Posted by Greg Haraksin, North Orange County Homes (Prudential California Realty) almost 8 years ago

This is the best post I have ever read on Activerain.

Posted by Earl Wynn (Realty Pros Of DC) almost 8 years ago

Great summary on negotiating.

There's nothing wrong with pursuing a great deal. Collaborating with the seller, and trying to meet their needs is the right way to do it.

Posted by Darrin Carey, Real Estate Buyer (Homes and More, Inc) almost 8 years ago

Everyone - Thanks for all of the wonderful and thoughtful comments. I so much appreciate the Active Rain model of directing us to this type of shared knowledge and support. When I read other online articles, I hate to comment because usually a hoard of unhappy people will tear into you. AR is so refreshing.

Tom Hayman #61 - I'll make it a point.

Thanks again., Everyone.

Posted by Glenn Roberts (Retired) almost 8 years ago

I absolutely love your responses.  Top notch!!!

Posted by Charlotte Stilwell, Broker-Associate (Century 21 Hardee Team Realty) almost 8 years ago

It sounded to me like your potential buyer was a little confused by your informed explanation. He may have been too embarrassed to ask for clarification and just booked.

Posted by Sandy Hamilton (Realty One Group) almost 8 years ago

file that guy under "pain in  the ass".   you don't mention the price point he is operating at but unless he's a giant payday (3 points on a million two) he brings nothing to the table but his special brand of BS. 

no matter what you offer the guy as information he will be second guessing you and making ridiculous demands of you...dismiss him and move on to a client that values your expertise.  firing clients is a skill  that we all develop sooner or later.

Posted by Michael Ford, California+Hawaii+Oregon almost 8 years ago

I have heard about & met a couple buyers with this same mentality. Some claim to be "investors". They have a very stubborn mentality and refuse to consider 98% of list price maybe a great deal when considering the neighborhood, location, state of repair etc.  I think these are the  same people that watch too much late night TV and believe they can get a 200K home for $1000.  If there were really tons of "pennies on the dollar listings" I would buy 6. 

Posted by Jennifer Marks (On Maternity Leave) almost 8 years ago

Glenn - Excellent post. For many of those buyers it is like a freaking dominant make game. They are so screwed that can go for a deal and then move to a place that they did not really liked just because they had upper hand.

What a BS

Posted by Jon Zolsky, Daytona Beach, FL, Buy Daytona condos for heavenly good prices (Daytona Condo Realty, 386-405-4408) almost 8 years ago

Spectacular job with this post Glenn. You did the right thing by walking away from this "buyer".

Posted by Craig Rutman, Raleigh, Cary, Apex area Realtor (Helping people in transition) almost 8 years ago

Negotiating is just that; Both parties getting to a place they each can agree on. If this guy would have ask "How will you compete for me", then this would be a completely different conversation.

There are those to live for the "fight" and that personality type is very difficult to engage with.

From what I am hearing from your post, I think you spend 59 seconds (out of a minute) to long on him. The most valuable thing we have as people and Realtors is our time and in humble opinion my friend; I would have used my time on something, someone more constructive.

I might send him the link to BuyOwner.com

Posted by Eric LaMay, The StarStateHomes Group of RE/MAX Heritage (StarStateHomes & RE/MAX Heritage) almost 8 years ago

Great post and tips on negotiating! 

We're finding, in our Bozeman market, that buyers like that are losing out to more reasonable buyers.  Prices have already fallen and there are many good deals out there.  Being greedy just doesn't work when multiple offers (just had that situation) come in. 

I, too, like your emphasis on "position" or "merit".  Good way to work through their thinking.

Posted by Sharon Tudor Isler, TWO Generations Serving ALL Generations (ERA Landmark Real Estate) almost 8 years ago

Some people just don't get it!  If the Seller doesn't HAVE to sell...then they will not talk to you on your ridiculous offer...no matter how many times you come up by $5,000 increments!  At some point they just start to laugh at you...and your agent.

Your response to the Buyer(?) was eloquently put.

Posted by Jayne Williamson, REALTOR, Broker, GRI (Keller Williams Realty Mountain Partners, Hendersonville, NC) almost 8 years ago

As real estate agents we must qualify the people we are working with,so we can make an intelligent decision weather we want to work to achieve their goals or pass them on to another agent.  Many times you just have to let them go and concentrate your time to provide better service to your qualified clients.  Your overall business will be better in the end.

Posted by Larry L. wuethrich almost 8 years ago

Great post.  You presented very valid points and gave the "buyer" great options from which he could negotiate.

Posted by Dave Whittington - Ocean City, MD REALTOR, Associate Broker (Associate Broker - Mark Fritschle Group / Condominium Realty) almost 8 years ago

Not just a deal but to WIN at all cost.  Some people just want to play the gotcha game.  I find it with unreasonable demands on agents time.  If we can't be everywhere at all times then we are not good enough for them.  That is the kind of client I don't have to work with.  Just ask Barbara Todaro   http://activerain.com/blogsview/2057322/when-one-train-leaves-there-s-another-one-right-behind-it-

Posted by Marilyn Tolhuizen almost 8 years ago

This was really an interesting post.  Being in this business, we def see the dif types of buyers, and then being in this Economy, we are seeing a lot more types emerge.  I like the way you verbalized the situation and points that show the form of nego's!  Thanks for sharing and broadening my vocabulary with the dif types of buyers and agents that we encounter!

