Negotiating a Successful Deal: Pushing the Time Line
Madeline presented the offer and reported back that the sellers understood it, but weren’t too happy about it. They said they wanted to take a few days to think about it. She said she was worried, how ever, because the seller’s agent, Max, said that other brokers were calling and saying they were hoping to write up offers very soon. It didn’t look good.
Dana got on the phone and asked Madeline if there was a time limit on their offer. Madeline replied, “Yes, I always allow the sellers three full days. It gives them time to come to a decision. It was part of the offer you signed.”
Dana rubbed his forehead, told Madeline to hold for a moment, and looked at Sondra. He said, “We’re going to lose the property. While we’re giving the sellers days to decide, other brokers will come in with offers that probably won’t be contingent. The sellers will probably accept the first full-price offer they receive that’s non contingent. And we’ll lose out.”
Offers must be presented to sellers as they are received, even if the sellers are in the process of considering an earlier offer. Agents who wait to present a second offer while the sellers are considering a first one are not living up to their fiduciary responsibilities.
“You’re right,” said Sondra. “Tell Madeline to communicate to the sellers that we’ll give them until 6:00 tonight to sign; otherwise our offer is off.”
Dana looked at his watch. “It’s already 3:00 in the afternoon,” he said.
“Right,” said Sondra. “Either they accept our offer right now, or we’ll look elsewhere. We don’t want to give them time to wait for a better offer to come in.”
Time is the essence of any negotiation. Either you make it work for you, or it works against you.
Dana told Madeline what they wanted, and she protested that their offer had already given the sellers three days.
Dana said, “We can withdraw our offer any time before they sign, right?” Madeline agreed they had that right. “Well, then give them until 6:00 tonight. Tell them we’re looking at other properties, which we are. If they don’t accept, we’ll pull the offer.”
Madeline said she didn’t like being so harsh with sellers. But Dana insisted, so she said she’d do what she could. She called back an hour later and said she and Max were going to meet with the sellers at 5:00 to see what could be done.
Sondra and Dana sat by the phone and it rang at precisely 6:00. It was Madeline. She said, “They signed. You’ve got your new home!”
Some agents don’t like the pressure of tough negotiating. If that’s the case, then either demand that your agent perform to your desires or get a new agent.
Sondra and Dana cheered. Then Madeline said, “They made a few changes and I’ll be right over to have you sign them.” “What changes?” asked Dana. “Very little,” Madeline said. “I’ll explain them when I get there,” and she hung up.
By 7:00, Madeline was there. The sellers had added two new conditions to the sales agreement. The first was that they had raised the price by $5,000. The second was that they gave Sondra and Dana a maximum of 30 days to find a buyer for their existing home.
Sondra said, “I think we can sell the property under those conditions. But, I don’t want to pay any more than the asking price for the property.”
Dana looked at her and said, “But, it’s in the agreement they signed.”
“Too bad,” said Sondra. “It’s not in the agreement we signed.”
Whenever there’s a counteroffer that, differs in any way from the original offer, it has to be considered as an entirely new offer. You’re not committed to accept any thing you didn’t sign for.
Dana looked at Madeline, who looked worried. “Do we have to accept the additional $5,000 in price?” he asked.
Madeline shook her head, “Only if you want to buy the property. I talked to those sellers until I was blue in the face, but the only way they will accept the contingency is if you come up with more money. I don’t believe they’ll budge another inch.
“Besides, Max says that another agent wants to come in and pre sent an offer at 9:00 this evening. You’ve only got until then to agree to what the sellers want. That’s their time limit.”
What makes negotiating tricky is the threat of the competing offer. If the sellers have only you, then you can hold out for a better deal. But if others are competing ™ to buy, then your position is weaker. Similarly, if you have other properties you’re considering as a buyer, your position is stronger than if you have only the one you’re bidding on.
Sondra and Dana asked to be excused and went into their bed room to discuss it by themselves. Sondra said that she thought having to pay more than the asking price was a rip-off.
Dana wasn’t so sure. He said that prices of properties were appreciating rapidly in the area, more than 15 percent the previous year. Further, in a month of looking this was the only property they had found; hence they didn’t have any alternative property to make an offer on. Finally, with prices going up, if they didn’t get this house, they might be priced right out of the market.
“But,” Dana said, “the crucial thing is the other offer. I don’t think our agent, Madeline, is the best negotiator, but I think she’s honest. I’m sure that Max, the seller’s agent, did say there was another offer coming in. And if he told her, he told the sellers. And if that’s the case, I doubt they’ll budge, at least until they see the other offer. And even if it’s for just the full price, not the additional $5,000, with no contingency, they’ll take it. I would.”
Sondra nodded. It made sense.
They came back out and told Madeline they would pay $5,000 more. She breathed a sigh of relief, took out her cell phone, and immediately called Max, who was waiting with the sellers, to tell him that the buyers had accepted. They had a deal.
Once the acceptance of an offer (or, in this case, a counteroffer) without changes is communicated to the other party, it’s a nearly complete transaction. Of course, the paperwork must always be signed and quickly delivered to all parties. In real estate, according to the Statute of Frauds, no sales agreement can be made verbally.