Hello, We are looking to make an offer and have a question regarding the best negotiation strategy.

Asked by Pete Carr, Boston, MA Mon Jan 19, 2009

Our “buyer’s” agent is suggesting a “reasonable” offer that is slightly lower than what we would be ok paying for the property. However, on a side conversation, the seller’s agent told us where she would start (just because we pretended we didn’t know anything about real estate), which was lower than what our agent recommends. I realize she probably broke the code of ethics, but what should we do with this info? Should we go in lower and start a back and forth game with the chance to get a great deal, or should we start with a more reasonable amount but let the seller know we are more rigid in our negotiation?
Thanks for your help.

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Ronn Huth, Agent, Wenham, MA
Mon Jan 19, 2009
Hello Pete,

The side conversation with the seller's agent is very revealing and it's something your buyer's agent wasn't privy to. Your buyer's agent has a fiduciary obligation to look out for your best interest. I think I would share with your buyer's agent what the seller's agent told you. My guess is that your buyer's agent would agree to the lower offer, unless they have good reason not to. Getting you the best possible price and terms is part of his/her obligation.

If the seller's agent gives you the information it only makes sense to use it. I've been an Exclusive Buyer's Agent since 1990 and because buyer agency was so new, I used to always tell listing agents "you shouldn't tell me anything that compromises your seller's position" but enough time has gone by that agents should well understand that by now. Now I use anything and everything the listing agents tell me to the benefit of my buyer clients.

The particular style of negotiating depends upon the circumstances. If the listing agent told you a lower number, it only makes sense to start there unless there are other circumstances that dictate otherwise. For example, if there are other offers coming in, if the listing agent has a buyer negotiating on the property at the same time you are, etc. Hey, maybe the listing contract is about to expire and the agent just wants to sell it at all cost before he/she loses the listing.

There are times when I advise my buyers to offer a more reasonable number, and just two days ago I advised a buyer to give their highest and best because the property is a short sale and has come down over $100,000. With a very recent reduction of $40,000 the buyers are coming in quite a bit lower because that's all they can honestly afford. In my opinion, better to lay it all out on the table at this point.

On the other hand, I am known to say, "You won't get a property for any less than you offer". In your case, as you've described it, I would likely offer what the listing agent has suggested or lower.

By the way, if the seller's agent has actually given you the seller's bottom line without the seller's permission they have not only broken the code of ethics, they have broken contractual law and agency law.

1-800-25 BUYER
0 votes
Bill Kuhlman, Agent, Needham, MA
Tue Jan 20, 2009
Hi, Pete-

Just to sum up, picking the best of what everyone else has said with a couple of other ideas:

1. What you believe the home is worth and what you offer is up to you to decide. Your agent can give you data, help you makes sense of that data, and make recommendations, but it's your signature on the bottom line and your money making the payments.

2. Your buyer's agent can do the best job for you when you share everything with him or her. Just like you don't want your trial lawyer to find out a pertinent fact you had kept from him or her in the middle of your trial, you want to make sure your agent knows everything you know. This includes your wants, needs, and motivations, but it also includes all pertinent information. I would have assumed you would have shared with your agent what the seller's agent said before you sat down to discuss the particulars of your offer.

3. It's possible the seller's agent breached their fiduciary duties to their client, but it's not absolutely certain. We would have to know more facts.

4. Every transaction and every negotiation is different. Even if the property is the same and the buyer and seller are the same, the negotiations could be very different a month later, a week later, or a day later. Circumstances and motivations change over time, sometimes quite suddenly. It's impossible for any of us to make too many judgments or make an informed recommendation with the information at hand.

5. You have your bundle of interests and the seller has his/her bundle of interests. Each of you may have professional representation to help you get the best possible deal. But the situation may simply not warrant both of you getting a "win-win" solution.

I disagree with the popular notion among many real estate professionals that negotiations are all about finding win-win scenarios. It makes sense that many---maybe even most---negotiations create a win-win for both parties. But negotiations are not primarily about making people feel good or making sure everyone gets some of what they want. In the world of residential real estate, negotiations are about bringing about a meeting of the minds for two parties with diametrically opposed interests regarding many details of the transaction, such as the price.

I find that very often there are ways to give a seller what s/he wants without the buyer giving up anything that matters to them. But the majority of time, one side or the other will have to give up something until it hurts---really hurts. It's just the nature of the beast.

I can tell you that in the extreme sellers' market from 2000--2004, sellers and their agents often became arrogant and demanded things that made the terms of sale extremely one-sided. Today you might find it hard to believe some of the hoops buyers were asked to jump through in that market. It was up to the individual buyer to decide if they wanted to agree to those onerous terms or pursue another property.

But just as I didn't get upset with sellers in that era for pushing the limits of what buyers would accept (okay, maybe I did, on occasion), I do not blame buyers today for asking for the moon and stars in order to get the most favorable terms possible. I do not believe that our job as real estate agents is to ask our clients to give up any more than the minimum necessary. Very often that means finding those win-win situations in order to get the things that matter most to your client.

But you can be certain that if the tables were turned---that is, if you were the seller of this property and the seller were your buyer---the other party would at least explore getting everything they wanted in the deal.

And that's as it should be. Everybody states what they want and it's up to each party to decide what is acceptable to them. No one is forced to accept any term against their will. It isn't necessary to be mean about it, and no one should blame the other party for asking for what they want.

One irony here is that I think most people who know me personally and professionally think of me as a nice guy, respectful and mild mannered. But I see no reason to begin every negotiation looking for a way to appease the other side. When it's in your client's interests, absolutely, yes, look for those win-wins. Just don't assume it's going to be necessary.