Marianne 

Posted by Marianne Infusino, RE/MAX - FLOW Area - 201 (RE/MAX HomeTowne Realty) almost 8 years ago

It sounds to me like you are trying to defeat the seller. EXACTLY! Why is it some buyers these days want to do nothing but punish the seller? I don't get it!

Posted by Cynthia Larsen, Independent Broker Serving Sonoma County, CA (Safe Haven Realty) almost 8 years ago

Great post!

Posted by Delores almost 8 years ago

Glenn, great points, merit or position along with your explanation for both your deliver a very clear point for each. I always size up my buyer's before working with them. There are lot of buyer's out there who want a deal and have no problem wasting every ones time... 

Posted by Susan Buhr, Real Estate Agent (PDS Real Estate) almost 8 years ago

Glenn

Good for you. Sounds like you spotted a lost cause right away and did not wast much time on it. Unfortunately not everyone else is doing that in these tough times.............Brad

Posted by Brad Hornshaw, Realtor, Listing Agent, Buyers Agent, Investments (Brad Hornshaw Realtor Lynnwood, Bothell, Everett) almost 8 years ago

Great post. We have the same issues all of the time when prospects call on foreclosures. There appears to be no shortage of unrealistic prospects. Most of them will continue to be prospects rather than purchasers.

 The colors of winter in Maryland. Life is good!

Posted by Roy Kelley, Roy and Dolores Kelley Photographs (Realty Group Referrals) almost 8 years ago

Glenn, great approach to explaining your negotiating tactics.  Being in the epicenter of the housing downturn, we receive many emails/calls from leads asking the same questions and not approving of our response/reasoning.  While it's hard at times to let them walk away, it's better for our health!

Posted by Dan Jasmer, Changing the way you look at real estate (Coldwell Banker Residential Real Estate) almost 8 years ago

Hey Glenn, you should've told him you have a very special way of approaching a situation such as this - you request a meeting with the seller and then you "make him an offer he wouldn't be able to refuse."  ;-)  Of course, he'd only get it if he's seen The Godfather.  LOL

All kidding aside - this is a great post!   

ETA: Although from what you describe, he probably would've jumped at that idea and hired you on the spot.  That would not have been good . . . 

 

Posted by Sandy Fenton, ABR, ASP, CDPE, GRI -Westchester NY - Condos to Luxury Homes (Keller Williams NY Realty * Licensed Associate Broker) almost 8 years ago

The best part of our business is that we can choose who we want to work with!

Posted by Anonymous almost 8 years ago

This reminds me of the short sale "buyers" who used to call me. They were working with a company that would do all the negotiation for me? remember those? they went away in my market...there are no homes selling for 50% of their value....or less.

I love the professionalism and patience you took with this person...I like your approach, something to remember with a real buyer.

Posted by Karen Fiddler, Broker/Owner, Orange County & Lake Arrowhead, CA (949)510-2395 (Karen Parsons-Fiddler, Broker 949-510-2395) almost 8 years ago

Great Post, I love your negotiating ideas regarding position or merit.  Cudos for walking away!  Time is of the essence in our buisness and we do not have time to spend on those folks that are not seriously looking to invest in real estate.

Posted by Marti White almost 8 years ago

Sounds like we were working with the same buyer!  I have one just like that in northern Michigan.  While he tries to steal the deal, the market is passing him by and interest rates are rising.   Thanks for the great blog.

Posted by Chuck Gollay (Exit Realty Paramount) almost 8 years ago

Glenn, this is the true definition of a tire kicker.

Posted by Stephen L. Pestinger (NAI Sullivan Group) almost 8 years ago

You handled this very well and professionally.  Good foreclosures that are reasonably priced go very quickly in my  market.  Someone making a low ball offer never gets the deal.  Being a builder's wife and knowing how people sometimes try to take advantage of the seller makes me appreciate your take on negotiating that considers the seller. 

Posted by Marsha Cash (RE/MAX Advantage) almost 8 years ago

The word negotiate doesn't even apply with this guy. Negotiate implies a back and forth process of coming to agreement.  That's not what he's looking for.  He's a good one to pass up.

Posted by Karen Crowson, Your Agent for Change (Coldwell Banker Residential Brokerage) almost 8 years ago

So many great comments.  I wanted to tell you that I love your choice of words.  I am going to print, and reread to work the dialogue into my brain.  I think he was interviewing you, you did a great job of explaining your style. it obviously didn't match his style and it was for the best that you parted ways.  Really good post! 

