The last time I had a seller who refused to accept a dime under his listing price, he ended up selling for nearly $30,000 less. It was 2009, when home values were just beginning their free fall, so that obviously had an impact on his situation. But he could have come out of the deal in much better shape if he had been willing to negotiate. Instead, he turned away the two buyers who submitted offers slightly lower than his ask. Eventually, he grew so desperate to sell that he had to take anything he could get.
I don’t want to see any clients lose out on the best deal possible because they’re too stubborn to back off on some of their demands for the greater good of the transaction. So up front, I tell every buyer and seller I work with: Be prepared to lose something in the negotiation. You have to give up something in order to get more of what you want.
Reason to Stay in the Game
I tried to tell my seller the same thing. We had listed his home for $145,000, which was still a reasonable price at the beginning of the downturn. We got an immediate offer of $136,000, and knowing where the market was headed, I told the seller it was a good offer. He insisted on getting his full ask, but I suggested instead that we could ask the buyer to cover the closing costs or forgo minor repairs in return for a discounted sale price. Both sides needed a reason to stay in the game if the transaction was going to move forward, I said.
The buyer raised his offer twice, and even then, my seller came back asking for another $500. His unwillingness to meet in the middle drove the buyer away. We would go through this process again with another buyer months later—after the market was even further in the tank—only to lose the deal again because my seller refused to negotiate on the price. I decided I couldn’t work with my client anymore, and later, he sold his property while working with another agent for $116,500 after it became clear he wasn’t going to do any better. Refusing to negotiate even when he had a better offer on the table cost him dearly in the end.
There will always be clients who are averse to listening to their agent’s advice. But that stubbornness should serve as a red flag at the beginning as to how a potential transaction may unfold. It’s not likely to go well. It’s impossible to negotiate with someone who refuses to see the other side’s perspective. We have to try to teach our clients flexibility and the importance of addressing the other side’s needs as well as their own.
We’re like referees. Without our guidance, deals would grow contentious between buyers and sellers who don’t have the skill to negotiate. That’s the worst kind of deal because egos get bruised and the deal gets personal and falls apart quickly. As professionals, we have a responsibility to help our clients see how the give-and-take can foster a win-win.
I think that’s where many agents misunderstand their role as a negotiator. They think defending their client’s best interest means going to the mat with every demand, big or small. I try to explain to my clients that what they want most of all is a smooth transaction that closes—one that minimizes conflict and takes up as little time as possible so they can reach their goal more quickly. If I can bring my clients into the deal with the understanding that they may need to give to get, then everyone can end up feeling satisfied.
So when I tell my clients at the start of a transaction that negotiations involve giving something up, I can gauge whether they’re willing to trust my advice. Most aren’t as unwavering as my seller, who wouldn’t listen to a word I said. But for those who remain inflexible, I know the deal won’t get far—and it’s not worth my time to continue the working relationship.