Sometimes the biggest roadblock in a transaction is not the clients, but the agent representing them. What steps can you take to keep your negotiations on track, even when the other agent does something dumb to derail them? Find out here.
Sometimes the biggest roadblock in a transaction is not the clients, but the agent representing them. What steps can you take to keep your negotiations on track, even when the other agent does something dumb to derail them?
New, uneducated and incompetent agents are a fact of life in our industry. So are the control freaks who will press their agenda, even if the result is losing the deal.
Here are four examples of how blundering agents contribute to their clients’ uncertainty, make the negotiation more difficult than necessary or squelch the deal entirely.
1. Not shutting up
One of the most important principles in negotiation is, “Shut up and sell.” For decades, I’ve watched agents make an unnecessary remark and unclose a buyer who was ready to write an offer.
For example, a classic deal killer is the agent who points out the “beautiful crystal dining room chandelier” or some other minor feature that the buyers hate.
Another example is the agent who waxes on about what the buyers can to do update the property, even when the buyer likes the property as it is or lacks the money and time to update it.
The bottom line is that the only opinion that matters is the buyer’s opinion. Remember, it’s their house, it’s their mortgage, and it’s their decision. Furthermore, all the flipping shows have conditioned buyers to expect properties to be in move-in condition. Pointing out what can be done results in the buyer deciding to look elsewhere.
2. Taking control of the decision process for clients
A “white knight” is an agent who decides to take control of the decision process for their client. You know that you’re dealing with a white knight when the other agent says, “I would never let my clients take an offer that low!” or “There’s no way I would ever let my buyers agree to that contingency.”
I remember dealing with a white knight listing agent who was convinced that his sellers would never take my buyer’s offer. I knew he had a reputation for squelching deals due to his strong need to control.
Here’s what I told him that circumvented that behavior: “My buyers would like to know what the sellers’ exact feedback is about their offer. Consequently, they have requested that we let the sellers look over the offer and that neither of us comment until the sellers have made their comments first. Does that work for you?”
He reluctantly agreed. Of course, the sellers accepted my buyers’ offer, and we closed. Nevertheless, for years after this transaction closed, he would still remind me that he never thought the sellers should have sold the property “at that price.”
To avoid having your clients victimized by a white knight, present your offers in person. The white knight (and many competent agents) will fight you on this. Remember, however, if you’re not present, you’ll never know for sure who is undermining your deal.
Have you ever been in a negotiation where the other agent or one of the principals called the buyer “low-baller” or a “bottom feeder?” If so, this behavior only increases the probability that the transaction won’t go together.
The reason is that you not only have to overcome any objections the seller has to the offer, but you also must overcome the fact that you have portrayed the buyer as someone who is trying to take advantage of the seller.
To avoid having this happen to you, keep in mind that many people make low initial offers, especially if they’re from a culture where this is the norm.
Here’s how to handle the situation with the sellers:
Seller, I’m certain Sally Agent would have liked nothing better than to have brought you a full-price offer so we could immediately move forward on closing the transaction. Sally’s buyers, however, have elected to write an offer substantially below the asking price.
About half the time we can put these transactions together. What I would like to suggest is that you make a counteroffer to see if Sally and I can put this together.
If the sellers are really angry and are so offended that they will not sell their house to these buyers no matter what, you can defuse the situation by saying:
Seller, if you’re angry about this offer, you can counter back at over asking price.
Several of my past sellers have done this. This approach immediately defused their anger about the low offer and usually made them laugh. Furthermore, it prevented the situation from escalating into one that could have cost me the listing.
Instead, they eagerly drafted the counteroffer as a way of showing the buyer what they thought.
4. Being critical of the property
There are some agents who believe that the best way to persuade a seller to lower their price is to criticize everything that is wrong with the property. Criticizing the seller’s property only alienates the seller — it doesn’t get you a lower price, and it makes the transaction much more difficult to negotiate.
A much better approach is to use the pricing functions on CoreLogic’s eProperty Watch, HomeSnap, realtor.com, Zillow, and of course, your own updated CMA. Explain that your buyer based their offer on this data. If the seller is way out of line on their price, these tools can back up your buyer’s position.
Another effective approach is to point to the increasing interest rates. With each quarter-point increase in the interest rates, the pool of buyers who can qualify to buy the seller’s property is reduced. Fewer buyers ultimately translates into lower prices, especially if interest rates continue to increase.
Although you can’t always circumvent other agent’s blunders, you can make sure that you avoid making these mistakes in your business.
Bernice Ross, President and CEO of BrokerageUP (brokerageup.com) and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.