Obviously we are in a buyer’s market and negotiations are completely skewed to the buyers.  BUT, playing too hard can backfire.  If you are just looking for a deal then you can just keep putting offers out until you get someone to bite. It works.

Consistently, the easiest transactions are the ones where both sides are trying to be fair, not just trying to get a every single penny that they can out of the seller.  If one side feels the other is being fair, they will often let things go and negotiate easier on repairs which is often the biggest sticking point in transactions.

I have seen many deals fall apart recently due to hardball negotiation by buyers, sellers, and agents.  What buyers need to remember is that this is a very personal transaction to many sellers.  They can be insulted and regardless of how bad the market they will hold it against you.  The original contract negotiation will set the mood for the rest of the process.  One client felt very fortunate to have another offer come in because the original negotiations were strained and they weren’t looking forward to an inspection addendum from the buyer.

Unfortunately the attitudes of the agents can come in to play.  Usually agents are a good buffer between the clients.  We often soften the original reactions and can help keep deals together.  I made a comment that was misinterpreted one time.  I had meant to say that even though it was explained later, it had ticked off the other agent and set the tone.  That deal didn’t come together.

My very basic rules of negotiations? If you are looking for a deal, negotiate hard and don’t get emotionally involved.  Otherwise, whether you are a seller or buyer, negotiate from base of fairness.  They may not agree on your fairness but if the deal doesn’t come together you know where your intentions were.

Other negotiations thoughts?

• I haven’t seen comparables sway anyone in their thinking. Inevitably each side is looking at their own comparables.
• Convince the other side that you cannot go beyond a price for whatever reason.  Either the payoff on your loan or bank approval for the new loan.
• So often people play a Split the Difference Game where whatever the counter offer is the lean to a counter in the middle.  Expect it.
• Give the other side ample time to consider the offer.  Pushing for a quick answer can often lead to a “no”.
• As the seller make sure to give the buyer a couple of days to answer your counter offer.  You might get a better offer in the meantime. It has worked for me.

Those are some basics, can’t give away too much here. Remember, every negotiation is different.  You need to decide if you go for Win-Win or Win-Lose.  Neither are wrong, just depends on you.

photo via http://flickr.com/photos/maveric2003

If you enjoyed this post, make sure you click here to get free updates in your feed reader or via email!

I recently read and commented on a question posted on Trulia.com which asked,

I am about to finish my MBA and will be moving to Portland to take up a job in the Hillsboro area. Do I rent?

Now it seems the consensus answer was to rent for a variety of reasons. I agreed with the consensus. My main reason for telling someone to rent when they first move here is that they don’t know the area. Adding to that, they have the highest inventory in years to pick from and falling prices which gives some a reason to hesitate. Why not?

Specifically one of the agents in our office moved here in 2003. His brother, an agent, steered him to homes in his Bethany neighborhood. Later the agent wished he had bought in a different neighborhood but picked that one on the insistence of his brother the agent, who has since moved. He realized he liked the other neighborhood in less than a year.

There were two kinds of agent responses that made me cringe. One was the blatant advertising and a disregard of the being asked since they didn’t bother to answer it. This borders on spam and continues the Huckster image some have of us. Social media is new and many are still figuring out the line between promoting and helping. “Give first and then you might get,” should be the understanding of Trulia.com and Zillow.com’s answer section.

The second type of response that made me cringe, seemingly with pom poms in their hands, some agents said, “Buy, buy, buy!” And gave all of the typical reasons such as interest rates and the idea that homes are relatively cheap, etc. I am not going to pick on any specific agent that answered but many of the answers sounded like canned scripts.

“It’s always smart to buy!”

“Renting is just throwing away money.”

Even though one agent said that “we would likely see continued depreciation through a good portion of 2009,” he also said the answer to rent vs buy was, “Wow, simple - buy.”

The people pushing the buy idea didn’t question his finances, the size of the company he was going to work for, if there was a guaranteed contract at his new job,

Those are some of the comments that can cause distrust by the public. If someone talks in absolutes, I am likely to tune out. So if there are many agents out there saying “buy, buy, buy” without caveats and acknowledging that our industry and market is in varying degrees of turmoil the public will tune us out.

hoto via http://flickr.com/photos/rberteig

If you enjoyed this post, make sure you click here to get free updates in your feed reader or via email!

It’s weird sometimes how rumors are quickly become reality.  Last week news broke that Mercury Companies was closing down all operations in every state they were in except Colorado.  Mercury Companies owned several Title and Escrow Companies here in the west and here locally they owned Security Title.  Today the rumor is (and I say rumor because nothing has been officially confirmed) that Western Title and Escrow will cease their Portland operations as well.

This raises several questions.

First, these are Title Insurance Companies, so what impact will this have on policy holders?

My answer…NONE!  Companies like these are underwritten by larger companies.  Take Security Title, they were owned by Mercury Companies and Mercury Companies are underwritten by First American.  First American is the largest title insurer in the world.  Furthermore, since these are insurance accounts they are protected.

Second, what happens to my money in escrow?

Again, escrow accounts (especially in Washington and Oregon) are regulated by state law and are continuously audited by the state.  If you had deposits in escrow they are still there.

Third, what happens to those employees?

That is still to be determined.  However, Fidelity Title and Stewart Title seem to be buying those books of business.  Here in Portland Stewart Title of Oregon has actually acquired Security Title along with approximately 25 employees.  Sources have told me that several of those employees will have to interview for their job.  However, several of their managers are assuming the same management positions at Stewart.

What can you do?

In many cases Real Estate Professionals build great, long lasting relationships with their Escrow Officer.  If your Escrow Officer’s company has been absorbed by another company and really like them stick with them.  They need you now more than ever.

If you are uncertain in regards to what’s happening with your title company then request a transfer of escrow form from the title company that you would like to close the transaction.

Most of all don’t panic!  Remember, Title Insurance Policies are underwritten by larger more secure companies and escrow accounts are protected accounts and in cases where fraud has taken place someone will go to jail.

If you enjoyed this post, make sure you click here to get free updates in your feed reader or via email!