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Friday, May 30, 2014

First time buyer – What should I expect of my agent in the negotiations on a deal?

Answer- Your agent will be trying hard to protect your best interests and present a strong case for you as a potential buyer. Many buyers have expectations of their agent in the negotiation process that border on the unethical or illegal. The buyer who asks his agent to lie to the other side or expects that as a negotiating tactic is way off base and probably will lend up being fired by his agent. Yes, agents do fire clients some time and it’s usually over boorish behavior.

Your agent has a fiduciary responsibility to you, which includes carrying out your wishes to the extent that they are legal and ethical. He/she does not owe you a level of obedience to your wishes that extend across those borders of proper business conduct; so don’t even ask. 

Most agents will try to find a path during negotiations that allows both sides to feel a win. Win-win negotiations do not involve beating down the other side with threats or harsh criticism of the property. Your agent will likely present your case for a lower price or for seller concessions or for seller paid repairs in a logical way; hopefully armed with sufficient market data or cost estimates to justify the requests. Helping your agent by having a strong pre-approval will give him/her more to work with; so get that for them before they start.

You should expect that you agent will need to talk with you often during the process. You should not expect that your agent will go off on their own to negotiate everything and just bring back a done deal. Remember that this is your deal not theirs. You need to stay engaged in the process.  Agents act as facilitators and messengers and may strengthen your points a bit or provide proof of needed things, but at the end of the day it is always your decision. That is why you shouldn't play games with your own agent. They need to know exactly where you stand and how far you are willing to go on the issues. Don’t’ tell them to say no to something or to demand something and then get mad at them if the seller rejects that position. The agent doesn't want to hear from you later “Well I would have given in on that point; I was just testing to see what the seller would do.” That’s playing games.

So this isn't like a sports agent who might go off with just the instructions, “show me the money”;  there aregood article from MSN on price negotiation blunders – a good “don’t do this” guide.
lots of decisions that might need to be made in negotiating a home sale and only you can make the final decision. Things like possession after closing need an answer from you. Things like the appliances that the seller will leave need to be worked out and you need to decide what you can and cannot live with on that. There are potentially tests that you want done and the issue of who pays for them need to be negotiated. You agent will need to know where you stand on those issues. Finally there’s the price and that is usually the biggest sticking point. Your agent will know how to negotiate without ticking off the other side so much that they walk away; but, he/she needs to know where your bottom line is drawn. Here’s a

The negotiation process in real estate can be a somewhat drawn out affair, since there are four parties involved – the buyer, the buyer’s agent the seller’s agent and the seller and e very point must travel up and down that chain of people. That’s a big reason why clarity of intent is so important. It’s very easy for things to get muddled when things are repeated three times before they get to the other party. Many agents will use verbal negotiations, which does speed things up but also introduces an element of potential confusion over what was said by whom and to whom. Ask your agent to document every phone call with an email to both the other side and to you explaining what he/she believes was said during the verbal sessions. If you don’t have it documented it doesn't exist in a court of law.

Finally, when everything is agreed upon, there will likely be changes required to the original Purchase Offer documents – either cross outs with new words or maybe words added to Addendum's or completely new Addendum's. Make sure that you carefully read over everything again to see if it reflects what you think was just negotiated and make sure that the seller also initials and dates all of the changes and signs any new documents. Taking unsigned or documents that aren't initialed into court doesn't work either.

Negotiating with the seller doesn't have to be scary or acrimonious, but it does need to be serious; approach it as you would other serious things in life – do your homework, establish your own limits and must-have items, try to find a way to make it a win-win, stand your ground and be prepared with (and committed to) an alternate plan if the negotiations fail. Finally, let your agent do their job in the process.

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