[Music]
Hello everyone and Welcome to another
episode of Selling Greenville your
favorite real estate podcast here in the
upstate of South Carolina I am your host
as always Stan McCune realtor here in
Greenville and all of my contact
information as always is in the show
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today we are going to be pulling back
the curtain a little bit on a very
very specific aspect of
negotiation this is not something that
you hear people talk about very often
which is why I think it it could
potentially be an interesting topic here
but it's an aspect of negotiation where
you have to decide whether to let a deal
go by the wayside or whether you want to
actually try to hold the deal together
and here's the thing that a lot of
people don't fully understand
particularly when selling a house
it's not always the best move to keep a
deal together if a deal is falling apart
Sometimes the best move is to let it go
you know as that song from the Frozen
movie that we've all heard a gazillion
times Let It
Go Blah Blah Blah I'm not going to sing
for you guys sometimes it's best to just
let it go and you know let that
transaction fall through put the house
back on the market etc etc there are
times when that's the case but there are
times when you need to push back and
actually try to hold the deal together
the question is when do you apply the
different tactics and I have some some
thoughts here on that and and the ways
to handle that that I want to talk about
today let me start by just kind of
setting the stage here selling a house
can be and pretty much always is
extremely stressful I mean for me as a
realtor I do this as a career and
stressful for me for people that only
do it a handful of times in their in
their lives it can be particularly
stressful now in some cases the people
that you know only do it a few times
in their lives is not stressful because
they have no idea what all is happening
behind the scenes but for a lot of
people it's an extremely stressful and
extremely emotional time and
and it's it's stressful and it's
emotional for buyers as well and so
sellers ultimately they just want to
get their house under contract and
buyers they just want to find a house
but sometimes there are irrational
decisions and irrational thought
processes that happen when all of that
stress and all of those emotions kind of
come to a head and for sellers just
getting a house under contract is I
don't want to say it's meaningless but
that you're you're far from done I mean
once you get the house under contract
you're not even done negotiating there's
still points of negotiation in a
transaction that happened and and so
the the the seller you know sometimes
we run into situations where you know a
house has been on the market for a
little while and then an offer
comes and the offer might have some some
very major red flags but the Sal just
wants to get the house under
contract and then what often ends up
happening is those red flags manifest
themselves and they can cause the deal
to fall apart and oftentimes my gut I've
seen this over and over again my gut has
you know told me this is going to fall
apart this is going to fall apart my
seller client still wants to go to move
forward with it we do and then it ends
up falling apart pretty much all the
time my my gut is pretty is pretty
accurate when it comes to this kind of
stuff and that's just there's a lot
of things that have to happen for a
transaction to get to
closing now this can be really hard to
quantify and sometimes it can it can be
difficult
almost impossible at arms length for
us to to figure it out but one of the
most important metrics that I want to
try to figure out if I'm a listing agent
if I'm if I'm helping a client sell a
house one of the most important metrics
that I'm looking for in determining
whether a deal or a potential deal
potential transaction will get to
closing is how much the buyer actually
wants the house and this is an extremely
important point that many people don't
consider as much as they should a lot of
people don't realize that a huge portion
of the contracts that fall through do so
not directly because of an unmet
contingency but because the buyer
simply didn't want the home that badly
the buyer decided you know got buyers
remorse decided that they didn't like
this or didn't like that decided that
they weren't ready to move all sorts of
different things come into play and come
into play there and this causes a lot
of contracts to fall through and and
it's definitely even for a lot of the
ones where it's not the primary reason
the contract falls through it's
definitely often a secondary or a
tertiary reason it's a big part of it a
big reason why when people are
selling a house and and they get it
under contract and then it falls through
I'm telling you a large portion a large
I would I would say a majority of the
time is because the buyer simply has
decided that they don't want that house
anymore and
at that point then the buyer is going to
to try to get out of the contract and
the buyer is probably going to be
successful in getting out of the
contract and getting their earnest money
back because the odds are stacked in the
buyer's favor here in the lovely state
of South Carolina that's just the way it
works down here
unfortunately
and what I've learned is that there is a
time to allow the buyer out as we've
already said and there's a time to try
to hold the deal together but ultimately
