As a Realtor, one of the most valuable services we can provide our clients is our knowledge of the human element when it comes to a typical transaction. Over time in this profession, you begin to see patterns with how buyers and sellers will operate in most situations. And although it can always be surprising to see extreme situations where emotions or stress levels get the best of one or both parties, there is almost nothing that would surprise a seasoned Realtor when it comes to all the variables that come with a purchase or home sale.
One of the hardest questions we can answer for a client, is whether they are getting the best deal possible. For the most part, buyers want to know they are not overpaying and sellers want to know that they are not leaving money on the table. On our team, we have always been of the mindset that you give your clients the best information you can based on all your experiences, based on your conversations with the other party, and based on market statistics. Ultimately, a client must decide whether they will sign on the dotted line or test the waters further. Testing the waters can be risky. If you are selling, will you lose a strong buyer? If you are buying, will the seller wait for something better?
It’s an age-old question in many facets of life, “should I hold out for something better?” People come from different angles when dealing with the idea of negotiating. I had one high price point client tell me a few years ago that “you always have to be willing to walk away.” For them, it ended up working. A low offer we had written in July was finally ratified in November of that year. They were willing to simply wait out the sellers. My clients were in no hurry and, although they really liked the home they eventually purchased, they were not going to pay anymore than they originally offered.
I do this for a living and it’s hard for me to not get more emotionally attached than that when it comes to our family’s real estate investments. However, his words made an impression on me. And maybe it’s not the sales price that’s most important to you. Maybe it’s your comfort level with other contingencies, having additional protections in place, or maybe it’s the timeframe and other logistics needing to work out to be satisfied enough to ratify a contract. When my family bought and sold last spring, we were adamant about having a home sale contingency in our contract for our purchase. Although the house we owned at the time ended up selling in 2 days, it was a unique property, and I couldn’t be sure that it would ultimately sell that quickly. We would have been unwilling to remove that contingency to make the contract on the new house work. And yes, we would have been willing to walk away. We had walked away one year earlier when the sellers of a home we liked were unwilling to entertain a home sale contingency.
In a strong seller’s market, there comes uncertainty with when to take offers, when to counter an offer, when to accept an offer, and whether to hold out for something better. Although I lean on the market as an indicator of how to provide guidance to my clients, I’ve learned over time that I cannot predict anything with certainty. And personally, it’s always been my frame of mind to operate with what’s in hand. If you get a good offer after the first showing, should you wait through the open house to see if something better comes along? If you get 2 offers the night of the open house, should you wait until the next day to see if a third offer rolls in? I wish I could answer these questions with certainty, but the truth is, the human element is something I’ve learned to lean strongly on too, as much as market statistics.
Sometimes, you might get a better offer. However, in my experience, I’ve found the first people through the door to write an offer are typically emotionally attached to the house, eager, hopeful, and, assuming they have strong finances, will consistently make it to settlement with fewer hurdles. Obviously, the terms of their offer must be in alignment with a seller’s goals and needs. On our team, we have seen sellers lose those first buyers by waiting a few days to respond to the offer. Maybe another house comes on the market and the buyers withdraw their offer or maybe they get frustrated and all that hope turns to anger, and they just walk away. Or, maybe when you finally do ratify they have a sour taste in their mouth and decide to nickel and dime the home inspection report. Maybe you wait a few days, get a better offer, and the original buyers are willing to go up higher in price. That can happen too.
Decision making tied to money can be a recipe for a lot of stress. Humans are wired very differently too when it comes to how they prioritize protecting their wealth. Humans are also wired differently in terms of their own pride in negotiating. Personally, I think the only “art” to negotiating is the art of listening. If someone has been raised to negotiate lightly and mostly concede points to find harmony, they may be very sensitive to someone who is more brut in their negotiating style. Some of our clients thrive on negotiating and others feel beat down by the process. Some clients will be happiest to know they have maximized their profit and others will be happiest just getting to the finish line. Most are somewhere in the middle.
Without the benefit of knowing the future, the best a Realtor, or anyone, can do in most situations is to deal with the facts in hand. Once you’ve decided, the best you can do is take each step in the process as it comes and know when to move forward or when to walk. Not every sale or purchase works out, but an experienced Realtor can navigate the journey with you, with a lot of calmness, maybe a bit of levity, and the perspective that if you have someone who wants to sell and someone that wants to buy, you can usually come up with a solution to most any problem that arises. There are a lot of “what ifs” in real estate, as there can be in life. But, I think, if we deal with the current reality, we can eliminate a lot of the worries and stress that come with wondering what may have been behind another door.