How NOT to negotiate

Cara Ameer, a top-producing broker associate from Northeast Florida, writes about working with buyers and sellers, sticky situations and real estate marketing in her regular Inman column that publishes every other Wednesday.

After showing a buyer homes for months or marketing your listing to the ends of the earth between broker open events, multiple open houses, a national social media campaign or otherwise, the moment of truth has arrived: A buyer put pen to paper (probably more like electronic signature to their laptop screen) and made an offer.

Although the offer might be lower than where you had hoped your client would start, from a buyer’s agent’s perspective, you’re optimistic for what the negotiation might bring in, reaching an acceptable middle ground between the buyer and seller.

If you are the listing agent, you review the offer with trepidation as you might be facing an uphill battle with your sellers (and most times, that is the case) if it is anything less than full price, and even then, depending on the market, they might be disappointed because they didn’t get anything over full ask.

Bell ring please. Is now the time to don the boxing gloves and get ready to rumble for Round 1? Or in lieu of the bell signaling Round 1, should the sound of wind chimes ensue to calm everyone’s nerves and soften the seller’s reaction before going back to the other agent?

My vote is for option two. I’m of the belief that a bird in the hand is always worth two in the bush.

Here are 11 things you should never do when negotiating an offer:

1. React

Good, bad or indifferent, an offer, no matter how low, is not the time to chastise the other agent or their clients, nor give a hypothetical over-hyped reaction from the seller who has not yet even seen it.

Even if the offer is great, it’s not appropriate to start celebrating receipt of a commission check that might never be inked by the closing office. You never know what might be in sellers’ heads, depending on the day or time an offer is presented.

They could be having a great day or a terrible day, and what you think should be a “slam dunk” as far as accepting it, might have them wanting to use that as leverage to run down every buyer who ever looked at the house to see if anyone else will put in an offer that is more.

The worst thing an agent can do is create any sort of expectation of how that offer will be received and what the response might be.

2. Make assumptions and posture

Avoid making statements such as “There is no way the seller will even entertain that,” “You’ll need to come back with something much stronger,” or “I cannot bring that to seller.”

My favorite is: “The seller had an offer that was much higher before.” OK, so where is it, and why didn’t that materialize into a closing?

While sellers have every right to reject any offer, a surefire way to turn off a buyer who could turn into the next homeowner is to come across with an assumptive attitude as to what will and will not fly.

Agents are legally and ethically obligated to present all offers unless the seller has instructed the agent in writing on handling offers below a certain price point, etc., and even so, the agent should err on the side of informing the seller of the offer because circumstances change, time marches on, and the market — not the listing agent — dictates what it is willing to pay for any home for sale.

3. Act as the decision maker

There is nothing worse than when one agent tries to get the other agent to agree about what their buyers or sellers will do before they’ve had a chance to relay and present the information to them.

They love to say, can you get your customer to agree to (fill in the blank) price or terms because that is what the seller is willing to do.

They also want to dictate all else in the transaction before anything has been agreed to, such as where the buyer’s binder deposit must be held, what items can stay or go, whether the seller will pay for a home warranty or whether they will be doing any repairs, despite nothing being mentioned about the property being sold in its present condition.

They love being the bully, trying to intimidate and using strong-arm tactics to bend things their way.

4. Be offensive

Don’t say anything that could offend the other agent or their buyers or sellers.

Statements such as, “The property has been on the market so long, there must be something wrong with it — that’s why the buyers came in where they did with their offer.”  Or, “The buyer saw what the seller paid for the home just two years ago, and there’s no way there’s been that much appreciation nor could the house be worth nearly what you’ve priced it at.”

What’s worse is questioning whether the buyer is legitimate or serious based on the offer was made (assuming a proper lender letter or proof of funds have been provided).

5. Shut it down

There is nothing worse than entering into a negotiation in good faith where sellers barely counter, the buyers start to get discouraged, yet make a decent counter or two — and the seller refuses to do anything else.