it all starts with trying to get the
serious buyer at the very beginning
trying to get the house or the property
whatever under contract with a buyer
from the get-go that we feel confident
actually wants the house and so these
tea leaves can be difficult to to read
but there are little tea leaves that
are left I don't know I don't know if
I'm mixing metaphors I don't I don't
even know what reading tea leaves
actually where that even comes from
but let's just pretend like there are
tea leaves that are are left by buyers
and it's my job to read them that's what
I attempt to do and and a a lot of
information is revealed during
initial negotiations even if it's if I'm
not talking to the buyer directly if I'm
just talking to the buyer's agent
there's a lot of little ways that you
can read between the lines and
you know one of the things that we see a
lot in this market is buyers trying to
differentiate themselves with these love
letters that Express how much they love
the house but you know what and and
sometimes those do work let's just be
honest sometimes they work sometimes
they
backfire I've I've seen both and
we've talked about that in the past on
on this
show what is interesting though is when
the Love Letter doesn't match the offer
right it's like you someone they they
give you a letter that says oh we love
this house it's our dream home we can
see ourselves raising our raising two
boys and a dog here and then they
bring you an offer that is just terrible
and every way I have had that happen by
the way I'm not just speaking in
hypotheticals I have had those
situations happen where a love letter
was presented this was a few years
ago I I can't say it's the time not
definitely not since the pandemic this
was a few years ago someone made a
lowball offer on a house and with that
lowball offer gave a love letter it's
just like no you you are not a serious
buyer for this house you you have to
consistent consistently present your
message your offer says you don't love
the house I don't care what your letter
says right and so at the end of
the day there are things that you can
read in in the offer how strongly of an
offer is it is it strong in the price is
it strong on the on the the various
contingencies what they wave what they
don't wave my conversation with the
agent you know talking getting a read on
the situation from them you know when
I'm representing a buyer I will
communicate to the listing agent they
really love this house this is going to
be you know and I will sell my clients
on you know hey they're going to be
really easy to work with I've worked
with them in the past or I've known them
for a really long time blah blah blah
blah blah all these different things
in order
to to not just sell the
offer CU obviously my job if I'm
representing a buyer is to sell the
offer but now it's important to also
sell the buyer because a lot of Agents
they don't realize that they're even
thinking in this way but instinctually
they know that the that they want that
serious buyer the buyer that that is in
love with the house the buyer that
really wants the house and that will
actually get to closing that is
something instinctually that's happening
in the background of any good agents
mine and so those all come into play
well when I'm on the seller side when
I'm representing the when I'm the
listing agent representing the
seller I'm trying to reverse engineer
that information as well and I'm not
going to give away all my secrets here
but you guys have an idea there are
things that I can identify in the offer
in my conversation with the agent Etc
that help me to determine okay I feel
like this is is a serious buyer
however you know we're having a lot of
multiple offer situations just a lot
of different little twists and turns we
right at the the beginning of of you
know when a home goes on the market
frequently and so sometimes we will
have
situations where a buyer will come with
a strong offer right after a house is
listed but the seller wants to counter
certain points of the offer or perhaps
the seller has other offers and tells
the potential buyer that they're not
going to accept an offer until a certain
deadline what we're seeing in in this
market really sellers and buyers are
amped up right now and a lot of buyers
in those situations will just back out
they'll just say I don't want to mess
with this maybe they're exhausted they'
they've already messed with this
multiple times and lost out they'll just
say I don't want to to mess with this
I'm I'm not going to get into a back and
forth this is my offer take it or leave
it if you're leaving it if you're going
to get into a multiple offer situation
I'm walking
and I always warn my clients if if if
I'm representing a seller client I
always warn them if if we do this if we
get an offer and then tell the buyer hey
we're waiting you know we're not
going to accept this right away we we
want you to you know to submit this
offer as part of a multiple offer
highest and best and we'll answer we'll
respond to it in a couple of days I
warned my clients that there is also
there's always a risk that that offer
Mak go away that buyer may walk multiple
buyers may walk and that has happened
multiple times and that's why I
always make that warning but you know
what when that happens do you think that
I as the listing agent am stressing out
like oh my gosh I just caused my seller
client to lose out on offers that he or
