Don’t Trust Your Money to Another Agent
All too often top professionals will craft a strong strategy for their buyer or seller to get them to move forward, only to find negotiations fall apart because of a weak agent representing the other side. Don’t let this happen to you. As a master strategist, you should develop the compelling arguments for both the buyer and the seller. Sharing this strong argument for the agent on the other side of the transaction will ensure a successful negotiation. By doing the other agents work and teaching them, you are protecting your commission or investment. You may feel like you should be entitled to commission on both sides of the transaction and you’re probably right but, always remember fifty-percent of a successful deal will pay you a lot more than a hundred-percent on a deal that falls apart. Take control, and get the job done!
Seller Argument #11: The Appraisal Quote
As we near or reach the bottom of prices in the real-estate market, many sellers will lean towards holding their prices. This could be a terrible strategy. Remind your seller that professional appraisals are likely to remain conservative for quite some time. After five years of price devaluation, most appraisers are factoring in the possibility of additional price drops. These conservative appraisals have created challenges for agents that have helped negotiate a price that’s fair for both buyer and seller. Even if a seller is confident that the market is turning around, appraisers won’t be willing to take the risk and will always factor in the possibility of an additional drop in prices. With underwater homeowners, a back log in foreclosures, and severe delinquency issues, appraisal values will be affected for a long time to come.
Additionally, the low appraisal issue should be taken into consideration during negotiation. Teach both buyers and sellers to anticipate and prepare for low appraisals before they happen. Develop a plan B before it’s needed. This could include disputing the appraisal, additional down payment dollars, and adjusting the price to reflect appraisal values.
Buyer Argument #11: Shortage of New Construction Close
Many buyers seem to be content just renting even though the market has improved. This strategy could lead to significant additional long term cost for the buyer and a missed opportunity. Because of the over abundance of homes available for sale, new construction has been at very low levels for the past several years while the population continues to grow at historic levels. At some point the supply won’t be enough to meet all of the increased demand. The impact will be substantially higher rental rates and prices. Worst of all as buyers realize it makes more sense to own, the cost of financing will also be much higher. The missed opportunity to buy the most affordable real estate of our life time may never come again.