Be Deliberate
Be deliberate. Do not be in a rush. Or at the very least, do not appear to be in a rush. Further, people have a natural tendency to prematurely accept the other side's terms. So be cautious of early or hasty acceptance.
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We have discussed sellers’ tendency to accept quick and early offers, often following their broker’s advice. But in addition, regardless of which side you are on, the real estate process is a hassle. There is no getting around it. And people just want to get it done. So there is an incentive to rush the process.
Plus most Americans are not natural negotiators. Sure, we might haggle at a yard sale or when we occasionally go buy a car. But we don’t haggle nearly as much as some other cultures. Consequently many people are intimidated by the negotiation process. And again, people just want to get it over with. This is not a revelation, we all know this is true.
So in the world of residential real estate, we see brokers rushing the process to get paid sooner and with the least effort, and we have buyers and sellers who just want to get it over with. So everyone is more than happy to achieve offer and acceptance…today.
And it is a shame because negotiations most often benefit from a slow and measured and deliberate pace. So when the other side says, hey let’s just split the difference, you need not be in a rush to agree. Take the time to consider the question: Is splitting the difference a good deal for me? Or, maybe you’ll split the difference on price, but you need a greater Due Diligence Fee. Or maybe, you need to think about what you need. I am not telling you to not take it. I am telling you to give yourself the time to consider it.
And when the broker says, well, we just got another offer. Or, we have more showings lined up this weekend. Or, we don’t have any more showings scheduled. Whatever the case maybe, don’t allow yourself to be ushered into a negotiation and then rushed through it.
What’s that? They want to send over an offer tonight? Great, I’ll look at it in the morning. How’s that? They need an answer tonight? Why? They are considering another house? Well, if they absolutely need an answer tonight, they should probably buy the other one.
Think this is foolish? Well, if you can, I would encourage you to set the pace. Might you actually lose a buyer to another house tonight? Yeah, I guess it’s possible. But likely not. The buyer is going to offer on the house that best meets his needs and desires, and if that house is yours, he will wait for your response. If not, likely the other house better meets his needs and desires anyway.
Are there circumstances where a buyer cannot wait? Sure. But they are much more rare than your broker would have you believe. Take a breath. Slow it down. Sleep on it. The fact that your broker wants to wrap this up in a couple of hours does not mean you have to do so.
Okay, but what if you are the buyer? And the broker says, there’s another interested party who might make an offer. Tonight. Right? It happens. Should you break your pace and rush to counter? Well I admit, here the answer is trickier. And truthfully, there may not be a right answer. Just don’t let rushed and impulsive trump deliberate and smart. I would add: Don’t forget what you don’t know. First, you don’t know if there is, in fact, another interested party. Or another offer. Wait: Are you saying that a broker might lie about such a thing? Yes my friends, that happens. And even if there is another offer, you don’t know how it compares to yours. We will come back to this in Chapter 48, Be Skeptical.
As an aside, I will tell you, if the seller says, we have another offer, and yet, this is the one perfect house for you, then it becomes immaterial whether you believe they have another offer or not. From experience, I have learned the hard way, that you must proceed as if there is another offer. And this is not a good position to find yourself in.
In any case, if you slow things down, you will make better decisions, and provide smarter and more thoughtful responses, for your own benefit. You just will.
My point is: If the choice is between possibly losing the other side (the house or the buyer) and taking more time, I come down on the taking more time side, every time. First, the choice is often contrived, and second, better and smarter are almost always better than rushed and impulsive.
But I guess we have to talk about the worst-case scenario: What if you do in fact lose the other side, and then there is not another forthcoming? The buyer bought another house or the seller took another offer. Your broker will certainly tell you that you should be concerned about this above all else. And the broker will add: You may not get another (house or buyer).
Well yes, sure, be aware that this is a possibility. But don’t forget our previous chapter. You will do better, and you will negotiate yourself a better deal, if you don’t care too much. Are there buyers and sellers who cannot afford to take this approach? Absolutely. But if you can afford it, I strongly encourage you to do so.