Our jobs as real estate agents is to try and keep the situation under control and emotions out of the negotiations so that the parties can work towards a harmonious conclusion. Usually that is a sound strategy and works great. Well, it works great as long as both buyer and seller are interested in a "fair market" value outcome for both sides.
The strategy doesn't work so well however if one side or the other is either a "winner takes all" personality or if the buyer's agent has allowed the buyers to look at properties priced above their approved range in the misguided belief that sellers are still willing to consider offers 30-40% below list price. Those buyers and their agents are in for a long and disappointing ride.
At least that's the case here in Western North Carolina. Unless a property is brutally blemished, it has been a few years since we've seen evidence of properties going for sale at such bargain basement prices. More and more often, properties are getting full price or close to that if the sellers' agent guided them right in the beginning. It has also been quite some time since the norm in pricing was unrealistically high. (although a few of those do make it onto the market)
It is all about setting reasonable expectations in the beginning with both buyers and sellers. We as agents have this law that we must work under stating that we must present all offers. Okay, we can do that. If your buyer insists on offering 30-40% below the list price and adding to that a laundry list of concessions on the sellers' part, I sure hope you've prepared them for what could be my sellers' response. My seller wants to sell this house and I want that for them. Believe it or not, I'm even going to work really hard to keep the seller from ending the negotiations right then and there since we all know that often that first volley from the buyer is testing the water.
It's all about the tone of that first response from the seller. If they respond with full price and no concessions, yep...you've made them mad...move on. If they respond with a rejection and a suggestion that you try again, you have a chance to still negotiate a reasonable deal. If you are lucky enough that the seller responds with a slight price reduction and an acceptance of a portion of the requested concessions...this could be the start of getting into a new home. The buyer's next counter-offer will really set the stage for the possibility of reaching a mutually acceptable compromise. If the buyer insists on staying in the farthest regions of imagination, this isn't going to be the house for them most likely.
Usually when this scenario happens, it turns out to be the buyers aren't financially qualified for a house in that particular price range. The sad thing is that if their buyer's agent has encouraged looking in the out of reach price range, nothing in the buyers' own price range will be appealing to them. Not only is this a sad, sad story all the way around but a tremendous waste of time for everyone concerned.
This behavior typically harms the buyer more than the seller. More often than not, the buyer HAS to find a home...the seller already has a home. Looking for and buying a home is a lot of work...hard work. I'll never understand why some buyers want to make it harder on themselves.
From the agent's point of view though, all I can say is "What are you thinking?". Until there is a closing, all agents can expect is to spend money and time on a transaction. Encouraging your buyer to look way above their means is a rookie mistake and we've all done it. I haven't done it though since my first year in real estate when I realized everyone loses!
But hey, that was then and this is now. I'm throwing off the frustration from last week, my seller is already over it and we're both ready to tackle the world with renewed vigor. This is the song to get us moving, "Gimme Shelter" by the Rolling Stones. Bless their hearts, even when they were young they already looked like seasoned firewood. LOL.
Have a great week!