HOW GREAT SELLER’s AGENTS Negotiate

Part 2 of 2 of my series on Negotiating by great agents: One of the most important things we do in real estate is one of the things that we get the least training on: negotiation.  This is my letter to my fellow agents (aka a plea) to read this and know how to not only get your clients to their desired results, but do so in a way that doesn’t alienate everyone in the process.  These tips are based on the seller-leaning market in Las Vegas right now, obviously every market is different.  In some, there is no negotiating at all, it’s whatever the seller wants/can get, in some, the buyer has all the power.  

You have a seller, and are ready to list and sell their home. Preparing to negotiate starts well before you list the house…

1. Talk to the seller at length about the market, and the things they are likely to see in an offer.  If buyer’s requesting closing costs assistance is likely, tell them.  If FHA offers are likely (with associated appraisal conditions) go over them.  Set the expectations so they aren’t surprised or off-put by an offer that in actuality is a reasonable one.  Here is a big question to ask in a seller’s market: “If I bring you an offer in the first few days, are you going to be happy?”  I love this question, as the answer should be yes, and if it’s not, deal with it right there and then.  Nothing worse than a full price offer and a seller who feels they need to get more. 
2. Don’t set pre-conditions in the MLS.  This is another point to consult with the seller on.  I’m amazed how many listings I see sitting for weeks on end that read “seller won’t look at offers below list” or “seller won’t pay closing costs”.   Why would you reduce your own showings and opportunities to sell the home?  The fact is, buyers change their minds after they see a house vs reading about it.  A buyer that thinks they want closing costs help may decided to get it from their 401K or family if it’s a home they love.  Get as many offers as you can to your client, advise them against screening out offers, they can always counter them.  
   
   
3. If you have just one offer and aren’t likely to get multiple offers, talk to the buyer’s agent, feel out how strong the buyer is.  If you have concerns, don’t be afraid to advise the client to counter them on terms even if the price is right. You want to make sure the buyer wants the house, even if it’s your only offer.  Talk to the lender about how they underwrite and fund, and how many days they need to get an appraisal done and underwritten loan approval.  If you can’t reach the lender, that’s a big warning sign to relay to the seller. 
   
   
4. If you have multiple offers, things get trickier and perhaps more controversial.  I am a heavily opposed to the idea of “Highest & Best” offers.  If that’s important to your seller, and you know you will get multiple offers, just put right in the MLS that you want the best offers up front.                                       
   I advise clients in multiple offer situations to choose the strongest offer and buyer, and work with them first.  Give them a short time frame and hold the offers.  The reason I do this: “highest & best” requests are more likely to scare off buyers who don’t want to compete in a bidding war than get you the strongest buyer. It’s your job as a listing agent to call the agent, lender and vet the offers to present advice on strength, and information on terms, to the seller.   What if the weakest buyer who is least serious, comes up $5,000 over list price just to get the house, knowing you’ll accept, but it won’t appraise anyway?   Maybe a counter offer over list to the buyer with more cash might make more sense in lieu of the appraisal issue.  Or counter more than one offer, but only the strong offers. 
   
   
5. If you know you will have many offers, just advise the seller to set a deadline in the MLS for offers so agents aren’t losing their minds.  Buyer’s agents have a tough job in this market, they know the house can sell any second and it’s better to set the expectations up front.  And it will save you many phone calls and panic. 
   
   
6. (almost) always… let the other side reject.  This is a biggie - it’s far easier for a buyer to walk away from no response or a rejection than a counter offer. My caveat is if the offer is weak in other ways than price that indicate a lack of seriousness of the offer (low ball investor for instance).  Sometimes a rejection will bring you a stronger offer, but if you aren’t too far apart, always counter. 
   
   
7. Always encourage backup offers.  If you take an offer, in our MLS you would put it typically into “C” contingent status.  Encourage agents to leave their offers as backup or even showings for backup offers.  This is critical if the buyer doesn’t follow through or the deal falls out due to issues in due diligence.  Too often listing agents don’t embrace the backup offer.  

Originally published on ActiveRain, September 29, 2016.