Now is the time to negotiate everything. Sellers are hurting. Lenders are hurting. Real estate agents are hurting. The big marketing tip to buyers is this: Nothing is set in stone, not prices, terms, commissions, nothing! One real estate agent I know recently found this out the hard way, after losing a commission and a client for any future business.
Negotiate Everything
The agent had an accepted offer on a “fixer” house at a good price at the time the offer was accepted. The buyer was a novice investor who had never done any fixer projects before, but he had arranged his own financing and the real estate agent was not involved.
After the offer was accepted and the financing contingency was removed, the buyer’s mortgage broker informed the buyer that he could not get the terms he had been promised and the interest and closing costs involved would be a lot more than the buyer had planned for. Even though he had already put up a $10,000 deposit, which the seller threatened to keep, the buyer decided to back out on the deal. He just did not have enough cash to make it work.
Find Options
The real estate agent was relatively new in the business and never bothered to explain the buyer’s problem to the seller or the seller’s agent and re-negotiate the deal. He figured that the offer was signed and the buyer either went through with the original deal, or he didn’t and that there was really no third alternative.
This situation left the real estate agent unhappy because he lost a commission. It left the seller and the listing agent unhappy, because the house remained unsold. It left the buyer unhappy and unlikely to deal with the real estate agent again, because he stood to lose all or part of his $10,000 deposit, even though that was not really the real estate agent’s fault.
Imagine the real estate agent’s surprise and disappointment when the same house was back on the market a month later – at an asking price that was $25,000 lower. He realized that if he had been able to negotiate a price reduction of $25,000 – or even $10,000 – he could have salvaged his deal and everyone would have been happy. But, you never get what you’re afraid to ask for and this inexperienced agent had been afraid to ask for a reduction in the agreed upon price. Don’t make that same mistake.
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