Today’s slower real estate market has shifted the market in favor of buyers. Homes are on the market longer, inventory of unsold homes is higher, and price concessions from the seller are more common. In our brokerage this has increased the number of “uncommitted buyers” that we have been working with, both on the listing and buying side of the business. While statistically I don’t have enough data to say it is a trend, we’ve seen it it four times in the last two weeks, so it prompted me to write a new post. As a seller, it is important to understand this sort of buyer psychology, otherwise you risk losing potential buyers.
Here is the situation that we have been seeing multiple times:
- Buyer places a low offer on a listing
- Seller and buyer submit one or two counteroffers to each other, each time coming closer to agreement on price
- Before agreement is reached, and before giving the seller a chance to finish negotiation, the buyer suddenly moves on and bids on another property, leaving the original seller with no opportunity to negotiate.
Often a buyer’s emotional attachment to a house keeps them engaged and they will follow a negotiation through to conclusion. That conclusion may reach agreement on price, or it may simply end at a stalemate, but at least the seller is allowed to put their best offer forward. In today’s market, it is clear that there is a segment of buyers who feel empowered to make offers on multiple properties in search of the best deal. From a buyer’s perspective, this is great. You have the chance to seek out the best deal among a variety of properties. From a seller’s perspective it can be frustrating to lose an offer in mid-negotiation.
As a seller, how can you recognize this situation and have the best chance to sell your home? Here are a few tips.
- Pay attention to signals from the other agent – Often a buyer’s agent will say that “This is our best offer.” or “They are ready to make an offer on another property.” This one is tough. It could simply be a bluff as part of the negotiation, but it has an equal chance of being true. If you are close on price, put your best offer forward and try hard to close the deal. If you are still far apart on price, once again put that best offer forward and hope for the best, but recognize that they may walk away.
- Minimize the number of rounds of negotiation – If they are signaling an interest in other properties, don’t let the negotiation drag out to three or four rounds of negotiation. Sometimes conceding on price a bit more is a much better option than losing the buyer altogether.
- Submit one last counteroffer – Your agent tells you that the buyers have “just submitted an offer on another place.” Chances are that they are in negotiation and have not reached agreement on that property. You do have a small window of opportunity where you can still potentially catch their interest, but you need to act fast. Submit a final counteroffer in writing. Put your best foot forward. You want them to accept your last counteroffer, which puts a stop to their negotiation on the other property.