The art of the real estate offer

Every buyer wants the home of their dreams for the lowest possible price. Every seller wants the most amount of money with the least amount of hassles or obligations. Often this difference of viewpoint and personal goals can collide during a buy-sell negotiation. It is the job of the Realtors to coach, guide and advise both sides so that nobody gets offended and everyone can come out a winner. It is often said that either everybody wins or nobody wins.
Frankly this is easier said than done, and there is an art to getting what you want without offending everyone else involved. I’ve been involved with deals on both sides this past month where one party was offended by the other. In one case we represented the seller of a completely remodeled and gorgeous home in Morgan Hill. An out-of-town agent emailed a low-ball offer without ever calling our office. The seller who had just finished the renovations (the house had been on the market for less than four days) refused to acknowledge or counter what they perceived was an insult.
What could have been done differently to make this less offensive and possibly successful? I would have advised my buyer that before submitting a low offer on a fresh listing, we should have a conversation with the listing agent. Presuming the listing agent was forthright, we might have discovered that the seller was price sensitive, and wouldn’t entertain a low offer until the home had been on the market for a number of weeks. The buyer could consider increasing their offer, delay making an offer or not make an offer at all. If the buyer insisted on presenting a very low offer, the least we could do is call the listing agency in advance of emailing the offer and explain what we planned to submit.
On the second deal, we represented a buyer who wanted to offer slightly less than the asking price. The seller’s agent explained the seller had concerns about finding a replacement home, and would like 30 days in the home after the deal closed. My buyers submitted the offer, and offered to rent the home to the sellers for 30 days, and potentially 60 days if needed. The buyers were OK when the sellers countered at almost full price, but what offended them was that the seller requested that the first 30 days of rent be at no cost. My buyer felt the seller was trying to take advantage of them.
How could this offense have been avoided? I have a similar situation on another home I’ve listed, and before we accepted any offers, I informed every agent exactly what the sellers wanted and exactly what conditions were important. Those fully informed agents and buyers could write offers without any surprises. By disclosing all the information upfront, we avoided any misunderstandings or counters that might offend either parties.
The bottom line is communication. If the Realtors have a conversation designed around discovering the needs and concerns of both parties, they can guide their clients and structure offers or counter offers in a manner where the wants, needs and interests of clients are stated and protected, without offending the other side. This is not something novices understand, however skilled Realtors do this every day.
City/Median price/Percent Change/Sales Volume/Percent Change
MH/$706,500/+13.4%/76/-2.6%
Gilroy/$580,000/+18.4%/66/+24.5%
Holl/$415,000/+2.9%/47/unknown
Source: Core Logic through December 2014