Home Buying in Chicago>Question Details

Bob, Home Buyer in Chicago, IL

How do you get the seller to be wiling to negotiate ton their price?

Asked by Bob, Chicago, IL Fri Feb 27, 2009

Example lets say the house is 355,456 and you make an offer of 315,00 and the seller Ms Apple then says the lowest shewill take is 351,00 . How can you get her to come down lower om her offer without having to pay more than you are willing to ?

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9
Come back to the seller in a few months, the price will be lower, you may not even have to negotiate. If they by some chance do sell there will be tons more on the market at lower prices.

Oh, and the chance of the fed raising interest rates any time soon is zero, the economy is in too bad of shape.
2 votes Thank Flag Link Tue Mar 3, 2009
Bob,

There are plenty of metaphors to describe your scenario, but the quickest way to resolution with any negotiating situation isn't metaphorical but actual - you are best served by having a skilled, trained and experienced negotiator working to your benefit. An earlier respondent accurately described the efficacy and reason associated with selecting a real estate professional with some alphabet soup after his or her name. What these letters mean is that the realtor has engaged in additional training specific to residential real estate. Across the board these real estate professionals are better skilled to serve the needs of their clientele.

In terms of your hypothetical - several quick observations:

- you need a negotiating strategy,
- you need to discern items of value associated with the property,
- you need to determine true market value of the available property.

For a skilled real estate professional discerning this information is easy and charting the path is as well.

One final observation - the negotiation process is a bit like courtship. Be prepared to be patient to move from holding hands to sharing a smooch. But also recognize sometimes even good ideas don't gain traction.

Thomas McCarey
@properties and The Real Estate Lounge Chicago
Licensed Real Estate Salesperson in Illinois
Certified Negotiation Expert
Luxury Home Marketing Specialist
Accredited Buyers Representative
Recognized by Chicago Association of Realtors among Top Performing Agents since 2003


I sell real estate. This means that I represent listing clients as well as buying clients. The variety of scenarios that I have experienced and the situational hypotheses that actual experiences translate into distills into a world view as it relates to real estate that aggregates to the benefit of my clients
1 vote Thank Flag Link Sat Feb 28, 2009
This is when a buyer would benefit from a skilled real estate professional.....one that understands negotiations and the importance of being knowlegable about the local market.

A realtor should be able to access the right comparitive information to support your position for a lower price. Sellers need to understand the entire market, sold homes, homes currently for sale, pending property, what property is selling for outside the immediate area etc.

It's sometimes difficult to do this when they can only see the number they want or feel they need.
1 vote Thank Flag Link Sat Feb 28, 2009
The asking price is $355,456. Is this an objectively fair price or set from a totally subjective standpoint?

The lowest she will take is $351,000. Is this because $351,000 is what she needs? Irrelvant to market
value, totally revelant to her motivations, which may be totally unknown to you.

You won't want to pay more than $315,000. Is this because you want an amazing deal? Can't afford more? Do not think it is worth more?

You are not willing to pay more. She doesn't want to take less than she is willing to. It appears there is an impasse based on a skewed value perception by one or both parties for reasons irrelevant to market value.

I cannot be more eloquent that what has already been stated. Let an experienced negotiator help you in this case. You may be spinning your wheels otherwise and driving the deal further apart rather than closing the communication chasm.

Good luck!
0 votes Thank Flag Link Sun Mar 1, 2009
Patti Pereyra, Real Estate Pro in Chicago, IL
MVP'08
Contact
Let's cut to the chase. The seller has her interest and you have yours. Offers should take into consideration the values in the current market. Get a value on the home by using comparables and cost per sq. ft. If you are offering a lot below the values the seller will counter back at a more realistic price. Ms. Apple came down 5,456 how much did you come up? Bottom line is values have dropped and buyers should get serious and stop playing games. Ms. Apple will find a buyer close to the homes current values. If I was her agent I would not advise her to sell below the current values, unless their is some unusual circumstances.
Web Reference: http://www.fhaloanagent.com
0 votes Thank Flag Link Sun Mar 1, 2009
Hey Bob,

Some of the previous comments here have been very useful. I also agree that this is one of those times when a good agent earns their stripes.

