Invariably, in high-stress and high-emotion situations like buying and selling real estate, there are often points where things can become stalled, and everyone needs a time out. Here are nine situations in which negotiations can easily get put on pause.
Cara Ameer, a top-producing broker associate from Northeast Florida, writes about working with buyers and sellers, sticky situations and real estate marketing in her regular Inman column that publishes every other Wednesday.
Negotiating an offer is often like a game of tennis: The initial serve (the offer) sets the tone for how the entire negotiation is going to go. If it is strong, the player (the buyers) could score an ace, and the opponent (the sellers) might not be able to return the serve or even need to with a counteroffer.
Alternatively, if the serve is weak, it could be a chance for the sellers to come back with a cross-court volley that puts the buyer in their place with little chance for a return shot.
Depending on the court dynamics, the negotiation, like a game of tennis, could go back and forth with a long session of volleys with no end in sight. Each party has a counteroffer to the other, and sometimes everyone has to go to the sidelines to catch their breath and take a drink of water (or if the negotiation is really stressful, perhaps another beverage of choice).
Invariably, there are often points where things can become stalled, and everyone takes a time out. Here are nine situations in which negotiations can easily get put on pause:
1. Low offer
Whether the offer is realistic and perhaps the seller is unrealistic (and overpriced), or the buyer is truly lowballing, sometimes the seller will simply shut down and not respond to the buyer’s offer.
The buyer, offended that the seller did not counter their offer might “go away” for a couple of days, and after an honest conversation with their agent, come back with a new offer that the seller will hopefully respond to.
After a lot of back-and-forth, the gap is closing, ever so slowly — both sides are $20,000 to $30,000 apart, and everyone is stuck in mud.
No one wants to spilt the difference in the interest of getting the deal done, the agents are out of possible solutions, and so everyone walks away. Then, three weeks later after a lack of showing activity, the seller reduces the listing price to try to generate a slew of new interest rather than going back to the original buyer who wanted to buy their home in the first place.
2. Closing date
The buyer must close on a certain date that does not mesh with the date the seller has to close by for whatever reason. The buyer’s current home is under contract and will close soon, or their lease is up, and they will have nowhere to go.
To complicate matters further, the seller’s soon-to-be new home is nowhere near ready by the time the buyer wants in. Hence neither party is not willing or able to compromise, and an impasse ensues. In other words, who is going to be the one that ponies up for a short-term rental?
Buyers and sellers split hairs on everything from the loan approval date to the number of days for inspections, despite the customary default timelines afforded by the contract.
The seller wants to shorten loan approval to 20 days from the customary 30 or 45 despite being told that the lender cannot guarantee they will have all done by that time.
The buyers will be traveling for business and insist on being there for inspections, and therefore, inspections cannot happen before at least 15 days from the date of contract acceptance, but sellers wants them done within 10 days.
These discussions go on and on, and no proposed scenario seems to work for either party.
4. Closing costs
Sellers just love when buyers ask for closing costs. What a buyer might not always realize is asking for closing costs simply forces them to pay for it with a higher mortgage because they will almost always have to pay full asking price, very close to it or sometimes even over asking to secure their offer in a multiple-offer scenario.
A buyer might be surprised when a seller isn’t too flexible about being asked to make this concession. Furthermore, a seller might want to get an itemized breakdown from the buyer’s lender to get a realistic idea of what they would be paying rather than agreeing to a blanket percentage of the purchase price, which is often ripe for a lender to throw in junk fees (such as charging a higher origination fee) or have the seller unknowingly put the contribution toward points to buy down the interest rate.
The listing agent wasn’t quite prepared to be asked for this, so listing agents have to go to the buyer’s lender (or at least the one they said they would be using when the offer was made) to get the proper information.
For whatever reason, this relatively routine request somehow takes days to obtain from the lender, stalling the deal and contributing to frustration.
5. What stays and what goes
There is nothing like a battle royale over the dining room chandelier (that the sellers excluded from the listing and said would not be conveying) along with the flat-screen televisions.
The buyers don’t care that they were not listed as conveying with the property; their point is if the seller wants them to pay X price for the house, those items must be left — or the deal is off.
Oh, and once the offer documents are fully executed? The buyer doesn’t hesitate to ask if the seller will just “throw in” the patio furniture and their couch. After all, they go perfectly with the house, why would the seller want to take them to their next one?
The property just went under contract, and one of the most dreaded moments in real estate happen — the home inspection. The report is a 55-page diatribe listing every defect, repair or suggested correction, even those not required by code.
The buyers and their agent love to dump this in the lap of the sellers and their agent to sort through and figure out because they want it all fixed. Or even worse, severe issues are discovered that either the seller was unaware of or somehow hoped would not be revealed.
They are extremely expensive to fix, or there is really no practical solution to them. Then there is the fire drill of seemingly major issues that were completely overblown and misinterpreted by an incompetent inspector who sounds the alarm for no good reason.
In any case, trying to get contractors to troubleshoot and give estimates to address can eat up days and even weeks. In the meantime, all else comes to a halt with the buyer’s loan process because unless this gets resolved, the transaction is not moving forward.
This is another nail-biter for all involved. Although the property is under contract, this is another stall point, and depending on the outcome, it could cause the entire contract to be renegotiated or fall apart.
It can often take two to three weeks before the appraiser goes out and many times the buyer wants to make sure the inspections are OK before giving the green light for this to happen (despite some contracts specifically spelling out timelines for the ordering of the appraisal).
When the appraised value comes in below the contract sales price, it is all up for grabs.
The seller is often quite upset, the buyer won’t buy the house at anything but the appraised value, and a thesis written by the listing agent in an attempt to appeal the report dissecting every potential comparable sale won’t make the appraiser budge — two weeks later. All is on hold.
A buyer and seller are so far apart in a negotiation, and neither side wants to do much to close the gap, which puts the burden on the other party; it is all a game of posturing and seeing what they can squeeze the other side for.
The buyer comes up $2,000 in response to the seller’s refusal to counter or barely counteroffer and so it goes from there.
Each round ensues with literally stepping over dimes to save nickels, and depending on the counteroffer, each party trades taking off or putting things back into the deal.
At x price, the seller will include the beloved refrigerator and state-of-the-art washer and dryer, but if the buyer won’t come up to that number, all bets are off. The buyer pushes back for all of those things and the home warranty. It becomes a quid pro quo discussion that can go on for several days or even weeks.
Finally, everyone breaks pennies to try to bring this together, and both the buyers and sellers are absolutely weary from all the back-and-forth, despite feeding into the entire scenario. At this point, the buyers’ excitement about the house has been reduced to barely lukewarm enthusiasm.
9. Waiting for a better option
This one goes both ways. The sellers receive an offer they aren’t thrilled with and start to negotiate with the buyers, but stop responding because the showings keep coming, and they think they might receive another offer or two.
The buyer grows frustrated with no response or constant excuses regarding the delay. Or the buyer, unbeknownst to the seller has put in more than one offer on a property and delays their response to one or both sellers depending on how the counteroffers come in.
There are always a variety of factors that can lead to an impasse. Whether it is posturing, stalling on purpose or issues that must be resolved, such as inspection or appraisal issues, delays in the negotiation process can cause a domino effect for all involved.
Fortunately, this is where top agents shine. Creative problem-solving, counseling and knowing how to properly frame an issue with the buyers and sellers can often overcome any roadblocks from the deal getting signed, sealed and delivered.