I think I'll post a question about this to see what people say.

Bill Kuhlman, CRS, GRI, ABR, CBR, ASR
Kuhlman Residential
2007–2008 President, Board of Directors for
The Massachusetts Association of Buyer Agents

2008 Client Stats, Through October 31:


Percentage of Current List Price Received 98.3%
Percentage of Original List Price Received 98.3%
Avg. Buyer Down Payment 47.6%
Avg. Days on Market before Offer Accepted 4.33 days


Percentage of Current List Price Paid 95.7%
Percentage of Original List Price Paid 85.4%
1 vote
Jeff Persons, , Boston, MA
Fri Dec 10, 2010
Tell Your Boston Realtor you want to see ALL the sold units. Dishonest agents will hand pick sold statistics to reinforce the sellers ideas about the value of the property. Don't settle for just the sold units that agree with the asking price.
Web Reference:  http://wesellboston.net/
0 votes
Territory.c…, Agent, MA,
Fri Jan 23, 2009
Start lower and negotiate up to the reasonable price. You need to stay focused on what your needs are and if the seller gave you an indication of the sellers situation and what they might be willing to accept you should us that to get yourself a better deal. I the sellers agent is throwing numbers out there that also means the seller is desperate to sell and wants a deal.

Negotiations are not about win-win for everyone. On the contrary, in most negotiations one party makes out better then the other, defined relative to the situation. There are, however, some instances where a negotiation can be fairly balanced, as an example the seller agrees to a lower price and as a concession of that lower purchase price the buyer agrees to a later closing date that accommodates the sellers schedule. However, each side of the negotiation goes in with completely different strategies and needs. In the case of a buyer the need is to get the home they love for the lowest and best price possible which is why a buyer should always choose an (exclusive buyers) agent who is incentivised to and is the best at doing this. There are of course some cases when a buyer falls in love with a property and makes it very clear to their agent and themselves that they will do whatever it takes to get the property, even if it means over paying and in essence "losing" the negotiation.

Good luck!
0 votes
Christine De…, , 32801
Tue Jan 20, 2009
In this situation, I would listen to your agent. If the seller's agent is willing to break the code of ethics to give you this information, I feel he/she cannot be trusted. When I first started as a Realtor, I had a sellers agent actually tell me on the phone the sellers would take x amount lower than the list price because she had an interested party and wanted her clients offer to seem better. Remember, your agent will work in your best interests and if you really want the home, offer what you feel it is worth to you. You wouldn't want to lose it to another buyer over a few thousand dollars.
0 votes
Dorene Slavi…, Agent, Torrance, CA
Tue Jan 20, 2009
Hi Pete,

Yes you are free to make whatever offer you think is reasonable given the information you have. Whenever I work on a negotiation, I really try to see both parties side,and I work very hard to make the sale or purchase a win-win for everyone concerned. If you are going to offer much below asking price, see if your agent can find out what the seller would like (quick escrow,few contingencies etc.) that way you can give a lttle too.
Web Reference:  http://www.doreneslavitz.com
0 votes
Ken Lambert, , Exeter, NH
Tue Jan 20, 2009
Hello Pete- I think you've gotten some good answers and insight here. Use the info you've gotten and come in with a lower offer than you or your agent might have before.
Also, I do believe that your buyer's agent should give you some direction as to what a starting offer might be. They know that market better than you, and what the spread is between listing prices and selling prices, etc. That doesn't mean you have to take their advice, but you should ask for it.
Thanks, and good luck,

Ken L.
0 votes
Jonathan Bow…, Agent, Stoughton, MA
Mon Jan 19, 2009
"The fact that the seller's agent suggested where to start isn't probably breaking the agency laws, it is the poster child for breaking the agency law."

Bob, I strongly disagree with this statement. You have no idea what the seller's agent and the seller have discussed and neither do I. The seller and the seller's agent could have motivations that we are not privy to. There are a million reasons that the broker would've made that statement to the buyers. Could've the seller's agent broke agency rules? Absolutely! But you just don't know and to make that statement without more facts is irresponsible. Needless to say, if I were Pete, I would make an offer lower than he would've initially made had this conversation not taken place.
Web Reference:  http://www.BowenBoston.com
0 votes
Heather Coll…, , Concord, MA
Mon Jan 19, 2009
The bottom line is you can offer whatever you would like and what you feel is fair for that particular home. You're buyer's rep shouldnt tell you or suggest to you what to offer.
0 votes
Bob Bittelari, Agent, Belmont, MA
Mon Jan 19, 2009
Hi Pete,
The fact that the seller's agent suggested where to start isn't probably breaking the agency laws, it is the poster child for breaking the agency law.
I can not suggest directly to you what to do in your situation, because if you have a contractural agreement with a buyer's agent, any other agent offering advice, may also be breaking the code of ethics.

When my clients find a home and would like to make an offer, I will send them comparable sales, suggest a plan of what to offer, and discuss what to do, should the seller not accept, and either rejects or counters their offer. Also, before preparing an offer, I call the seller's agent to see if there is any current offer being negotiated, or any recent offers presented. That is important information I want to know for my clients, before preparing an offer to purchase.

Good luck with your home purchase.
0 votes
Bill Eckler, Agent, Venice, FL
Mon Jan 19, 2009

You are not bound to offer what your agent recommends. If you have information or a feeling the home will sell for less, this is where you should begin.

Keep in mind, you can always increase your offer but it becomes near impossible to decrease it.

Take control and tell the agent where you want to begin negotiations.....do not tip your hand an indicate your top number.....hopefully you haven't all ready done this.

Good luck
0 votes
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