she had do you think I feel that way let
me tell you the answer is no absolutely
no and I'm going to tell you why I am
actually relieved because think about it
this way I already I already said before
in a real estate transaction there are
multiple points of negotiation you've
got to negotiate right at the beginning
on the price and the terms and all of
that you've got to negotiate on the
repairs if an appraisal comes in low
you've got to negotiate on that then
there are all sorts of other little
details maybe there's furniture that you
want to buy or this or that maybe
there was something that they said was
going to convey in the listing but now
the the seller is saying oh I don't
want that to convey or maybe the buyer
was under the impression that something
conveyed in the listing when it wasn't
listed that way and the buyer's
confused and feels like he or she has a
right to you know that freezer in the
garage for instance when it was never
listed that that freezer would convey
different things like that these are all
points of
negotiation right and so if the person
is incapable of handling a negotiation
on the front end what do you think is
going to happen during the transition
during the transaction rather when there
are more points of negotiation that take
place are they just going to have a
meltdown every single time my seller
client doesn't just agree with the buyer
on every single thing that the buyer
wants that is a really really bad sign
if the buyer says right at the beginning
I don't want to negotiate here's my
offer take it or leave it listen
there are some times where that could
make sense but most of the time that's a
really bad sign and that's a buyer that
I personally would rather not deal with
now sometimes we're in a in a desperate
situation where we don't have any better
options and maybe that's what we just
have to accept but particularly in this
one
situation where we're where we're
talking about especially if the listing
has not been on the market for very long
and you know we're just countering minor
points or trying to do multiple offers
highest and best all that type of stuff
you get the the buyer that that just
won't do any sort of back and forth you
should if they back out you should be
relieved okay great now we know we just
got the one piece of information that's
really that some of the hardest
information to get and that's that that
buyer wasn't very serious they were not
in love with this house that's crucial
that's extremely
crucial so all that to say and and oh
and I should mention this right let's
say that that we salvaged that deal
right I'm saying that we should let
those buyers walk right away in that
situation but let's say that we don't
let's say that we Salvage it and and end
up going under
contract and then the contract ends up
falling through and it very very likely
will you've now lost a lot of time you
may have lost money you may have done
repairs that now you know a Ticky Tac
inspector pointed out well guess what
when the house you know has a new buyer
that brings in a new inspector that new
inspector is going to be forced to find
new things wrong with the house like it
or not the new inspector he's getting
paid to find things wrong with the house
he is going to find things wrong with
the house I promise you that and so
you're going to have to do more repairs
again maybe some repairs that that
inspector would not have noticed from
the last inspection a whole lot of
different things so it cost you time it
cost you money and it may cost you on
the marketability of the house it
depends on the house it depends on on
the conditions of the market but
needless to say it's not usually a good
idea it's not usually a good thing
for the marketability of the house if it
goes under contract and then comes back
on the market oftentimes that's a that's
a really bad thing for the house in
terms of its
marketability if it get if it goes under
contract multiple times and falls
through that's a really really bad thing
you don't want that to
happen and as I said before
ultimately if a buyer wants out of a
contract he or she is going to get out
of it that is just the way it works and
they're probably going to get their
earnest money back what are you going to
hold up you know if you're a seller
you're going to hold up your listing
over giving the the buyer his or her
$3,000 back probably not you've got a
whole lot more money waiting to come to
you when you sell your home then that
three you know two three
$4,000 so for most sellers it just makes
sense just to cut ties with that buyer
that's looking to back out that that it
what are you going to do what are you
going to do if they don't want the home
and you've you've got multiple points of
of data indicating that that's the
situation that you find yourself in is
that it may just be better to cut ties
Al
together however there are times when
the buyer actually does want the
home but gets scared or turned off about
something and in these
cases the buyer isn't just trying to
back out because they no longer want the
home the buyer is has
concerns and isn't sure that he or she
wants to go through with the
transaction even though he or she still
likes the house but has these concerns
and in these
cases this is when I'm trying to hold
the deal together this is when I want to
try to keep the deal together because
there is actually a chance there's a
chance that we can salvage the deal when
the buyer still wants the house now let
