Now that our market has shifted into high gear, many home sellers are finding themselves on top when it comes to negotiating sales price. If a property is affordable, in a desireable area, and has been recently updated, that seller can count on receiving several above-price offers - literally within hours of going on the market.
Now feeling like the most popular kid in school is a heady experience...particularly after the 6-year slump of stagnant home sales from which we've just emerged. But acting on that feeling can cause sellers to lose their edge when negotiating offers.
For example, a recent listing of mine received 5 full price offers and one above-price offer the very first day on the market. Not surprisingly, the seller selected the above price offer. The contract was signed and the home inspection took place several days later. After the inspection, the buyer presented the seller with a handful of minor repairs. Against my advice the seller - feeling that he had the upper hand - turned the requests down flat. The buyers - feeling that they were already paying more than enough - got angry and walked away from the deal.
Of course we immediately turned to the other buyers who'd made offers - all but one had already moved on to other properties and that one remaining offer, while still full price, had other terms the seller didn't like. The property sold about a week later, but for less than full price. And the seller also wound up paying for most of the repairs that the original buyer asked for.
The original buyers were willing to pay more than the seller was asking because they understood that market conditions dictated that offering strategy. Fair enough. But the seller's response to the repair requests just came across as greedy. Not fair at all. Had he agreed to at least a couple of small repairs, the buyers would have likely moved forward with the deal.
It stands to reason that people's willingness to accept a proposal is strongly influenced by whether or not they felt fairly treated during the negotiation process. If they perceive their treatment as fair, they are much more likely to accept something less and move forward in a cooperative spirit.