It would be a perfect world in the real estate business if buyers and sellers came to terms quickly, easily and without much negotiation. Sometimes this happens and the transition from contract-signing to close seems effortless.
Most of the time, however, there are negotiations back and forth that come down to the pillows on a couch or the planters on the porch. This seems silly to most, but there is a great deal of emotional attachment involved in a real estate transaction that plays a role, in addition to the price attachment. And although the market has drastically improved from the past four years, there continues to be a major price attachment.
When listing a home for an owner, there is always a presentation that includes market comparables with recent sales and current listings. It is my professional obligation as a realtor to guide my clients to price their home comparable to the market for a quick and successful sale.
Most of the time I have success at this, but there are some clients who insist on listing their home at a price they feel comfortable with; whether it is in the price point of the market or not. When this happens, I always make my client fully aware that they have to be open to any offers brought to them and if an offer is brought to them that is less than acceptable, they should always submit a counteroffer.
Recently, I had a buyer who fell in love with a home in a community in Jupiter. We submitted an offer just below fair market value and the seller did not respond. The seller’s agent and I negotiated to see if we could get the seller to respond but they wouldn’t.
They felt like my buyer was not a “real” buyer and wanted my buyer to raise his offer. Just as I anticipated, my buyer’s response was “Why would I bid against myself?” They became insulted with no response and decided to look elsewhere for another home.
This happened in April and my client was from New York. They did not visit on a regular basis, but made two additional visits to Palm Beach in May and June before they decided to wait until the end of the summer to begin their search again. During the summer, I contacted the agent who still had the listing on the property we made an offer on. He informed me the seller would still not respond.
September came and my client visited again. In April, they were looking at homes in the $2 million to $3 million price range. By September they realized they wanted to find a home for this season and decided they would spend up to $4.5 million. This opened up another level of homes that would now be potential properties available in golf course communities.
Even with this news, they still loved the first home they submitted an offer on. I went back to the seller’s agent for a third time. Again, the seller would not respond. I encouraged the agent that as long as he could get a response, we could engage in negotiation. Still no response.
I was disappointed for my clients since they truly wanted the home, but they were also informed of the market and were not willing to grossly overpay for the property. The purchase price together with renovation costs would place them at the top of the market within the community.
We decided to focus on other communities and found another home within a few weeks. The home was close to $5 million and the sellers negotiated right away, which kept my buyers engaged and ultimately ended up in a sale. They closed last week and are very pleased and excited about the new home and spending the holidays in Florida.
Ironically, just yesterday I received a call from the agent on the original home my client wanted to purchase and said his owners were willing to counteroffer. Unfortunately, it was too late. They missed the opportunity to sell their home when they had a qualified buyer and an offer in place. Today, that same owner reduced their price in the multiple listing service by $250,000.
This is a perfect example of why I always recommend to my sellers that they counter an offer even if they feel it is too low for acceptance.
Each buyer is different and in order to engage in negotiations, the counteroffer has to come back to the buyer or nine times out of 10 the buyer will walk away.
As I explain to my sellers, it may be an exercise on your part if the offer is very low, but it may also result in your home being sold — so be positive and react before the buyers decide to move on to another property! ¦
— Heather Purucker Bretzlaff is a Realtor with the Corcoran Group in Palm Beach. She can be reached at 722-6136.