Posted by Navona Hart, Selling the Best Properties in CentralVirginia (Real Living Cornerstone) almost 8 years ago

Glenn you answered his question very well and I'm sure he is now wasting someone else's time instead of yours, thankfully. I'm sure.

Posted by Erika Hansen, CRS (Coldwell Banker Mid-America Group) almost 8 years ago

I had a buyer call me up, after making an offer on a 1.2 million dollar property wanting an inspection $200.00 less than my posted fee schedule. I learned a lot from your above post!

Posted by Fred Sweezer Sr., Certified Home Inspector (Hud Certified 203K Consultant) almost 8 years ago

I've cleaned house of my bottom-feeder clients over the last year.  As our market has improved to the point of investors diving in for the decently priced properties, give-aways for the most part don't exist.  Once I figure out they're that type... and it doesn't take long... Buyer fired!

Posted by Chris Jenkins-Sarasota Realtor, "Expect Success" (PalmerHouse Properties) almost 8 years ago

A lot of buyers are list-price sensitive. In this environment dominated by short sales in which many listing agents under-price to generate interest and offers, it's imperative that we instead educate our buyers to focus on value.

Posted by Brian Bean, Homeowner Advocate, Dream Big Real Estate, S.Calif (The Dream Big Team at Realty ONE Group Champions) almost 8 years ago

Glenn, a very cogent discusion of negotiating style.  A foolish buyer who did not listen to you.

 

Posted by Margaret Mitchell, Seacoast Maine & NH Real Estate (Coldwell Banker Yorke Realty) almost 8 years ago

Glen, this is priceless! I'm going to keep it as a reference piece!

Posted by Chrystal Safari Roy, Luxury Property Specialist (Real Estate Realty LLC - Charlotte, NC) almost 8 years ago

Glenn, perfect way to present that to him.  Sounds like the type of buyer that will sue everyone afterwards because it's not what he thought it would be.

Posted by Pat Rentz (VIP Inspection Services Inc) almost 8 years ago

wow! This is the best explanation I have read/heard.

Thank you so much for making my day!!!

Posted by Jeannine Willis (Keller Williams Realty) almost 8 years ago

Terrific post Glenn. I like how he wanted to know how you would "make" the seller sell the house for a ridiculous price!! Good job on not pursuing him. Definitely would've been a whole lot of wasted time.

Posted by Scott LaMantia, GRI (McColly Real Estate) almost 8 years ago

Hi Glenn

I too love your description of negotiation - position vs. merit.  I have had my share of bottom feeders.  My broker buys many houses at auction, and I think that's the place for bottom feeders to go.  The commsiion split for buyers agents at auction sites is typically very low, so I don't want to go there.

Posted by Karen Steed, Associate Broker Haralson Realty (Tallapoosa, Bremen, Waco, Buchanan, Temple, Carrollton) almost 8 years ago

Glenn I thought this was an excellent blog!  Thank you for sharing.  You provided some valuable insight on how to deal with what I have found to be a tough question. 

Posted by Lucille Botos (Lighthouse Properties) almost 8 years ago

It is amazing to see buyers expect an owner to drop prices significantly.  The panic of 2008 is over.  Prices are beginning to stabilize.  There are enough sales to find a reasonable market price for just about any property.  Some owners may be willing to reduce further than you expect, but that is the exception, not the rule. 

As to your second point, it seems there are many buyers in the market that will not take the word of the first, second, or third realtor they speak with.  These buyers need to hear facts about the market condition from multiple realtors before the believe what you told them to begin with.  No matter what you say, they were most likely going to move on to someone else. 

I like your approach to the question.  Will remember it the next time a buyer asks me to lowball.

Happy New Year! 

Posted by Nathan Reeder, @PropertyMan219 (Reeder Companies LLC) almost 8 years ago

What an eloquent response to this buyer.  I have a feeling he will be going through many agents and offers and will not be happy with anyone.  He will either learn the truth (we're dealing with multiple sellers with differing motivations, personalities & emotions) and get real or he'll fade away.  Best to have been honest with him and good thing for you he didn't care for your answer.

Posted by Judy Orr, SW & Near West Chicago suburbs (HomeSmart Realty Group) almost 8 years ago

"...not a buyer at all, didn't like my idea that we try to work with a plan that would accomplish the goal of closing a sale. He seemed to want a negotiator who would help him make it fail....

Concerning some buyers; wiser words have not been spoken...thanks!

Posted by Karl Hess, on The Jersey Shore (Keller Williams Shore Properties) almost 8 years ago

Being raised by depression era parents in the Midwest, I too am frugal and like a great deal so I have to be careful not to project that on to my clients who just want a great house.  Most my first time home buyers however want a "deal" since they have been researching and on web sites for the past two years! We have discussions about price and "paying too much".  What usually happens is that we lose a few homes in the beginning and then they wake up and see the light and realize that they need to step up to the plate.  We still have multiple offers on most any well priced home. 

Posted by Ann Wilkins, Oakland, Berkeley, Piedmont CA (Golden Gate Sotheby's International Realty) almost 8 years ago

Glenn;

This is a great post about negotiation and the different posiitons.  Sometimes it helps you to fire a propsective client.

