Homeowners and soon to be homeowners need to learn how to dance with each other.
Whether you are thinking about buying or selling in this uncertain market please take the time to learn to dance. A key factor in any successful real estate transaction is the art of negotiations. It doesn't have to be a difficult process. It's the matter of taking the time to know when to take a step forward or take a step back and learning the steps of a graceful dance to bring the real estate transaction to a beneficial end for all parties involved.
Living in a me-me society as we've come to be, people forget that their wants are not all that are involved. But there are needs on the part of buyer and seller alike that must be taken into account. You can do a 2 step and kill the transaction with ink and pen or you can do a beautiful waltz that give you a first place trophy on Dancing With The Stars.
Make sure the agent you select is the star that will take the lead in guiding you through the difficult phases of negotiating a contract.
Phase 1: Writing a contract and coming to acceptable terms for both parties
When a contract is written you have 3 answers that you can receive a yes, a no way or a counter-offer, which means what dance shall we perform. The 2 step is when you write an offer based on fair comparables that you're agent has provided you. Despite this fair offer the seller counters for closer to the asking price expecting you to accept it without further negotiations. A 2 step will usually kill a contract. Learn to tango and hope that both agents realize that it may take 3, 4 or 5 steps to come to a melding of the minds where all parties are dancing together without stepping on each other's toes.
Phase 2: You've come to an agreement, inspection has been completed and items now need to be repaired in order to continue with the dance.
An inspection release has been written and presented to the seller. At this point either party can do The Bus Stop and bring the transaction to a halt; or you can do The Electric Slide and joyfully complete this phase of the purchase.
Listing every single item in need of repair will usually kill a transaction. Unless you are buying a brand new home it's not necessary to ask for all the small items in need of repairs to be completed. For example new outlet covers cost $.50 to $1.00 at your local hardware store and cracks in the sidewalks can easily be filled after closing. Major items that will impact your health and/or safety should be addressed. For example foundation, roofing, plumbing, electrical and HVAC related repairs should not only be addressed, but grouped together in non-intimidating ways on the inspection release so that all parties feel comfortable and informed, helping you slide right pass these hurdles.
Phase 3: The signing at title
Coordinating all parties and keeping everyone patient until the documents have been delivered to title, reviewed and adjusted if needed by the escrow officer and making sure the final walk through is complete make up this graceful dip of a finale.
Sometimes due to work schedules there can be some little hitches where the seller or the buyer have to adjust whom signs first. As long as all parties stay in communication this can work out smoothly ending the dance on a wonderful upbeat.
We decided to write on this topic based on a few recent real life examples. We share these examples and this blog entry in hopes that it will help people in the future.
Case 1: Recently on behalf of our client we made an offer and unfortunately it was killed based on the 2 step dance example. The listing agent encouraged a dance but abruptly halted it despite having actual comparables indicating a lower price that we believe the listing agent chose to psychologically dismiss. Comparables showed the home to be worth 15,000 less than the asking price. The appraisal would not have come in at the asking price and we must wonder if the agent even told her sellers this information.
Case 2: One buyer's agent we worked with nearly killed a transaction by insisting on several small items being repaired in order to make her appear as a superstar, despite the items requiring little money or time. In this case the agent's ego was on the line instead of any of the client's best interests. Luckily our ability to find excellent and affordable vendors willing to step up and help the seller's family get through this process with little financial burden saved this transaction. We were able to smoothly complete what appeared to be a nightmare for the sellers. In the end it turned out to be a blessing.
Case 3: As the dance was nearing end the title company found a hidden Liz Pendence (legal action pending against a property). Our clients and the listing agent started to freak out. Tami's negotiation ability kept our clients and the other agent calm. Thankfully having a great escrow officer and negotiator at the title company also contributed to the success.
