Thursday, April 8, 2010

Not Judging the Actions of the other party

When a deal is struck between a buyer and a seller, it often takes some concessions by each party. In a more level environment which we experience in New York City, the seller and buyer each have a certain amount of leverage. Buyers, for example, who have all cash, can try to get a favorable outcome. Sellers who have more desirable properties, whether the location, the quality of the building or its amenities if it is a coop or condo, or have access to private outdoor space for example can also have more leverage.

I try to advise my sellers in particular not to spend a lot of time figuring out the motives of buyers. It is not a good use of time. I don't want to give buyers or sellers unreal expectations either. If I represent a seller and a low bid is placed, it means the buyer has to "travel further" to meet the seller's needs. Often a deal is not made, but sometimes it is. Buyers can be testing the seller to see how flexible he or she is, but are willing to go considerably higher on a offer. As for buyers, I try to suggest bidding at a place that shows you are serious, but will still get you the best price.

In the fall, a buyer asked me to represent him and negotiate for him. I got a price lower than he was willing to pay and I suspect he was very pleased. Years of experience helps in this regard.

A deal is about bring parties together. If you have a qualified buyer involved with the transaction, spending a lot of time figuring out motivations is probably not a great use of time. We're all human and we all do it. Better time is spent engaging the parties to find a common ground and effect a sale.

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