me say this the strategy that I
employ or deploy or whatever the
whatever the right word is the strategy
I
use in in terms of how I approach this
situation where the buyer is concerned
is is starting to have some buyers
remorse creep in I have a different
tactic a different approach that I use
when I'm repr representing the buyer
versus when I'm representing the seller
and again understand that these are
situations where I feel like the deal
should be held together so there are
some situations where I'm
representing a buyer and you know they
get back an inspection report and it's
shows you know termite damage throughout
the house and all sorts of major issues
and the buyer wants to back out and the
buyer absolutely should back out right
there are those
situations but there are other
situations where this house might be a
unique house or this property might be
unique and I don't see another house
like this coming back coming on the
market anytime soon and the buyer having
buyers remorse for irrational reasons in
my opinion and I want to gently nudge
them in the direction of rationale of
logic versus irrational and
illogic
but I have to do that gently right
because at the end of the day I want all
of my buyer clients to sleep well at
night I I want them all to be thrilled
with the house that they purchased and
the home that they're going to live in
or the investment property that they're
that they're purchasing I want them to
be so excited and so thrilled about it
and it it really bothers me if they're
just torn up about it losing sleep at
night having issues working through
it and and working through their buyer
remorse
so the way I have to handle that is
basically just to ultimately present the
information and just try to match the
illogic with logic and then if the buyer
at the end of the day still cannot sleep
at night listen that is the test right
if you can't sleep at night purchasing
this property then you probably
shouldn't purchase it on the flip side
if you wouldn't sleep at night losing
the property then you need to go hard
and heavy in terms of your purchase and
and go all in right in order to to try
to get that house that sleep at night
test is a really good
test and so I'm I'm taking all this
information into account I'm taking the
full
situation into account in terms of
what's my history with this client what
are they looking for have they been
reasonable have we really narrowed this
down do we do we know for a fact that
that they know what they're looking
for and there are some you know in
most cases with with my buyer clients I
get a profile on them pretty quickly
like you know we might need to look at
several properties but once we start to
look at a few properties I get the sense
okay this is what they want and this is
what they don't want now there are some
there have been some instances of
clients that are kind of all over the
map and it's hard for me to to fully
represent them and to to do it the best
way possible because
they're just they're not even totally
sure what they're looking for but
most of the time I'm able to get to the
bottom of what my client's profile is
and what they're actually looking for to
purchase and so if we've been looking
for a while and I feel like I've found
the house for them or perhaps they found
the house you know searching online
or whatever and it's perfect for them
I'm going
to let them know that and the issue may
be that they're just not ready to buy
maybe maybe they're just not prepared to
actually make the hard decision to make
the move and it's we're never going to
find something that's suitable for them
because they're never going to they're
always going to have buyer remorse
because it's not buyer remorse about the
property it's buyer remorse about
moving maybe it's an investor that is
trying to purchase an investment
property that checks off you know we
find an investment property checks off
off all of their boxes but maybe it's
you know unconventional in some way who
knows maybe it needs $5,000 more repairs
than we originally thought but that is
still well within the bounds of of their
criteria there's never going to be a
perfect investment property all of the
investment properties that are good
deals have something wrong with
them and if you back out or want to back
out from a investment property purchase
that I think checks off all your boxes
and all of your
criteria maybe you're just not ready to
invest maybe you think you're an
investor but maybe you're just a tire
kicker and those are those are some
very basic examples but in essence if I
think a buyer is making an irrational
decision by having buyer remorse or by
not pulling the trigger on a property
that I think is is exactly what they're
looking for then at the end of the day I
present my data on why I think they're
making an irrational decision and we can
discuss it but they have to make the
decision like I'm not going to force
them to make a purchase that they're not
comfortable with however I may very well
fire them after this process if they
decide that they're not going to to go
through with the
purchase and I had a strong conviction
that this property was one that they
should have purchased there is a very
good chance I'm going to fire them and
I've had to do that multiple times
particularly true with investor clients
that that say that they're looking
for this XYZ property and then I find
them XYZ property and they say no it
