Whether you are buying or selling a home, there are some shrewd negotiators out there who want to extract every last possible dime from your pocketbook. One of their most common strategies is "the nibble."

You completed all negotiations, the buyer has removed all the contingencies, and you’re set to close in just three days. Every detail concerning the move has been handled. Much to your surprise, you receive a call from your agent telling you the buyers thought the washer, dryer and refrigerator were included in the deal.

They’re refusing to close the deal unless you either leave them the appliances or give them a credit for $1,000 to replace the items. While this could be a legitimate misunderstanding, chances are that you have just experienced what is known as "the nibble." A "nibble" is a negotiation ploy where the nibbler attempts to get "just a little bit more" out of the deal.

I once had an REO (bank-owned) listing on the Wilshire Corridor in Los Angeles. The property was in great condition and had new carpets and drapes. We had priced the property to sell. We received two offers and the bank took the highest offer, which was an "all cash" offer.

The buyers were from another country, where bartering is a core cultural value. For my bank clients, the signed contract represented what they expected to receive when the transaction closed. For the buyers, the contract was just the beginning point of the negotiation.

The listing agreement was clear: The buyers were purchasing the property in "as-is" condition. The bank was exempt from the disclosure requirements, although as an agent I still had to provide the buyers with a disclosure statement. I completed my disclosure and included it as part of the offer negotiation. The buyers signed off on the offer.

In normal practice, once the buyer approved the bank’s counteroffer including the disclosure items, those items were no longer subject to negotiation.

In most cases, when a buyer purchases an REO there is no physical inspection contingency. This means that the buyer must inspect the property prior to making an offer. It also means that the buyer does not have a legitimate way to back out of the transaction based on the property condition unless that condition changed between the time the property was placed under contract and the time it closed.

Although it was unusual, the bank agreed to the physical inspection contingency since the offer was all cash.

Our contract called for all appliances to be in "normal working order." The appliances all worked properly. The buyers were unhappy that the appliances were seven years old. They asked the bank to replace all of the appliances. The bank refused, but did agree to purchase a home warranty to move the deal forward. This was the first "nibble" in the deal — getting the bank to pay for the home warranty. …CONTINUED

A week later, I received a call from an appraiser wanting access to the property. I contacted the buyers’ agent to see exactly why the buyers needed an appraisal, since the transaction was supposed to be all cash. Furthermore, the bank had requested proof of enough funds on deposit at a U.S. bank to close the transaction for all cash in the 30-day period.

It turned out, at least the agent claimed, that the buyers thought they could bring that much money into the country, but were having trouble doing so. Assuming that the property appraised at the purchase price, the buyers had sufficient funds to make a 20 percent downpayment and obtain an 80 percent new loan.

They were going to need an extra couple of weeks to close the loan, however. Nibble No. 2: Would the bank be willing to extend the closing week another two weeks? The bank agreed, although it demanded a preapproval letter from the buyers’ mortgage company prior to accepting the change in terms.

The buyers asked if they could bring their decorator to the property. It was a warm day and the air conditioning was off. The buyers came back the following day and claimed that the air conditioning system "was not in proper working condition as per the contract because it took too long to cool down the property." However, I visited the property and the system kicked on immediately. The buyers demanded that the bank replace the air conditioning. As an alternative, however, they said the bank could replace the carpets with marble.

Fortunately, we received a strong back-up offer. At that point, the bank instructed me to have cancellation instructions drawn up, including retaining the buyers’ $10,000 deposit for liquidated damages as per the contract. The bank gave the buyers five business days to close as per the new contract date or lose their $10,000 deposit. When the buyers learned of the other offer, they immediately came up with the money and closed.

The moral of the story: About the only way to stop the nibble is to be prepared to walk away from the transaction. The nibbler knows that it really isn’t worth starting the sale process all over again for such a little amount.

Bernice Ross, CEO of RealEstateCoach.com, is a national speaker, trainer and author of "Real Estate Dough: Your Recipe for Real Estate Success" and other books. You can reach her at Bernice@RealEstateCoach.com and find her on Twitter: @bross.


What’s your opinion? Leave your comments below or send a letter to the editor. To contact the writer, click the byline at the top of the story.

Show Comments Hide Comments


Sign up for Inman’s Morning Headlines
What you need to know to start your day with all the latest industry developments
Thank you for subscribing to Morning Headlines.
Back to top
We're giving away 3 free ICLV tickets at Connect Now next week. Register and attend live for your chance to win!REGISTER×
Log in
If you created your account with Google or Facebook
Don't have an account?
Forgot your password?
No Problem

Simply enter the email address you used to create your account and click "Reset Password". You will receive additional instructions via email.

Forgot your username? If so please contact customer support at (510) 658-9252

Password Reset Confirmation

Password Reset Instructions have been sent to

Subscribe to The Weekender
Get the week's leading headlines delivered straight to your inbox.
Top headlines from around the real estate industry. Breaking news as it happens.
15 stories covering tech, special reports, video and opinion.
Unique features from hacker profiles to portal watch and video interviews.
Unique features from hacker profiles to portal watch and video interviews.
It looks like you’re already a Select Member!
To subscribe to exclusive newsletters, visit your email preferences in the account settings.
Up-to-the-minute news and interviews in your inbox, ticket discounts for Inman events and more
1-Step CheckoutPay with a credit card
By continuing, you agree to Inman’s Terms of Use and Privacy Policy.

You will be charged . Your subscription will automatically renew for on . For more details on our payment terms and how to cancel, click here.

Interested in a group subscription?
Finish setting up your subscription