Posted by Fred Gregory, CRS, Broker/Owner DRE Lic.#00899603 (Avalar San Diego DRE Lic.#01270959) almost 8 years ago

WOW! I really liked your response's to the buyer. They were not only well thoughtout and articulate, but honest as well. I can tell from your conversation that you're a real "Realtor" helping individuals make meaningful and informed purchases and not just looking to make a sale. That person was not looking for someone with your integrity and experience. They were looking for a yes man. I applaud you and I wish there were more professionals out there like you. 

Posted by Dinorah VanWey almost 8 years ago

Right now...I use the CLYDE BEATTY approach.

A whip, a chair and a gun...will help.  (google Clyde)

Tom Waite

Posted by Tom Waite, So Cal-Apartment Bldg Investments (Thomas Waite Real Estate Broker) almost 8 years ago

AWESOME! I can't tell you how many people I have come across like this.  They completely disregard the qualities of a home (i.e. location, condition, neighborhood, etc.) for a few thousand dollars (a minimal impact if financing).  Unfortunately, there will always be those media outlets that create fear and unrealistic expectations.

Posted by Colin Stevens (eXp Realty) almost 8 years ago

Some people just want to win, and to beat the other guy down. The idea of win-win does not appeal to them at all! Not the kind of people I want to deal with, and apparently you don't want them either!

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) almost 8 years ago

Very professionally handled, Glenn!  This person wasn't a "buyer", he's a "loser".  Did he ever produce a mortgage pre-approval, I'll bet not.  OH, I know, he was a CASH buyer, therefore that entitles him to a "50% discount"!  Don't waste your time with people like this.  Well done, Glenn!

Posted by Kathy Kenney, Realtor - Princeton & Central NJ Homes for Sale (Keller Williams, Princeton, NJ) almost 8 years ago

Well written and concise blog.  It contains a few concepts I had rolling around in my head but could never organize.  As an appraiser i feel compelled to negoitate from merit and assisiting the buyer and buyers agent to understand what has sold before and what a subject property may appraiser for in todays market.  Not often is it a very popular stand to make but if it cannot be loaned on it cannot be purchased in most cases.

Posted by Sean Railton (Park City Realty Group) almost 8 years ago

Great post... I think I will use that "position" or "merit" response... 

 

Posted by Lexie Longstreet (Savvy + Co. Real Estate) almost 8 years ago

There are always prospects that you are best walking away from and this may have been a good one to let go.  I do feel however,  at this stage in a relationship,  it is critically important to have these conversations face to face in order to fully understand where the prospect is coming from.  Most buyers today are afraid of paying too much and it is our job to provide them with enough information to make them feel confident in making their decision.  I would rather write a low offer (than no offer) and take it to a seller even if they have turned down the same price before.  You will then  know first hand where the seller stands.  Maybe they won't budge, but maybe you will find out they will take a lower price if they can stay in the home a little longer, have a quick closing or a longer one, or something else that makes their life a little easier.  They may not accept your offer, but they may come down way more than they had planned because it is no better than the previous offer.  During this time you might find out more of sellers motivation, such as not wanting to move until school is out, or  possibly they are running out of time.  In the end, the buyer throughout this process may see the value, may become more attached to the home, and may vell come up on his price.  Most of the time, if your present it in the right way,  a seller is not going to throw you out for a low offer, at least you brought one. If you explain it to the seller from the buyers side, it is pretty hard agrue with.  If the buyer loses this home and has not found another, then they are going to be way more educated. At least in my market, both sides take an extreme amlount of educating.  If it was a good prospect, I would hate to lose out.

Posted by Terry Shumway almost 8 years ago

Interesting blog,  the comments. Varied approaches to negotiating have always been a skill that is constantly honed, like you would an axe or a knife My late Father always said in negotiating, you hve to leave the other guy  "something!"  It takes two to tango and we strive always for the right rhythmic and let each side  know that this is a partnership.

Oh yes, I've found that a lot of Agents are only thinking about the money, not the journey that a succesful sale wil take them on.

Posted by stan albert (Remax Premier Inc. Vaughan Ontario) almost 8 years ago

It sounds like he was starting out by negotiating with YOU. Once that negotiation is finished, then you can start on the sellers -- if you wanted to!

Posted by Thomas McCombs (Century 21 HomeStar) almost 8 years ago

It's people like this that are making me really tired -- Get a grip - it blows me away that someone would buy a house to get a deal rather than buy a house because it's the right house for them.  I don't mean that you have to over pay just because it's the house you want, but come on... let's play nice.

I agree with some of the other commenters - don't work with this guy.

Posted by Jennifer Blanchard, No Obligation, Just Information (Weichert, Realtors) almost 8 years ago

Just like a lot of buyers today, they want a 'deal'.  There are deals to be made but you cannot get a seller to fold and give the house away. If he didn't sign a buyer agency aggreement with you, he doesn't deserve your services.  I have had a few of those and I've written them off.