just needs a little bit more work than I
was thinking and it's like yeah that's
what XYZ property is it always needs a
little bit of work and so if we just
disagree on the decision-making process
and and all of that
that I I just have to come to grips with
and my clients have to come to grips
with the fact that I just can't do my
job representing them if they don't know
what they want or if they're not ready
to make a move to to pull the trigger on
on something and as I said before I'm
pretty good at developing a profile for
my buyer clients and at the end of the
day if I get them under contract with a
property that I think is perfect for
them and then they back out for reasons
that I don't think are
rational I I just don't see how I can
help them at that point I've done
everything I can do to help them
honestly the way the real estate law is
is written I could go
after them for needing to pay me a
commission in that situation absolutely
it it it's written in the buyer agency
agreement read it for
yourself the way it's written I can go
after them for my commission now have I
ever done that no I've I've never done
that could I potentially do that there
are some situations where I might
consider it
but at the end of the
day that's how I have to approach it the
strongest the I will approach it with my
buyer clients is to present the
information tell them that I think that
this is I don't think that you're going
to find a better property than this or
if you're or we might be waiting months
before you find a Better Property than
this and then if they disagree with me
then we may just have to decide to part
ways at that point now how does my
strategy change to keep a deal together
if I'm representing the seller and this
is more important obviously
so if I'm representing the seller but
getting the feeling that the buyer from
the buyer's agent that the buyer wants
to back
out it's it's obviously a different
strategy why because I'm representing
the seller like it's in the seller's
best interest to sell the house right if
it's if I'm representing the buyer and
the buyer has buyer remorse it may not
be in the buyer's best interest to
purchase the house with the seller it's
a
completely it's a completely
different scenario and the simplest
explanation for how I handle it
differently is that I'm just more
forceful and I take the bu by the
horns more because I am trying to do
what's best for my seller client whereas
with my buyer client I'm trying to guide
them I'm trying to to guide them but
they have to walk down the path whereas
if I'm talking to a buyer
agent that's representing a buyer that
has buyer remorse I'm I'm now trying to
grab their hand and take them onto the
path with me in order to to save the
deal for the purposes of my seller
and I just had this very scenario happen
recently I had actually first time
in my career that that this has ever
happened I've after an inspection
report that was an inspection was done
on a listing that I had this is I say
it just happened this was a little while
ago but we had the inspection the
buyer had the inspection done I was
representing the seller as the listing
agent inspection comes in and it's just
it's a long list of things and I knew it
was going to be a long list of things
this is an older house there was just
there were things that I could see that
needed to be done but I had communicated
to to the buyer agent hey just so you
know I'm expecting this inspection
report to come back with a long list of
things and just so you know my client
has expressed to me and wants me to
express to you that he or she is willing
to
do whatever items come back on the
report that are needed to be done within
reason within
reason now the backstory on this is the
buyer had really expressed that they
really wanted the house they put down a
lot of earnest money they made a very
aggressive offer on multiple levels
it it was the kind of thing where we
were never going to I I can assure you
we were not going to get a better offer
than this if this house came on the
market so came went back on the market
so I'm feeling a sense of of urgency
from the very get-go with this
transaction that's like okay we need to
get this to closing for the for the sake
of my seller and and by the way a
common misconception people have people
think that that Realtors play games to
try to get prices up $5,000 here $10,000
there you don't realize how little that
impacts our transaction if we're doing
that if we're trying to drive a price up
for the sake of our clients it is for
the sake of our clients it's not for us
we don't benefit hardly at all
monetarily by driving the price up that
that's lost you know obviously if you
drive the price up $50,000 or $100,000
even that's one thing but driving the
price up5 10 $15,000 that's NE a
negligible amount in terms of our
commission and I I've heard some
people be you know just not understand
that aspect of of the negotiation
process for the most part it's not for
us for the most part if we're going hard
in a negotiation it is strictly we're
putting our neck on the line for our
clients trying to get them as much money
as possible and and trying to help
them the best way possible just putting
that out there in case you were
wondering
so what was unique what I said was
this is the
well this entire scenario is the first
time that this has happened but this one
part obviously is not the first time
this had happened to
me when they got the inspection report