I would like to start by pointing out that you and the seller, despite a round of negotiations, remain very far apart on this transaction. Perhaps this is obvious and the reason for your question, so we can address some of the possible scenarios at play.

1. The seller believes there property is worth more and is waiting for a higher offer. Your offer is too low to be considered serious, so they only tipped their hand a small bit for you. This could mean that the seller is not highly motivated (doesn't need to sell), or there may be other buyers circling the property. In this case, you should take a hard look at the comparables, and either back up your offer with objective data or adjust your offer to more supportable position. Having an agent help you with this will save you a lot of time!

2. Your offer is at market, but the seller cannot sell for less than their counteroffer to you because that is the lowest price that will clear the underlying mortgage and transaction cost. If this is the case, bank approval will be necessary to short sale the property. The seller may not be aware of the short sale option.

There are an infinite of possibility of in-betweens here, and chances are, you'll never know what is going through the seller's mind exactly. You may be able to glean some information from the recorded underlying mortgage amounts, condition of the property, whether it's vacant or not, the bizarre pricing strategy ($355,456?!), etc. There are always clues as to what's going on, and in my experience interpreting the information you have and empathizing with the likely scenario is the best route to stitching together a deal. Again, an agent will be able to help tremendously here as well.

There is also the question of your level of motivation. This may not be "the house" and perhaps you are considering several others. In this case, make your best offer on this property, and start to move on if you get no progress. Moving on can, in itself, sometimes precipitate a deal.

As for the Alphabet Soup. Ongoing formal training and constant reeducation are best practices for all high quality professionals. Some of the certifications on our profession are very well designed and tremendously beneficial. Experience, sense of fiduciary responsibility, and adherence to ethical standards are, to me, much more important determinants of a high quality Realtor. No offense to Eddie (you may be a tremendous agent), but those letters mean more than the marketing power they possess. Share your experience on this site an people will recognize and appreciate you. I have learned much over my time hear from folks like Thomas McCarey (another respondent) and from the questions buyers and seller ask. I also hope to contribute insight to other consumers and agents. This site has begun to attract a lot of attention, so let's not turn off the consumers by turning it into a billboard.

And, for the record, Thomas is absolutely correct. Being a one-sided "buyer specialist" may be fashionable and profitable in this market, but if you don't work as a listing agent, your inexperience with the psychology of that side of the transaction does not serve your buyers well. Besides, who the devil is going to sell the place when your buyer turns into a seller one day!

Best of Luck.
0 votes Thank Flag Link Sun Mar 1, 2009
Just one more thing bob to think about, when did Michael Jordan ever negotiate out his own contract? Why would you not want a Realtor who is trained to work on one of your largest investments.
0 votes Thank Flag Link Sat Feb 28, 2009
This when you use a Realtor! Also when you are looking for a Realtor, know that the little letter that follow such as ABR, or GRI all mean that they have had more schooling. Example I have my ABR, I am an Accredit buyers Representative. I have taken extra training to know more about my field, including classes on negotiation. Please don't think you don't need an agent either since this sounds like a for sale by own. Just because they are making the mistake of not using a agent doesn't mean you should and you still can have the compensation for the agent come off the sellers side. I do it all the time for my buyers.
0 votes Thank Flag Link Sat Feb 28, 2009
I would recommend counter offering with a number you feel comfortable with, this number should be between your offer ($315K) and her counter offer ($351). Are there any contingency - such as having her fix anything or add anything to the sale, maybe you could remove some of those to get her to come down in price. If she wants to move out quickly maybe you could close sooner if she would lower her price.
0 votes Thank Flag Link Fri Feb 27, 2009
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