Tips and Traps When Negotiating Real Estate: Never Offend the Buyer/Seller

Play the Players: Never Offend the Buyer/Seller

It’s often been said that in real estate the three most important words in determining price are, “Location, location, location!”

When negotiating, the three most important words are, “Don’t get personal!” I’ve seen this rule violated more times than I want to remember.

Typically it occurs in a purchase. A buyer wants a home and offers what she thinks is a reasonable price. The seller, however, figures it’s worth a lot more and is offended by the offer, so he turns it down and counters at only slightly less than the asking price. Now the buyer has been put in a huff by the intransigent seller. So long as buyer and seller do not personally meet, but negotiations are car­ried out through a broker (something I do not always recommend, as we’ll see shortly), progress on the deal can continue.

But just let the typical buyer and seller meet for five minutes and the deal is history. The buyer will quickly tell the seller how ridicu­lous the counteroffer is. The seller will tell the buyer that she can’t recognize true value. The buyer may counter with a comment about the seller’s deficient intelligence. The seller may make a disparaging remark about the buyer’s forebears. Negotiations very quickly break down into dispute. Both sides take umbrage and neither wants to deal with the other “no matter what the price!” Of course, in the real world no one is going to refuse to buy or sell “no matter the price.” But if the buyer offends the seller (or vice versa), the price could end up being a lot worse for the offending party.

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When you’re negotiating, think of it as business. Yes, occasionally you may want to appear injured or aggrieved by something the other party says or does, but only as a ploy. Never take it personally, and if you’re smart, never do anything to let the other side take it personally. You don’t want to be put in the posi­tion of having to apologize to save the deal.

The wisdom of never offending the other party came home to me when a close friend was involved in a quarrel over a purchase. My friend had bought a bare lot in the mountains and began construction on a home. During excavation for the foundation, she discovered an old, large, unused diesel storage tank was buried there. It

had been used to store fuel for logging equipment. The contractors began removing the tank only to discover it still contained some fuel and was leaking. The ground surrounding it was soaked in diesel fuel. The building inspector noticed this and eventually the county environmentalist required that hundreds of yards of contaminated soil be hauled 350 miles away to a toxic-waste dumpsite. The cost was more than $10,000 and my friend, naturally, wanted the seller to pay for it.

The seller “stonewalled” and claimed that he had disclosed the problem and that my buyer friend had understood and agreed to shoulder all the cost of removal. That, in fact, was the reason he had sold for what he claimed was such a low price.

According to my friend, this was simply untrue and she had every right to be offended. Her legal recourse was to get an attorney and sue. At the very least, the seller would have had to pay some of the cost—very likely all of it.

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But my friend really didn’t want to expend the time, emotional stress, and cost of litigation (something more people should con­ sider before going to court). So she negotiated instead. She met with the seller and she did indeed bring her attorney, who in no uncertain terms explained what he could and fully intended to do to the seller.

However, my friend was cordial, never mentioned the obvious (that the seller had outright lied and was continuing to lie), chatted in a friendly matter, and made it perfectly clear that she didn’t con­ sider this a personal matter. It was strictly business.

The next day, the seller called my buyer friend on the phone and asked if there wasn’t some way they could compromise. She replied that it was nice of him to call, but she really didn’t see how a com­ promise was possible. He had put the tank in. Between the two of them, they both knew she hadn’t known about it. However, if he wanted to pay for removal costs, she would certainly not add on any of the hefty legal charges that were sure to be involved in a lawsuit.

He said he would think it over.

Two days later he called back and said that because she was such “a nice gal,” he’d take care of it.

Yes, it’s obvious he was wrong, she was right, and it ended the way it should. But consider what the outcome could have been if my friend had taken it personally, accused the seller of lying, refused to talk to him, or even attacked him personally. He may have felt cornered and forced to hire his own attorney to defend himself. The ultimate out­ come might have been similar, but it could have taken years, cost tens of thousands of dollars for each of them, and kept my friend from get­ ting on with her life.

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Beware of taking your frustrations out on the other party. You may just give them the ammunition they need to shoot you down.

Think about it. Would you rather deal with someone whom you find pleasant and likeable or with someone whose guts you hate? Would you prefer to pick up the phone and call a person who you know will respond warmly, or someone who will start yelling at you? ‘fears ago I had a boundary dispute with a landowner and called him to ask if we couldn’t find a way to work together and settle it. He harangued me on the phone, accused me of trying to pressure him (which I was not doing), called me a liar and a cheat, and finished by telling me he’d “see me in court.” Now, was I going to call him back and attempt to work out an amicable settlement? Or was I going to wash my hands of it and turn it over to my attorney to handle? In the end, I did prevail.

But it took longer, cost more, and to this day we still don’t speak though we own property next door to each other.