Common seller mistakes numbers 1 through 5.
You can predict that a certain percentage of home sellers will make a mistake or two in the heat of negotiation. The article for sale is, after all, their hearth and home and largest single asset. And not everyone is a born negotiator. In fact, very few are, which is supposedly why they hire people who are. In the last month I've run across three seller missteps that were unusually egregious, yet common enough to be instructive.
Mistake 1: Seller overprices home, against the advice of his agents, a highly professional team who know their market. Days, then months, pass, as they do when you miss the price, and the house doesn't sell. Then one day Seller gets an offer—9.26 percent below list price. Seller is insulted by this low-ball offer, as sellers usually are, and refuses to respond with a counter, even though it's a real estate truism that your first offer (or more accurately, your first buyer) is likely your best. Now, I suspect that everyone involved in this offer knows that 9.26 percent below list isn't the home's market value. Buyer has simply fired a shot across Seller's bow encouraging Seller to heave to and negotiate. 9.26 percent below list probably isn't Buyer's final word on the subject. I'm pretty sure it's not, and Seller's agents were probably pretty sure too, but Seller, whose job I'm told is to negotiate the purchase of companies, either doesn't know this, has forgotten it or ignores it. Seller maintains a disapproving silence. Buyer sees that Seller is acting uppity with very little on the ball, and skulks away.
More days trudge past, and now my client steps forward to make an offer slightly better than the first. However, "slightly better" don't cut it with Seller, who—you guessed it—refuses to respond. Slightly better isn't all my buyer is willing to pay, and while like the first buyer he finds Seller irksome, he's willing to improve his offer.
At this point a real estate miracle—at least if you're Seller—occurs, because after sixty-plus days on the market and only two low-ball offers to show for it, out of a clear blue sky Seller finds himself the recipient of three offers, including my buyer's improved offer. This never happens after two months on the market. Ever. Naturally Seller doesn't realize how lucky he is. Instead, he thinks the market finally realizes he's got some hot property here. Seller counters all three offers vigorously. Seller is feeling his oats and then some. In fact, I surprise his agents by guessing correctly that Seller had to be talked out of countering all three offers above list price, even after it's plain to almost everyone that his home isn't worth list.
Here's an interesting fact for those of you out there posting that buyers are easily-manipulated sheep just begging for a shearing: Seller's high-handed tactics backfire. One buyer drops out. The second buyer improves his or her offer "some", not much. My buyer instructs me to tell Seller to stick his counter where the sun don't shine. I suggest he rethink this and explain how he can counter Seller's counter (and send Seller a stern warning) in a way that doesn't cost him one red cent. Upon mature reflection, he agrees.
Neither of the two surviving offers come close to meeting Seller's expectations, so he pulls his home off the market the next day. I've put a fair amount of work into this but take the outcome surprisingly well. Seller's agents, who've been working with him for about six months, look like you'd look if you'd just had the rug pulled out from under you.
So I'm thinking this fiasco is just another example of seller ego run amok, but the next day I'm on broker's tour and happen to see his agents and they tell me the real story. I'd known that Seller was selling because he's taken a new job in another city many miles away. He's stuck down there most of the time, while Mrs. Seller is stuck up here all the time, so you'd think this is one married couple motivated to sell. You'd think that. Miss you, dear. But it turns out that no one, not even Seller, knew how much Mrs. Seller likes her job here, likes it so much, in fact, that she's willing to play a waiting game that not coincidentally will keep her here a good long time. So take that, Mr. Seller, and maybe next time you'll make sure everyone's on board.
So what mistakes has Seller made? What mistakes hasn't Seller made?
1. Overpricing his house, a home-selling strategy that guarantees Seller eventually will be the target of low-ball offers.
2. Not countering the first offer. You never know what good things might happen and besides, man, this is no time to be thin-skinned.
3. Not countering the second offer.
4. Countering those heaven-sent multiple offers as if he were negotiating from a position of strength, and not the luckiest seller on the face of the earth. Kicking his luck in the teeth, in other words. Yes, buyers respect strength, but arrogance not so much.
5. Not making sure that everyone on title is on the same page.
Write when you find work, dear. But I have found work, dear. Well, write anyway.
In two weeks, or whenever, uncommon common seller mistakes 6 through 10.