May 2015

The art of real estate negotiation is dead. Time of death: 2015

SweaterIs there something in the water? There might be, because a tidal change is occurring and it’s stronger than ever. Buyers 1) are simply unwilling to pay full asking price of an accurately priced home, and 2) they will not negotiate.

You can perhaps throw in a 3) in there: they also will call to ask “how low you’ll go,” or, sadly, they have their agent make that call and no one has seen the home inside. Ironic? No. Lazy? Yes.

These things happen to me not monthly, or infrequently, but pretty much close to daily. The non-negotiating buyer seems to me to stem from the instant “app society” we live in. This is my definition of a society that is relatively cheap and fast with a fair amount of immediate gratitude and immediate rejection. Apps got us here? I don’t know. Maybe.

You don’t like the faces on Tinder? Swipe them away. Don’t like the Yelp review of a restaurant? Instantly move to the next review of the next restaurant. Unhappy with your Facebook interactions? Stop following or unfriend. Or even block (look how powerful you are!). Simple choices, instantly. Miserable with your Twitter feed? Unfollow and/or block.

These instant choices of acceptance or rejection go on all day and night for all of us. Every day. We are inundated with choice and decision, and sometimes for pretty meaningless things. In our app society, you play fast & furious to keep up, to feel relevant and to participate. It’s rubbing off into the world of real estate.

In past days, buyers would reject a real estate agent’s website as mediocre and move to the next website and choose their agent that way. Now, you can choose an agent 100 different ways and maybe that’s how the decision to buy a home is devolving.

It seems, based on the calls I get, we’ve reduced the process to less than buying a sweater at Nordstrom. Example: I call Nordstrom after eyeing a blue-ish sweater online. It’s heavy cotton/wool and “boyfriend baggy” and, of course, I want it. It’s $200. Is it an investment piece? Sure. But in today’s world, I don’t have to pay retail. So I call Nordstrom on the phone and speak to someone in the Savvy department: “Hello, regarding the blue-ish cable sweater by Rag & Bone? Yes, thank you…how low will you go?”

Nordstrom worker, in her wisdom, says, “It’s $200. That’s how low we’ll go.” Conversation over. The art of negotiation is none in this case. Respect it.

Buying a house has now been reduced to less than that, because home sellers aren’t always firm in their pricing. At least Nordstrom is holding to its core value of not taking my call seriously. I get calls like this all the time.

Think about it: The instant reaction to a house seen online is What Is The Real Price? You are not inclined to instantly work harder to afford what it’s priced, and you might even look at homes you can’t necessarily afford. You are shopping for what looks good and you want to set the tone on pricing! Prices coming down to where I need them to be is the tone I hear from home buyers.

To buyers: this not a rant. You can offer what you like. I work with sellers and I know that we as listing agents and my clients as sellers truly hold all the cards. Buyers really don’t hold the same cards because they don’t control the property. Controlling the property is the business side of the transaction. You can offer less and simply not get the property. It’s OK with me.

Because in real estate this is true: everything does eventually sell. That favors my side. However, because housing pricing is typically negotiable, please come to the table to negotiate reasonably.  We want you there. We really need you.

My commentary has more to do with the “instantaneous” nature and the de-volution of our contract writing process (i.e., not always writing one). Why write it up when you can simply call, and get an instant app answer? I see buyers make all kinds of low-ball “hopeful” phone calls, forgetting that we as agents don’t make the decision on price. Stop calling us with that question. It will not have an app answer. When an offer is actually written up, and electronically signed, the offers are typically what I will call crushingly unrealistic and sellers can’t counter — where do they go? This stretches across all price points except the lowest. 2015 takes the cake. That’s why I am calling time of death on real estate negotiation as 2015.

What is the solution? We as listing agents must continue to politely tell anyone (agent or buyer) that for a house purchase price to be taken seriously or even considered, it must be written up in a complete offer. That’s work, but not a ton of work. Take a few minutes. And if you (buyer) are serious, ready, and want a house, simply shop only for homes you’re qualified to purchase. The art of negotiation is based on win/win, not clicking out of the process because you didn’t get your way on the first try. And please stop making the “how low will you go” calls.

Sometimes things cost what they cost. Sometimes they are negotiable. Come prepared for both scenarios.

Sellers — we must price any and all property correctly for me to be able to push back on this new type of non-negotiating buyer. It’s not just millennials. Every age range is participating in our instant app society and it is a real thing. I will do my part if you do your part and price your home correctly and to sell. A perfectly priced home should sell in under 30 days, with very few exceptions.

For a free analysis of your home value — which is not instant — please call or email me. We can list any home for sale, with professional photography completed, all within 48 hours.

(858) 452-2599

-Kimberly Dotseth, broker/owner/negotiator


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