Home > Negotiation > When buyers lose out because of poor negotiating.

When buyers lose out because of poor negotiating.

Last weekend I was working with a family who wanted to buy a home. They found the home they wanted and were going to pay full price when another family member got involved and said they should make an offer below the asking price because it had been on the market for a while and it's a buyer's market.

I warned them about everything that could go wrong but they still made an offer [only $1500 low]. Murphy's Law, another couple made a full price offer after our offer was submitted but before the Seller responded and they got the home. The people I was working with lost out because they wanted to get a better deal.

What would you say to someone like this? - by Thomas
What would you say to someone like this?
Mr. Prospect now that you've found the home you want and at a price that is fair are you willing to risk losing all of that just to see if you can get a better price? - by Frankie
Part of Negotiating is that you must be willing to walk away. Once they started negotiating then they gave the appearance that they might walk away.

I would have probably negotiated also. Heck I asked for $1 off a dryer this week because Lowes had the same model for $1 less.

Dang am I cheap!

Good Selling!!!

P.S. Don't fret I am sure you will find them another home that is even better for them. - by Sell4alivn
It is customary in the real estate market to make a 'offer' to the seller that is a lower based on 'comparable' houses that have recently sold.

If you created an environment, where your potential buyer knew the pitfalls of making a lower offer, and was willing to take the chance of 'losing the perfect house' for $1500, then you did all you could do.

Problem is they may have felt that the reason you wanted them to give the seller his full price, is that they thought you were more concerned with your commission or worse that you cared more about the seller getting his full price, than having them get the best price they could for the house they wanted. Even though commission on an extra $1500 is very very little.

In actuality the difference they would have seen in their mortgage payment for the additional $1500 paid for the house would have been pennies each month, AND they would have had the house they loved.

It clearly just wasn't meant to be. - by Paulette Halpern
I expect that after this experience there would be very little necessity to say very much in getting and presenting an offer from this same family on a second property.

If you were wanting to avoid this situation from happening again with another buyer, it may be useful to relate this story (and others like it) to them. After all, you're the expert, and you're the professional with the experience to help them avoid making such mistakes.

When working in such situations having third parties coming in to second guess events is another area you may seek further control over, to mitigate potential disasters happening.

Real estate transactions by their very nature necessitate attention to such details, and since they relate to specific and unique parcels of property, demand the utmost out of the broker(s) involved, and their skills in negotiation.

In your specific instance, I'm going to estimate that the $1,500 involved might have only equated to around $10 extra a month on the mortgage. For $2.50 a week, or around 35 cents a day, I'd have asked my buyers directly "is this going to make a big difference to your lifestyle?"

In conjunction with their family member (the well-meaning third party) whose ideas on 'winning' and negotiation in general were about to torpedo the chances of getting the family that house, I'd have looked at firming up their combined thinking on all of this so that together (through your guidance) the right decision and actions were taken. - by ThirdForceNegotiator
It is customary in the real estate market to make a 'offer' to the seller that is a lower based on 'comparable' houses that have recently sold.

If you created an environment, where your potential buyer knew the pitfalls of making a lower offer, and was willing to take the chance of 'losing the perfect house' for $1500, then you did all you could do.

Problem is they may have felt that the reason you wanted them to give the seller his full price, is that they thought you were more concerned with your commission or worse that you cared more about the seller getting his full price, than having them get the best price they could for the house they wanted. Even though commission on an extra $1500 is very very little.

In actuality the difference they would have seen in their mortgage payment for the additional $1500 paid for the house would have been pennies each month, AND they would have had the house they loved.

It clearly just wasn't meant to be.
There is no rationality where money is concerned. I sold real estate for a brief period. My first listing was for a $30,000 piece of property the owner paid $500 down three weeks earlie