Betty Bart

Fine Homes in 905

Posted by Betty Bart almost 8 years ago

I love your explanation of the negotiating process, AND the discussion you generated! I've had a couple of these buyers and they really did spend a lot of my time with no results. But some learn after the second or third failed offer...

Posted by Jan Stevens (Coldwell Banker Pittsburgh) almost 8 years ago

Great summary of the motivations behind a buyer.  Thoomas said it well...he was negotiating with you first, and until that is agreed upon, you can't negotiate with the seller.  A classic example of a client you don't want to work with in most cases.

Posted by Brad Yzermans, Temecula-Murrieta-Menifee FHA/VA Mortgage Lender (First Time Home Buyer & Down Payment Assistance Specialist in So Cal.) almost 8 years ago
I've met those types of buyers before... Good job on letting him go. One of my resolutions is not to show anyone homes unless they sign a buyer-broker agreement with me!
Posted by Paul Armstrong, Serving Orange County & The Long Beach Area (Realty Network) almost 8 years ago

Yep, I recognize the conversation. If someone is trying to pin you down to specifics--without providing specifics in return--I have generally found them to be a 'time waster.' 'Time wasters' are the enemy of productivity and deserve no more attention than what you provided. Good handling of the situation.

Posted by Holly Weatherwax, A Great Real Estate Experience ( Associate Broker, Momentum Realty) almost 8 years ago

This is the type of prospect we all need to run away from. They will eventually find a realtor who wants to beat up the seller. I wish them a loooooooong and happy relationship. Somehow I doubt that they will be happy together.

Posted by Jack Fleming (Weichert, Realtors) almost 8 years ago

Great post, you spent way more time than I would have... there are so many wana be players out right now who think they are going to get the deal of a lifetime... hell I sold and boought those during the peak... those come once in a blue moon and you better be ready with cash and fast close... to many of the buyers who say they are investors but act like first time buyers... all scared..good for you... you handeled it well... Oh and like how you called the merit option... I might start using that...good term

Posted by Connie almost 8 years ago

Glenn,

Thank you from the bottom of my heart for outlining the merit/position negotiation choices. I haven't been able to articulate this for myself, but now I can relax and know what I am dealing with - not only with buyers, but with other agents. This is one of the most valuable posts I've read.

Thank you again,

Roseanne

Posted by Roseanne Campagna, Kent/DesMoines/Blk Diamond/Renton/Maple Valley, WA (John L. Scott RE Maple Valley, WA ) almost 8 years ago

Wow Glenn what a professional you are.  You really spelled it all out for him.  Kudos for you for taking the time to do that.  There are a lot of agents that just would've ignored the email.

Posted by Tni LeBlanc, Realtor®, J.D., Tenacious Tni (805) 878-9879 (Mint Properties, Lic. #01871795) almost 8 years ago

Fabulous post, and you certainly show a lot more patience with this than I would.  My answer to the first question of "how" would have been "it depends, what do you need? I can answer your question, as soon as you answer mine."  LOL!  To me he sounds like someone who has a need to dominate, both in the purchase process itself, and in being able to brag later about how he did so.  That's great, let him brag, as long as he give me something to work with from the get-go.  I should learn more patience.  After all, you have the Featured post, and I don't!  :-)

Posted by Victoria CB Trees, Principal Broker (Crater Lake Realty, Inc.) almost 8 years ago

Glenn, I am impressed with the way you handled this: very professionally. This guy obviously didn't get how lucky he'd be to have you as his agent. He sounds to me to be a "bottom feeder" and a heck of a time waster and I think you deserve better anyway. Good that you let this one go...I would have, too.

Posted by RhondaHeaslip NanaimoRealEstate (RE/MAX of Nanaimo) almost 8 years ago

Glad to have seen this one, Glenn.  I'm in a similar situation and this helps tremendously.  Thanks.

Posted by Roger Johnson, Realtor - Hickory NC Real Estate (Hickory Real Estate Group) almost 8 years ago

Yep, you sre spot-on Mr. Roberts,  and the low-ballers & deal-of-the-century buyers either wake up listening to my advice or I tell'em don't let the door hit'em in the hiney on the way out.

My time & expertise are valuable and I don't waste my resources on someone who doesn't want to listen.

Posted by Anonymous almost 8 years ago

Glenn,

The breakdown of position and merit is very well thought out, simple and to the point. I will have to incorporate that.

Did this would be buyer at any time make clear, whether or not he was going to live in the house or was he an investor that would rent or flip the property? He sounds like the same guy who would then ask you to do it at 1% percent because after all, all you're doing is filling out some "paper work"...You're fired!!!

Posted by Dimitri Matsis-REALTOR® (818) 599-6083 (Troop Real Estate Inc. Westlake Village CA) almost 8 years ago

You stayed with him longer than I would have.  He walked, you held the high ground!

