Do You Want to Negotiate or Buy a House?

By
Real Estate Agent with Keller Williams Capital Properties

(BETHESDA REAL ESTATE)

Bethesda Real EstateSome folks are just great negotiators.  That's a good thing, right?  We all want to get the best deal possible and feel like we won.  Depending on the circumstances, you can negotiate yourself right out of a home with this strategy though.  I know. I've been through it often enough lately...

Here's how the conversation goes:

Client:  I am going to want to really negotiate for this and get the best deal.

Me:  That's great.  What area are you looking in and what kind of price range?

Client:  I'd like something in new construction in Cabin John for under $950K

Me:  You realize there are about 10 sales per year in that location and much of those are for new construction well over $1M?  There is not that much property that fits your specific needs.  This particular home is not likely to come up again anytime soon and it's under priced right now.

Client: But this is a depressed market and I want to get the very best deal possible.  If we can offer $750K do you think they'll take it?

Me: :(

I wish I were making this up.  The folks lost this house to another buyer who listened and made the right offer.  Those buyers are now living in a beautiful newly constructed home that was a screamin' deal!

The national press would have everyone believe that all homes are in foreclosure, all sellers are desperate and you'll pay pennies on the dollar for a house.  Now, I grant you that there are many opportunities for good buys out there.  I've gotten them for my clients - even when I was shocked the seller would take the deal - but the reality is that when buyers start to narrowly define their wants they can find that there is really not that much inventory from which to choose. 

As soon as that happens the shift in strategy needs to be taking place from wanna deal to wanna house!  The goal is a home, not a contract writing exercise.  If there are fifty properties that suit your needs, let's write!  But if there is one home, you have more at stake and should be working towards a winning strategy not just trying to prove that you're a better negotiator.

He who has the house wins.  Not the one who writes the most contracts...

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If you are looking to buy or sell a home here or in one of the other lovely surrounding Bethesda real estate communities, please start your search by calling me, a Bethesda Realtor. 

Search here for all Bethesda homes for sale

Bethesda homes for sale

Serving the Greater Bethesda real estate, Chevy Chase, Potomac, Kensington area communities and other surrounding areas.

I'm available to help you!

Josette Skilling

Associate Broker
Keller Williams Capital Properties
801 D Street, NE
Washington, DC 20002
Cell: 301-385-9213
Office: 202-243-7700

Email: j.skilling@verizon.net
http://bethesdabuzz.com

Copyright © 2010 by Josette Skilling

Bethesda Real Estate

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Rainmaker
92,016
Lynn Johnson
Owatonna, MN Real Estate
Coldwell Banker Home Connection
Josette - Thanks for a very timely post.  I wish our prices were similar to yours, but the buyer behavior is the same.  Many realistic sellers have been put through the ringer just trying to get something close to a reasonable offer.  The media is certainly adding to the buyer mentality that they'll only buy something if they can get it for a "bargain" and only on their terms.  I know it'll change again - I hope sooner rather than later.
April 01, 2008 09:47 PM
Rainmaker
104,198
Josette Skilling
Keller Williams Capital Properties

Matt, they are simply hovering around waiting to see what happens and generally end up losing out to another buyer.  I've had tons of interest on a listing I have as well and one offer with another hovering.   I'm watching all the price reductions and frankly I think they are playing into the lack of buyer movement because they know if they wait we'll just reduce.  Finding that right price point it just really hard right now!

Bob, it's funny that no matter where we are the buyer behavior is the same. 

Lynn, humans don't seem to change their behaviors in any price range!   I love how you see that sellers have been put through the ringer for this process only to have buyers still want something for nothing.  Don't get me wrong.... I do think prices need to come down, but in many cases even where they've done so buyers still don't see the value and can miss out.

I wrote a full price offer immediately upon a listing coming on recently. Why?  Because it was priced superbly and my buyer recognized that fact and moved immediately!  What a pleasure... 

 

April 01, 2008 10:25 PM
Rainer
13,403
Nathan Cook
BCR (Brazosland Classic Realty)

Well stated, Josette!  I like your thought, "the shift in strategy needs to be taking place from wanna deal to wanna house! The goal is a home, not a contract writing exercise."  To purchase is to commit.  At times, buyers are hesitant to commit because of all of the choices out there. Scratching out the least desired homes first is a good idea, so they can see what they have left. 

June 20, 2008 04:32 PM
Anonymous #34
Anonymous
Ian

I accidentally came across this blog and I found the comments of the agents quite insightful.  For a full disclosure: I am a potential buyer myself (in Potomac, not in Bethesda).  I've learnt that working with buyers or sellers can be difficult in these times and I agree tthat each agent has the right to refuse to work with someone with unrealistic expectations.  

However, with the benefit of perfect hindsight, I agree with the one comment that pointed out that price increases far exceeded income growth in the recent past.  (This might explain some of the very different expectations of some buyers and sellers.)  And also with perfect hindsight, it seems to me that home-buying was a media headline back when house prices shot up and now when the house prices are coming down.

As a potential buyer, I'm wondering what the expectations currently are- one year after the original post.  Is ithe divide between buyers and sellers still so large?  Do sellers still expect their house to sell at 2006/7 prices?  Are buyers still low-balling?  And, my apologies for this question: are they any more successful? 

February 23, 2009 01:42 PM
Rainmaker
104,198
Josette Skilling
Keller Williams Capital Properties

Ian,

There will always be a divide between buyer and seller as their goals are usually at odds with each other.  I don't think it's so much that sellers want a price from any year so much as buyers are still treating the market as a one place, not as a micromarkets within each city and neighborhood.  Taking the Case Schiller reports and just applying their pronouncements across the board means that you'll miss the trends that exist in the very local area you are considering.  Or for that matter any pronouncements that are made globally.

A year later I wouldn't say this is any different than it was.  I had a recent sale in Bethesda where the folks were working with an agent originally who was a family friend.  They were looking for a very specific price range, in a very specific area that fed a school and wanted enough room to make no more moves until they downsized.  They were told they had all the time in world and could make decisions in their own time.  Two contracts later as they were outbid they realized that wasn't working for them and we began to work in earnest on getting them a home.  Did they pay full price?  No, but they did have to work yet again with a multiple offer situation and structure their contract to be the one the seller took.   It's basically the same scenario as I described a year ago...  Once you have decided where you want to be and find there are very few homes that meet your criteria you need to be focused on getting to your goal, which I assume will be a home.

By understanding the trends in the marketplace you are considering you'll be very well informed as to whether or not a low offer will work for that particular home.   With good advice and a very sound understanding of what homes are going for (or not) in any area, you can make a reasonable offer which one could expect to get through.  I have no crystal ball so I'm unable to say what sellers will and won't take so I always say write something!  But if you just continue to write very, very low offers and get no where with them, then it's time to change your strategy to one of writing contracts to get a home not just use the time as a contract writing excercise.

I wish you luck with your purchase.  I'm happy to help you decipher the market should you find you need that help.

Josette

 

 

February 23, 2009 03:24 PM
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Rainmaker
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