As seasoned real estate brokers here at Douglas Elliman, we are often asked the question of what it’s like negotiating during the buying or selling process. People seem to want to be a fly on the wall to hear exactly how the magic happens, so we thought we’d pull together a sample scenario that does just that: realistically conveys the back and forth between seller, broker and buyer (because let’s recall: the broker isn’t just negotiating with buyers but is always also negotiating with the seller in terms of what the market can bear).
Therefore, we welcome to the first micro-episode of “Ebb and flow: negotiations in real estate.”
Broker: We have run the comps on your apartment, and after visiting the apartment various times and assessing its value, we believe that the apartment should be listed at $1.495M, considering that its value ranges from $1.3M-$1.6M.
Seller: I have lived in this building for over 22 years and I am not selling it for under $1.6M. Plus, it’s a renovated apartment.
Broker: We understand, however your renovation is over 5 years old now and no longer feels new to prospective buyers.
Seller: But everyone wants to be in this building; the parquet floors and the location are real attractions. This apartment has fantastic space! I am not selling it under $1.6M so let’s price it high so then we can absolutely get the $1.5M you’re talking about.
Broker: Mr. and Mrs. Seller, nothing has sold in the building for over $1.5M but we will price it where you want it. We do want to reiterate, that buyers today are knowledgeable and research savvy – brokers are even more so…If we go on the market at that price, we will get offers on where the property should actually be priced. Not to mention that when buyers are researching properties below $1.5M, your property will be missed despite it being overpriced.
Seller: Let’s try $1.6M
(Hits the market at $1.595M…)
Broker: Mr. and Mrs. Seller, our Open House was well attended with 30 people. We received four offers, one at $1.3M and three at $1.4M.
Seller: The number has to start with a 1.5 in front of it. We put $300,000 into the renovation. I have to have a number starting with 1.5.
Broker: Mr. and Mrs. Buyer, thank you for your offer at $1.4M but my client is countering at $1.5M.
Buyer: The trades don’t support that price. There is a unit in the same building, on the same line that is trading at $1.3-$1.4M. We can come up to $1.43M
Broker: I will revert back to my client with your counteroffer.
Seller: I know what my apartment is worth and we must have a 1.5 in front of it.
(A few weeks later)
Broker: Hi, Mr. and Mrs. Buyer – I have good news, my client has lowered the price to $1.45M. Are you still interested in the property?
Buyer: I’m sorry but we have moved on.
Broker: Mr. and Mrs. Seller, we need to move on from that offer, they have already placed an offer elsewhere.
Seller: Great, because I want an offer with a $1.5 in front of it anyhow.
TO BE CONTINUED…