Posted by Robert Courtney, Century 21 All Islands, RA, CDPE, MCRE, CIAS almost 8 years ago

Fantastic post!  I think you explained negotiations perfectly and put into words what most of us would have difficulty putting into words! I've printed your blog and will use it as a reference if ever faced with the same type of client. Bravo and thanks!

Posted by Denise Sproull, Prince Albert, SK Real Estate (Century 21 Prestige Real Estate) almost 8 years ago

Nice Post, Glenn!  Very well-thought out insights on negotiation!  

Posted by Fred Glasser, SFR - Keller Williams Realty - Cherry Hill almost 8 years ago

Glenn, Very well put! I would agree with you not to invest too much time with this person. It sounds as if he is interested in stealing a home not buying one. I love the way you phrased it.  You came across as knowledgeable, asked the client leading questions, and ultimately gave the client the choice on how to proceed.   Some folks still think they don't need us - your time is better spent with a qualified client who appreciates your expertise.

Posted by Catherine Marrone, West Newbury MA real estate, Essex County (Integrity Residential Brokerage LLC) almost 8 years ago

Great Job framing the process Glenn. Even if he didn't listen to your advice!

Posted by Derek Wood almost 8 years ago

I like the way you worded it between Position and Merit. Why does everyone think "All" sellers are in trouble just because a few are? I've listed a home well below market value and shoppers still lowball us even more thinking the seller should accept anything. I don't understand the mindset of the general public.

Posted by Tony Hager, Broker (United Realty Texas) almost 8 years ago

My guess is that if a price would have been agreed to the buyer would have felt he overpaid and backed out.  What the bottom feeders don't understand is that well priced properties are getting multiple offers today.

Posted by Simon Mills (Mills Realty) almost 8 years ago

Sounds like you are a well trained negotiator. I took a negotiations course a year or so back and your methods of trying to see what everyone's needs are was a big part of learning how to be an effective negotiator. The company that offers the course has an active rain member(#61 in your comments) Tom Hayman. Good course.

Posted by Tommy Taylor, CNE- Texas Hill Country Realtor (Taylor Properties & TexasForSale.net) almost 8 years ago

Wow, Glenn, I think they've cloned this guy! Good points, and good way of qualifying so as not to waste anymore of your time.

#53; good points as well. How on earth do you sell in NYC? I guess we'll find out with the new reality show...

Posted by Lisa Wiseman (Intero Real Estate Services, San Jose, Silicon Valley) almost 8 years ago

You handled him with aplumb....

Posted by Kimberly Brandon, Broker/Owner (Smart Moves Real Estate) almost 8 years ago

You were very reasoned in your explanation to the buyer, and gave him more time than he deserved for his simplistic way of wanting to "get a steal" at all costs.

Posted by Carolyn Roland-Historic Homes For Sale In Delaware and S. Chester County PA, Carolyn Roland, GRI, CRS (Patterson-Schwartz Real Estate) almost 8 years ago

You did what any experienced and reasonable agent would do. You offered a couple of solid and different options that would work. This so called "buyer" was probably a flake anyway. That is how he sounded according to his questions. You are a good man for taking the time to explain the process and options. We all must watch out for these time wasting vimpires.

Best luck  

Posted by Michael Nugent, Sells Corona, Eastvale & Riverside (Prudential Califoirnia Realty) almost 8 years ago

I shiver with the thoughts of buyers gone by with this mindset.  You have class, Glenn!  I just dumped my buyers and moved on!  I like  your style...

Posted by Carol Tunis, Carol Tunis...a "HouseSold" name! (Florida Homes Realty & Mortgage) almost 8 years ago

Glenn, I like that you allowed for the fact that he may know more than you.  I often tell my buyers who have been out there for a while, "you probably know more about the kind of home you are looking for currently in the market than I do."  Not that I don't know the market, but often buyers today are hyper-knowledgeable about what they are buying.  What they are not, is experienced with negotiating in this marketplace.  Sounds like you are experienced negotiating in yours.

Posted by Rosario Rodriguez, J.D. - South Orange County Realtor (Aliso Viejo specialist) almost 8 years ago

Hi Glenn -  This came at a good time for me.... I received an offer for one of my listings today for $1.255M.  I knew the seller would balk and walk away since it was listed at $1.625M and just reduced to $1.5M; however, using this discussion of yours regarding "merit vs. bottom-line" we were able to come up with a very good response and counter offer.   I'll let you know how it goes.  Thanks for the great insite.  I agree.

Posted by Shanna Day Team Leader AZ & UT - Call 480-415-7616, Top 2% Of 185,000+ KW Agents Worldwide! (Keller Williams Realty EV (AZ) & Keller Williams SLC (UT)) almost 8 years ago

Good job of understanding the client and doing a lot of prequal.

Posted by Mike Henderson, HUD Home Hub - 303-949-5848 (Your complete source for buying HUD homes) almost 8 years ago

Mr Roberts, Thank you for sharing your recent experience. Your Conduct & Actions are indicative of a True Professional and elevate our industry standards.  

