Control Time: Set a Deadline
If you’ve ever watched a telethon fund raiser, you quickly realize that 90 percent of the money is raised in the last hour. That’s regardless of how long the telethon lasts, whether it’s 5 hours or 50. It isn’t until it gets down to the actual deadline that people contribute.
It’s the same in journalism. Talk to any reporter and he or she will tell you that both their bane and their salvation is the deadline. They hate deadlines because of the pressure, yet they would never get a story written without them. (It also applies to writing books, as the publisher of this one will quickly tell you!)
TIP
No deal ever closes without a deadline.
The same is true in real estate. This is not to discount the element of invested time that was noted above, but deadlines are also crucial. (By the way, deadlines and “time invested” are not contradictions, but two sides of the same coin. Yes, you are far more likely to get what you want if you get the other party to invest time. But you’ll never get what you want until the deal closes and, in most cases, it won’t close without a deadline.)
The best example of this is in the sales offer that a buyer makes to a seller. All sales agreements give the buyer the opportunity to state just how long the offer will be open.
Usually this deadline is the last consideration of the buyer. Time is always of the essence in any deal, and while it is possible to make an open-ended offer, “until accepted” (most unwise as we shall see) most offers give the seller a specified time within which to accept.
I have sat in with sales agents who advised their buyer clients,
“Give the seller a week to think it over. She might go along with your deal.” That’s a lot of hooey! In a week, the seller may receive three other offers, two better than yours. Further, in a week the seller may have talked herself into your offer—and then out of it.
The best advice, in my opinion, is to set a deadline that forces the seller to come up with a decision. In most cases, that’s just one day, 24 hours, or less.
I can hear the protests from those real estate agents who strongly believe in giving the other party plenty of time. But I stick to my guns. Setting a deadline, a realistic deadline, is the best way of get ting your offer accepted.
Here’s why:
- It’s Enough Time. Assuming that the sellers can be reached, one day usually gives them plenty of time to consider the offer. If they begin looking at it by six o ’clock, they should fully under stand it by seven, and they can chew it over by ten o’clock. That’s enough time for them to invest so that they will feel that if they simply reject it, they will have lost something (time invested).
- Sellers Seldom Accept First Offers. The theme of this book, after all, is negotiation, and sellers often see the initial offer for what it probably is: a “trial balloon,” the first step in negotiations. While it’s true that a seller who counters the offer has legally rejected it and given the buyer complete freedom to walk away from the deal, most sellers are willing to take that chance. They under stand that often the buyer is actually looking for some sort of counteroffer with which to work. In other words, the process of buying a property usually involves offer, counteroffer, counter counteroffer, and so on. Thus, one way to get to the counteroffer is to set a deadline.
- Procrastination Is Easier Than Action. Consider it from the seller’s (or other party’s) perspective. They’ve received an offer. It’s not what they want. The price is off; the terms are wrong. What are they to do?
If there’s no deadline, one appealing thing to do is nothing. If they don’t act, maybe the buyer will have a change of heart and sweeten the offer. Further, if they wait, maybe some other person will come in with a better offer. Putting off making a decision, without a deadline, can often be the most tempting decision.
On the other hand, if there is a deadline, some action is forced. If no action is taken, the deal is dead. The only way to keep it alive is with action. (In real estate, if an offer is not accepted by the dead line, it’s automatically dead.) When there’s a deadline, procrastinating threatens the loss of the deal. It now becomes preferable to take action.
From the buyer’s perspective, setting a deadline may be the best way to get the seller to act. Either the seller will outright accept the offer, reject the offer, or make a counteroffer. In my experience, most often the counteroffer is the result. Once the counteroffer (with its own deadline for the buyer) is made, the negotiations can move for ward. Keep in mind that as counteroffers are made, both parties are investing increasing amounts of time in the deal. (See Chapter 12 for more information on working with an agent and deadlines.)
TRAP
Just because you set deadlines doesn’t mean you’ll always get the deal you want. The deadline should be considered one tool to be used in conjunction with ” many others. Beware of turning a deadline into a “take it or leave it” threat. As we’ll see shortly, this works less often than most people think.