So, I'm not really a person to hold back what I think most of the time. While I do have good judgement in most cases when to bite my tongue, when it comes to doing my job and educating buyers and sellers it's a different story. We are hired to do a job, and with that comes expectations (at least in my mind) that we educated and guide our buyers and sellers. I'm saying this due to a REAL WORLD example that we had happen recently to one our buyers - they chose to negotiate and it did not work out in their favor.
Here's the situation:
1. We had a buyer under contract on a home in Missoula County under $250,000 on about 1.5 acres. It was their neighbor's home and they wanted it for a rental. Great situation as it was slated to produce about a 7.6% return. As you can see, homes under $250,000 with a minimum of 1 acre in Missoula County are very TOUGH to come by - Under $250,000 with 1 Acre
2. We submitted a full price offer on the 1st day, and were able to get our offer accepted! Easiest part of our jobs at times:)
3. Our buyer is very familiar with the home, however, we elected to still have an inspection done on it. There were some items that came up on the inspection - as with any home.
4. At this point, our buyer wanted to negotiate on some inspection items and rightly so. There were some electrical issues that came up which were a pretty big deal. However, our buyers were TOO aggressive with how much they asked for on a price reduction. Let's just say the percentage of the price reduction asked for equated to 5.2% of the overall price - I told our buyers this was TOO AGGRESSIVE and you're going to make the sellers mad.
5. Meanwhile, this home was categorized in the MLS as "under contract accepting back up offers". Meaning other agents and buyers could still submit offers. Well it happened during our inspection contingency that they received another offer.
6. We had a deadline of 5PM on a Wednesday to come to agreement on terms. While we asked for 5.2%, the sellers had verbally countered they would do a price reduction equating to 1.7% of the overall price. Long story short, our buyer wanted more than that - closer to 2.5%.
7. Our 5PM deadline came, and I did not hear anything from the other agent. Guess what happened? They received another offer and accepted it. Because we did not come to terms by 5PM, they had every right to do so as our transaction was terminated. Consequently, our buyers lost out on a great opportunity for an investment property.
I share this story because we see and encounter examples day in and out in our business. Going back to the art of negotiation, this is without a doubt an example of negotiation gone wrong. I literally spoke until I was blue in the face about "playing nice" and "this is too aggressive - you're going to make them mad". Our client did not listen to me, and as a result the deal fell apart.