Posted by R Grodin almost 8 years ago

Glenn, if the buyer does not sign my buyer broker agreement, then he's not a client of mine, i don't waste time on people like that. That's how I negotiate. If he does, then while in my office we would determine what his buying objective is and develop a 'workable' and 'reasonable' approach that works. That's it, that's all.

Posted by Richard Bazinet /MBA, CRS, ABR, Phoenix Scottsdale. Sellers, Buyers & Relocations (AZuRE Team - Realty ONE Group) almost 8 years ago

Boy.....  I sure wish we could spot these sort of people by just looking at them!  They tend to waste a lot of our times... often before we realize how ridiculous they are being.  I sure get tired of wasting my time on people like who you are referring to.  Great post!!  

Posted by Lisa Rees, Coldwell Banker Reilly & Sons Real Estate Agent (Coldwell Banker Reilly & Sons) almost 8 years ago

They need to realize it is a compromise situation and it does feel good to also make the seller happy.  If not, they are just in it for themselves and it's definitely not fun working with someone like that.

Posted by Lisa Rees, Coldwell Banker Reilly & Sons Real Estate Agent (Coldwell Banker Reilly & Sons) almost 8 years ago

Last year I had a buyer tell me he wanted to buy a house but he would pay no more than 25% under the market value, and is ready to make as many offers as needed to reach that goal. His budget was $150k.

I told him my fee would be $100 per hour with a $1,000 retainer, and I would write as many offers as he wanted.

He didn't get back to me. Wonder why?

 

Posted by Bill Travis, Broker/Owner (Captain Bill Realty, LLC) almost 8 years ago

You have certainly struck a nerve here, Glenn.  Good for you for sticking to your standards.  Some folks just want someone to fight their battles for them.  Love Bill's comment above.

Posted by Kathryn Acciari, Brand Ambassador and Business Coach (Century 21 Real Estate) almost 8 years ago

Those were all good to suggestions. Unfortunately, a buyer that doesn't appreciate the value you bring to the process will never be satisfied, so it is best that he moved on. 

Posted by Richard Rosa, Exclusive Buyer Agent (Buyers Brokers Only, LLC) almost 8 years ago

Congratulations on Featured Post, Glenn

I saw this post when I was here the other day and came back to read each word.  I am so glad I did.  Lots of good stuff!  Keep blogging.

Posted by Mary Yonkers, Erie/PA Real Estate Instructor (Alan Kells School of Real Estate/Howard Hanna Real Estate) almost 8 years ago

Wouldn't sign a Buyer Broker agreement and appears to be a "real estate expert".  I'm surprised this clown...I mean fellow...needs any help at all in failing to meet his objectives!  :-)  

Posted by Tony and Suzanne Marriott, Associate Brokers, Serving Scottsdale, Phoenix and Maricopa County AZ (BVO Luxury Group @ Keller Williams Arizona Realty) almost 8 years ago

I think this may be one you are glad that got away.  People like this are no end of grief.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) almost 8 years ago

Glenn,

I appreciated your points on negotiation.  Makes a lot of sense!  Great post!

Posted by Eugene Adan, Carlsbad Real Estate (Adan Properties, Carlsbad, CA (760) 720-9710) almost 8 years ago

From POSITION or MERIT... great thoughts, Glenn. You are showing why it is our job to CONSULT, not just get the best price without looking at the package. Thx for the post!

Posted by Jay O'Brien, Kansas City : Social Media Guy (RE/MAX Revolution) almost 8 years ago

It almost seems that he was looking for such a deal and really didn't even care if the house was worth more or less, maybe he was looking to flip it.

Posted by Deborah Grimaldi, (401) 837-9633 (Albert Realtors) almost 8 years ago

Glenn;

Nice post, well explained.

Not all prospects turn out to be buyers.

"You can't lose what you never had."

 

Posted by Steve Fearon almost 8 years ago

Glenn your points were solid and logical. That might have been the problem. Mr. Negotiator wants to steal and that doesn't mesh with "solid and logical".

So many times we are taken advantage of for information but, I've changed my opinion of that very much over the years. You're inspiring a blog of my own, about being taken advantage of. It's not a bad thing.

Primarily you have to work with people that you like and he was not likeable.

Katie the Real Estate Lady

Posted by Kate Reilly Lund (RE/MAX Diamond, Realtors) almost 8 years ago

Glenn--Great post. Thanks for sharing your "negotiating styles". I'll be using that in the future. There is a huge difference in the way we negotiate for our clients. I know it how it works but this is the best way I've heard it explained.

Letting this "buyer" go was probably a smart choice! Would've put you through hours of work and ridiculus offers that more than likely will never go anywhere.

 

Posted by Jan Bradshaw, Specializing in Lake Greenwood for over 13 years. (The Bradshaw Group) almost 8 years ago

Glenn, I love how you answered his questions.  It is unfortunate that there are so many "buyers" like him out there who only want a deal.  They don't understand that mostly everything out there now is already a deal!

