Negotiating a Market Where 'Everything's Negotiable'
Saturday, September 29, 2007
When Will Reed bought a two-bedroom condominium in Bowie two years ago, there was no room for negotiating with the sellers -- on price, repairs, closing-cost help or anything else.
"The market was so hot that they could say, 'Here's the price, and either you offer that or more.' And if you didn't, someone else would snatch it up before you knew it," Reed recalled.
The situation was reversed when Reed put the property up for sale this spring: Buyers were in control and demanded to negotiate -- asking sellers to lower prices, pay for renovations, help with closing costs, you name it.
So Reed compromised. And it worked.
"I consider myself very lucky to have actually sold the place, with the market changed so much," said Reed, 25, who works in law enforcement. He got two offers in 3 1/2 months, but discussions with the first would-be buyer dragged on so long that Reed backed out. The second set of potential buyers asked for more concessions than he expected, but not more than he could afford, so he agreed to many of their terms.
The price the buyers finally paid was close to his mid-$300,000s listing price and higher than they had originally offered. They raised their price in the negotiations but asked for more help with closing costs -- about $12,000 -- because they were short on cash.
Price is usually the biggest item on the table, but it's not the only one that comes into play these days, agents and real estate lawyers say.
"Sometimes it's more important to a seller to find a buyer that's qualified so that they can settle sooner," said Kim Spear, an agent with Keller Williams Realty's Dulles North office. For others, "it might be better to find a buyer who will let the sellers stay in their house while a new house is being finished."
And for sellers who are moving up to a more expensive house, "getting their price is usually more important," she said.
For buyers, too, price is often the biggest consideration, Spear said. "Buyers right now just want reassurance that they're buying a property that will increase in value."
But because it's hard to establish price in a slow market, buyers sometimes submit lowball offers to see what happens.
Even though buyers have more leverage than in the hyper-competitive market of two years ago, they can still turn off sellers if they push too hard, warned Andrew R. Berman, director of the New York Law School Center for Real Estate Studies.