Growing up, my mother had a favorite expression: “you catch more flies with honey than with vinegar.” Her point was simple–and I’ve since found it is almost always correct: a person who acts politely and courteously, with regard for the feelings of others, usually has a better chance of meeting their goals. This old adage applies in the context of real estate transactions. The stakes are high: there are personal, emotional, financial and practical considerations at play. As real estate attorneys, much like other real estate professionals, we have a unique perspective that allows for the long view of this process. In this week’s article, we will make the case that there is a right way to be a Buyer in this year’s hot spring market.
Sellers are People too: It’s easy to forget, but their home is a personal place, often filled with memories, and selling can be an emotional process. This is especially true in cases where hardship is forcing the sale of the house. Most Buyers don’t meet the Sellers before closing. In the sterile environment of formal offers and contracts, all generated by negotiation through brokers and attorneys, it’s easy to lose sight of the fact that the Sellers are people with emotions. Being courteous and respectful, avoiding harsh, unproductive criticism of the Seller’s home or a “scorched earth” negotiation style helps to keep the Sellers acting on information rather than emotion.
Don’t Try to Win at Every Turn: There can often be many issues in a real estate negotiation: price, repairs, and dates, just to name a few. Most Sellers feel that they have “left some money on the table” for the Buyer, so when a prospective Buyer attempts to win on each issue it often alienates the Seller. Sometimes conceding on a smaller issue, even stating “I’ll concede on this issue in exchange for…” has the effect of demonstrating that you are a reasonable Buyer and still “winning” while gaining the Seller’s heart and mind.
Avoid the Expectation of Perfection: We walk by small problems in our own homes every day. It’s easy to become complacent–satisfied with the less-than-perfect state of our abodes. Just like people–no house is perfect (even brand new houses). It’s one thing to use some faults as leverage to negotiate a concession, it’s quite another to expect the Seller to patch every hole, repaint every wall, and make all of the other repairs that most of us forget to do in our every day lives. Avoid making the Seller feel like they’re being attacked or that they’ve failed as a homeowner–it usually is counterproductive in negotiations.
A Guest in the Seller’s Home: When you’re walking through a Seller’s home, remember where you are. You have not bought the house yet. Take off your shoes. Respect the Buyer’s privacy–they will likely know if you’ve rifled through their drawers. Treating a Seller with respect enhances the likelihood that you will receive the same courtesy as the purchasing process progresses.
Walk a Mile in the Seller’s Shoes: Most sales are not distressed sales anymore. In this new environment, treating a Seller as distressed when they are not is off-putting and therefore counterproductive to successful negotiation. Further, the Buyer that assumes a Seller is lazy, stupid, or irrational is missing an important strategic opportunity and is likely alienating the Seller. Understanding the Seller’s situation allows for more leverage. Perhaps the Seller is willing to concede on price for a faster closing. Instead of repairs, maybe the Seller would be willing to leave some personal property. Understanding the Seller’s limitations will allow for a more productive negotiation.
Do your Due Diligence to Apply Appropriate Leverage: In addition to your outward behavior to the Seller, be sure to understand the Seller’s practical considerations before making your offer. Price is never the only consideration. Doing your due diligence can often mean a more tailored negotiation that enhances the aspects of the deal that are most important to you. Perhaps your Seller is older and is going to find it difficult to move their possessions. A savvy Buyer may offer to pay for or defer the cost of movers to entice the Sellers to accept an aggressive closing date. Perhaps the Sellers feel the crunch of needing to find a new home to purchase. The savvy Buyer may offer to grant the Seller the right to extend for 45 days if the Seller can’t find suitable housing in exchange for a price reduction or some of the Seller’s appliances. Sometimes, there is no point of leverage–knowing this is equally valuable. Real Estate transactions shouldn’t be made with a cookie cutter.
Final Thoughts: At base, civility, courtesy, and professionalism is the foundation of effective negotiation. I’m certain that every Real Estate Professional reading this article has had clients who are selling mention that they are happy to be selling to “really nice people.” Perhaps they’ll ignore an oil adjustment. Perhaps they’ll allow the Buyer to move in a few days early. Perhaps, they’ll allow the Buyer to close a few days late. The savvy Buyer will help maximize their chances of buying the home of their dreams on favorable terms by being one those “really nice people” who understands that you catch more flies with honey than with vinegar.
Stiles Law, with offices located in Boston and Marshfield, Massachusetts, is a firm concentrating in real estate conveyancing and mortgage lending services, representing buyers, sellers, borrowers, banks, mortgage companies, investors, builders and developers in all of their real estate and mortgage transactions. Stiles Law serves all areas of eastern Massachusetts–the North Shore, Boston, and Cape Cod, in addition to the entire South Shore, including: Plymouth, Kingston, Duxbury, Hanover, Pembroke, Marshfield, Scituate, Norwell, Cohasset, Hull, Hingham, Weymouth, Braintree, and Quincy.
Copyright © 2015 Stiles Law, All rights reserved. Stiles Law is a Massachusetts licensed law firm and all content is based on Massachusetts law. The information presented above is meant to be used for general informational purposes and it should not be construed as legal advice or legal opinion on any specific facts. No child labor laws were breached during the creation of this Blog, further Bob Bonkley was compensated for his likenesses and appearances in the same.