Posted by DeeDee Riley, Realtor - El Dorado Hills & the Surrounding Areas (Lyon Real Estate - El Dorado Hills CA) almost 8 years ago

David, I appreciate you saying so, and appreciate also all of the comments. Thank you.

Posted by Glenn Roberts (Retired) almost 8 years ago

In this tough market I want buyers who want the house not the deal. It is very satisfying to help someone get a home they love.

Posted by Dennis & Terri Neal, Your Home Sold in 45 Days or We Se (RE/MAX, Big Bear) almost 8 years ago

Yes, sometimes you have to ask your buyer "Do you want a deal or do you want a house?". Very rarely will the buyer get the home of their dreams at a bargain basement price.

Posted by Liane Thomas -Top Listing Agent, Bringing you Home! (BROKER Allison James Estates & Homes BRE 01885684) almost 8 years ago

I met that guy. In fact I met him a few times. He always looked a little different and used a different name ~ but I am sure he was the same guy.

These guys never actually buys anything. They just drain all the Realtors and keep looking for a better deal. The sooner we let them go the better for us.

Posted by Linda Christopher, Property Manager & Real Estate Sales almost 8 years ago

You handled that well. Buyers like this one are no fun to work with. It's all about getting a great deal, so they can brag about what a "great deal" they got. It's like a game and they have to win. They really don't care which house they get as much as how much less than asking price they got it for. I prefer buyers that are passionate about the home they buy. They appreciate your efforts so much more.

Posted by Jamie King, Sandusky, OH (Hoty Enterprises, Inc.) almost 8 years ago

An old mentor agent, who was my first realtor likes to put it one way, "The deal is more important than the house".

These kinds of buyers will be there a year from now, and have not bought. They are looking for the impossible deal. Even if they get something close, and it looks like its going forward, they'll likely continue adding conditions and concessions from the seller that it'll ultimately fail.

I've seen many such "buyers" out here in the past few years. You put it appropriately, that the buyer wants to defeat the seller, and get his way. Then, he'll walk away, feeling a sense of victory, because he made the decision, then go hassel some other seller & agent. Chance are, your guy here has already done this more than once.

Posted by Eugene Lew (RE/MAX equity group) almost 8 years ago
It is good you found out his intent before driving him around for a few days wasting time and gas.
Posted by Kenny Gays (Smoky mountain Real Estate Corp.) almost 8 years ago

Thanks Glen  loved the merit vs position ..... i like to ask my buyers, ( in a very empahtetic way),  if this was your house, and the seller was making this offer what would you think?  Sometimes it makes them step back for a moment and re-evaluate....sometimes. :)

Posted by Mike Miller almost 8 years ago

A really good post!  Your explanation was great.  Where those types of people are concerned you have to ask yourself if it is worth reducing your quality of life for how ever long it takes to get them in a home, or just say "No" and leave it open for better things to come along. 

You were very honest and patient and I think he missed having a great Realtor represent him.  Definitely his loss, not yours.  He eliminated himself.

Posted by Sheila Lawrence, Love where you live! (Coldwell Banker, Sebastopol, CA) almost 8 years ago

Glenn ~ Wow a very interesting strategy for negotiating with buyers in this market.

Posted by Sybil Campbell, REALTOR® ABR, SFR, SRES Williamsburg, Virginia (Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia) almost 8 years ago

I think you handled that perfectly.  I think your point of position/merit was brilliant!  As a Buyer Agent, I've had similar situations....  I will remember your words if I am unfortunate enough to encounter such a person again!  Thanks for sharing.

Posted by Carolyn E. Durkin, Realtor - CBR - Scituate, MA Real Estate (William Raveis Real Estate) almost 8 years ago

Glenn... GET RID OF THIS BUYER!!!  He will be wasting your time.  When buyer asks "How will you get the seller to lower their price"... run.  You represent the buyer... not the seller.  He is not negoiating, but bottom feeding.  Not the reputation I think you would have to have when it comes to future buyers.

 

Posted by Valerie Osterhoudt, ABR, Cromwell, CT Real Estate ~ 860.883.8889 (Johnson Real Estate, Inc.) almost 8 years ago

Interesting post. you came up with more reasons for the differences in waays people negotiate than i had ever thought about.  Thanks for a different perspective.  margaret C.

Posted by Margaret C. Taylor, St Marys/Calvert/Charles MD Real Estate Agent (Century 21 New Millennium MD) almost 8 years ago

I always ask these people what their motivation is. What are they trying to accomplish with this deal? The vast majority of these people are time wasters. My time.

Posted by Wayne B. Pruner, Tigard Oregon Homes for Sale, Realtor, GRI (Oregon First) almost 8 years ago

Great lesson for all of us. Thanks!

Posted by Bob Sweazy (Prudential A. S. de Movellan Real Estate) over 7 years ago

Excellent descriptions of the various temperaments of the parties and their needs, and an excellent written response to a potential buyer to determine that they were not a good fit for your business.  Thank you for defining things so well, it is helpful!

Posted by Robert Adams (Keller Williams Realty, South Tampa) over 7 years ago

Participate