Negotiation is still an art
It’s been possibly months of looking for a house or months of waiting for a buyer for your home; two very different perspectives.
Then the day buyers find a house they can imagine as their home. There’s great satisfaction as a broker participating in ‘that moment.’ Moving forward the broker’s focus will be on building the offer and negotiating it into a contract.
Sellers had a similar moment when their reason to sell evolved into action. Now they’ve been cleaning, straightening and readying the house. And every day, they’ve hoped that the buyer of their home will come through their door. (This column won’t address foreclosures or bank-owed properties prevalent in today’s market.) Their broker has just called to say they’re going to be getting an offer… finally!
For both the buyers’ broker and the sellers’ broker, the upcoming hours or days are the most important; negotiating an offer from one party to another and creating a contract between them.
Both brokers role is to help their clients negotiate terms without disclosing either of their confidential motivation.
The PURCHASE AND SALE AGREEMENT: Washington State’s and specifically our Northwest Multiple Listing Service (NWMLS) is one of the most respected and finest in the nation.
(FACT) Our contracts are constantly being updated and improved, to the chagrin of many but the satisfaction of most brokers.
It used to be said and is still bemoaned by a few, “I remember when we used to write it on the hood of the car and a handshake…” No longer; it’s a litigious world.
Our amazing contracts are intended to make clear ‘intent’ to all parties involved. That the contract over the years has become an average of 15 pages means far too many just say ‘Where do I sign?’
Skilled brokers explain the offer in concise terms. It’s comforting to know that the language of the offer has been written to protect both parties from misunderstandings later. The first page is titled “PURCHASE and SALE Agreement; Specific Terms”.
The “PURCHASE” part: The buyers’ broker representative is the one who writes up the offer that will hopefully become the contract.
Our NWMLS allows and encourages us to be able to prepare these documents online. The offer should be professional and legible; after all, it hopefully will become a legally binding contract involving hundreds of thousands of dollars in exchange for a home and land.
Brokers perform duties usually confined to that of an attorney; we put together legally binding contracts between two or more parties.
However, we’re both authorized and limited by Washington State’s RCW code: We can fill in the blanks; we are not authorized to create language outside of those contracts.
The “SALE” part: The listing broker received the call from the buyer’s broker: ‘I’m writing an offer’. Hope and premature relief are likely reactions in today’s market.
The NEGOTIATION: In our technological age offers can be scanned, e-mailed or faxed. It’s the creating of that contract that sometimes becomes an art form, a dance, a give and a take.
In the past, it was sometimes simple but rarely is that in this market.
“In the old days” (scratchy, crotchety voice) the buyers’ agent/broker presented the offer to the both the listing agent and the sellers in person. It was a face-to-face meeting to go over the details, show comparable properties, and work out details.
This was time-consuming, with busy schedules that are challenging to coordinate. And so, about 98 percent of all offers are put into the fax or e-mailed, one broker to the other. After all, it’s all about the numbers…
Not entirely. This is often a very personal and emotional time for all parties. Low offers are the norm; it’s unquestionably easier to put those offers into an e-mail rather than face the sellers.
Yet this negotiation sets the tone for 45 days before the transfer and often beyond.
Low offers in the black and white ink of the e-mail potentially and more likely, give offense. And once your buyers’ offer is e-mailed, you have no control on when it is presented.
I’ve had a listing broker drag it out for days; once it has been e-mailed, you can’t definitively tell your buyers that the sellers have seen it. Presenting the offer, I believe, best represents buyers. Having the opportunity to ‘introduce’ the buyers to the sellers, who they are, what they do and what they like about the home sets a tone and often makes the difference between success or failure.
Finally, a listing broker may have told their sellers the home was priced too high; hearing that from another broker with another market perspective could be the key for the seller to open the door to reducing the price.
Negotiating is an art. Many contracts (currently most) were created from offers that were miles apart at the start.
Brokers who have mastered this art ‘keep everyone at the table’ no matter how ridiculous it may have seemed at the outset. Especially in this current climate, it’s not the time to for sellers to have the luxury of taking offense; this may be the only buyer for their home.
My watchword is “I’ll never let it die on my table;” my clients, whether buyers or sellers, will counter even if it is repeating their last number again. We’ll continue to volley it back to the other side.
I encourage the other broker to set that same goal with their clients and we may eventually come to an agreement.And finally and foremost, keeping the tone of our discourse civil and courteous allows our clients to experience the sprit of that long ago handshake when a man’s or a woman’s word – was the last word. It’s an art, a satisfying one.