The listing agent reinforces the sellers’ stubbornness by saying “The seller doesn’t have to sell.” Funny how all of those “sellers that don’t have to sell” houses remain on the market three months after the original offer was made — one or two price reductions later with open houses nearly every week.

Instead of reaching back out to the buyer who was sincerely interested in their home but got turned off by the seller’s refusal to negotiate, the agent does every thing else but that.

The additional efforts give them a false sense of aggressively marketing the property to appease the seller, but in reality, they are simply throwing darts at the wrong dartboard as the buyer who really wanted to buy is in front of their face!

6. Be the messenger

A surefire way not to negotiate is to simply play messenger, relaying whatever the buyer or seller says without any input or effort to facilitate a response that will work toward closing the gap with the other party.

Buyers and sellers want to be led to good decisions. They might not recognize it until it’s offered, but simply repeating buyers’ or sellers’ sentiments might not make sense as it only alienates the other party.

7. Forget problem-solving and creativity

Speaking of playing messenger, there are many transactions that never come to fruition because the agents refused to put their heads together to figure out how to bridge the gap between the buyers’ and sellers’ wants and needs.

There are multiple ways to accomplish this with regard to an agreeable purchase price relative to the closing date, closing costs, interest rate buydowns as well as things that could be included or excluded with the purchase of the home, a home warranty, professional cleaning, etc.

Keeping the emotion and posturing out of it with the buyer and seller will help to position the negotiation from an objective point of view to work toward a set of mutually agreeable terms and conditions.

8. Serve as an armchair expert

A great way to start building walls during a negotiation is to speculate about all that is allegedly wrong with the property. The selling agent knows that the roof is old and will need to be replaced, the electric is bad, and there appears to be a foundation issue.

While some or all of this might be true on some level, it’s best left to the experts to determine during inspections and then broach the seller with tangible findings from the due diligence process.

On the flip side, a listing agent attempting to minimize any potential issues that are visible or documented from inspections does not help the situation.

9. Be vague

When parties are vague, doubt creeps in. When one agent’s response to another agent’s questions regarding information on the seller’s disclosure, or lack thereof, is not clear or continually avoided, it can create a sick feeling wondering what the sellers and listing agent may be trying to hide.

That doubt can lead to negotiations to stall until the buyer and the selling agent can do their own investigation to get to the bottom of whatever they need to know.

10. Squeeze out every last drop

There is nothing worse than finally getting everything worked out and then one party insisting on trying to squeeze the other for a few more things.

My favorite is: “Would the sellers be willing to leave the patio furniture (never mind that was never mentioned in the course of the negotiation)?” or “How about those flat screen televisions and the sofa too?”

As if these things have no value to a seller with no regard for their need for them wherever they are going. After all, it’s only money and not a big deal for a seller to have to go out and buy all of this again, right?

While a buyer might not think this is a big deal, this move creates a very bad tone to start of a transaction as they are left to wonder what’s next?

11. Make ‘one more’ change

To the above point, once all gets worked out, the seller insists on changing the closing date because they realized they won’t be in town for the closing.

Newsflash: Are sellers ever in town for a closing anymore, let alone buyers? The sellers certainly have the option to pre-sign, but the sellers refuse because they don’t trust anyone or anything, never mind that this is not their first rodeo selling a property.

This one can wreak havoc as the buyer explained through their agent that they would not be available to close until the particular closing date and that was why it was requested upfront.

The lender has made it clear that it cannot guarantee making the closing date a week sooner, and while the seller might hear this, I’m not sure they are really listening.

Perpetual pushback about a closing date can wreak havoc on all involved, particularly when external circumstances cannot be changed and agents are not working on getting everyone to compromise.

When I’m in the middle of a negotiation, particularly a difficult one (and it seems they are all difficult for different reasons), I often turn to this quote I came across several years ago from the late Barry Schwartz, vice president of network management, Blue Cross Blue Shield of Florida: “Agreements are always a matter of compromise. As a general rule, most sides wind up with not quite what they wanted, but something they can live with.”