rather than asking for repairs to be
done they just sent a release of
contract they just said we're we want
out this inspection report was awful we
want
out and that was discouraging but I
was encouraged by the offer that they
originally made that I felt like they
wanted the house there were some other
tea leaves that I had read there that
made me think these people wanted the
house and so and and again it was
like it was it was an incredible offer
that I felt like we really needed to get
to closing and so I talked to my client
and he was just like yeah we need
to we need to to do whatever it takes
to to salvage the deal I'm I'm willing
to to get it done
and additionally we had a little bit of
negotiating power in that the way our
contract was structured the seller
couldn't sorry the buyer couldn't just
back out on the basis of the inspection
they needed to ask the seller to to do
repairs and if they didn't because
they had put forth so much earnest money
they they put forth about 3% earnest
money which 1% is the standard in this
market 1% of the purchase price they had
put forth 3% which is a pretty hefty
amount they were there's a pretty
good chance that they would actually
lose that earnest money and at the
very least it would be held up and and
my client expressed that they were
willing to fight for that earnest money
so we did have a little bit of
negotiating power but what was unique I
said it was the first time that I had
had ever s successfully done this before
was I actually saved that
deal even though we got a release of
contract I was a I called the agent up
and I was just like Hey listen well
actually she didn't want to talk to me
I reached out to her multiple times
and was just like hey let's have a an
agent to agent conversation about this I
think we can salvage this deal she tried
to avoid me for like I don't know 36
hours finally
she was willing to to talk to me on the
phone I was like Hey
listen I have a great contractor a great
team people that we can knock this out
I've seen I looked I've read through the
entire inspection report I was like
these are fixable things we're not
seeing a roof caving in we're not seeing
termite damage in the walls the walls
are about to collapse we're not seeing
you know major Foundation issues we're
not you know we're not seeing
mold in throughout the house that's just
spreading and going to kill everyone
that breathes it in like these are
correctable things I have been in this
situation I have dealt with worse
inspection reports than this and I've
gotten the deal closed let's do this
let's knock it out let's let's work it
out with your clients my client is
willing to to get it all done we'll do
it above board and your client
they're you know I I already knew some
backstory that they had tried to get a
few other houses and were just having a
hard time because they had a home sale
contingency and all sorts of things and
I I reminded the agent that she was
going to have a hard time finding them
something else as well at that price
point that they would be able to
accept and she was like okay I will
present this to my
clients and she did and they were
willing to actually move forward and
make repair requests now they made they
they they took advantage of the
situation let's just I'll be completely
honest they did take advantage of the
situation
but I had again I just had an Open Door
of communication with with the seller
and the seller was like he was kind of
playing with house money a little bit
because because he already was
getting more than what the house was
listed for and what not and honestly
more than what the house is worth and
and so we were in a situation where it's
like let's let's keep the buyer as happy
as possible get this thing to
closing and we did we got through it it
was a I I earned my commission on that
house I earned my commission cuz I
actually my client actually really
leaned on me to to kind of
spearhead the repairs and get all of
that done and there were a lot of twists
and turns along the way which I'm not
going to reveal too much information
here because this that that could be
problematic on multiple multiple levels
but there are a lot of twists and
turns along the way but we got it done
we were able to save the deal and it was
all because I perceived and I'm not
trying to Pat myself in the back but the
key point of it was I perceived that the
buyer actually wanted the house and
because the buyer wanted the house we
were able to work out all those messy
details on the back end and so at the
end of the day assessing the buyer
mindset is a hugely underrated part of
the negotiation process that is a major
major part of the negotiation process
and that's something that I'm constantly
doing as I'm talking to Buyer Agents as
I'm going through the process of a
transaction with a buyer agent I'm
constantly
gathering information on on the buyer
mindset and where they are what they're
thinking and then that information is
what we use to
determine when the poop hits the
fan how we're going to move forward with
this should we just part ways with these
guys we would not want to deal with them
anymore they just going to be a big
headache or should we try to Savage the
deal get it done get to closing and call
it a
day that is it for today's episode
appreciate you guys listening again
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stay warm out there in the cold we'll
talk to you guys next week
[Music]