Check the facts before you open your mouth – its the first step in negotiating
Let me just start by saying this is my effort at sharing an experience I encountered today so that newer agents out there do not fall into the same trap. Hopefully someone can walk away having learned something positive from this experience.
I have always believed the first rule of negotiations is to know where you stand before you engage the other party. Pretty elementary, right? Sort of the first rule of negotiations 101.
Well, it seems that little gem of advice is sometimes lost to Realtors out there who proclaim themselves as being “professional negotiators” as if that were a special badge of honor that only a handful secretly receive. We Realtors are all negotiators, it just seems some are better prepared and do the prep work to insure they do not look incompetent.
Unfortunately, these days, in their desperation to close any deal, agents sometimes open themselves up to ridicule and more importantly, do their clients a dis-service by not being adequately prepared when they negotiate. Not only will they not get a deal, they may possibly lose the client whom they failed to protect.
I am engaged with a veteran agent (probably 30 years in the business) who is on the buy side of a deal. The deal is taking longer than anticipated because one of the lenders is dragging their feet in coming to a decision on a short sale. Everyone is frustrated including me, so I understand his impatience. But nothing can happen until the second approves the deal.
But today he was trying to re-negotiate the price on the deal in a back-handed way which I did not really appreciate. First, he claimed that the prices in the complex were falling drastically in the past two weeks and he now believed his client was over-paying for the property. I told him if he believed that to be true, then his clients had the right to back out and I would return the deposit; I have a back up offer that will be glad to fill in. (His claim of prices in the complex dropping is incorrect). Secondly, he claimed we may not close in time to claim his client’s $8,000 tax credit because we cannot, at this point close escrow by June 30 (This is true). Finally, he claimed his client was further harmed because the California Tax Credit (up to $10,000) had been exhausted within 2 weeks of it being announced (This was news to me) and he couldn’t get that either, so he wanted to reduce the offer price.
I understood the message he was trying to convey: 1) that the prices in the complex were falling and 2) the California Tax Incentives had run out and his client was depending on that. He was claiming his client was hit with a double whammy. Well, I would have been sympathetic if he had verified these claims before he made them to me and tried to unilaterally re-negotiate the contract.
1. He was simply uninformed about the prices in the complex. They were not falling dramatically, an identical unit had come on the market only 7 days ago for nearly $10,000 more than the price he offered to pay. This is basic stuff, you check the comps before you talk prices. 2. His claim that the Tax Credit fund had been exhausted, was again, an incorrect claim. http://www.ftb.ca.gov/individuals/new_home_credit.shtml The fund is only 57% depleted! I have no reason to lower the price; I am thinking he should raise the price since the house looks like a better deal now than before.
I shot down the grounds for his argument in 5 minutes. He could easily have verified the information if he took 10 minutes to go online and look them up before he made these false claims to me. This is an individual who has been selling real estate for probably close to 30 years. This was simply embarrassing for him and certainly did not make his client’s case any stronger. Now I question whether I want to continue to do business with him or simply deal with the back up offer. What was he thinking? All he managed to demonstrate today was that he doesn’t know the first thing about negotiating and now has planted a seed in my head as to whether he is a competent agent or not.
Folks, check the comps and do your due diligence before you start making claims which could back fire on you and your clients. That’s your job.
