How to counter a bid 8.5% below ask?

My advice would be not to post your negotiation strategy on a public real estate forum. What if the buyer is a streeteasy reader?

Please see: "What Should She Counter-offer?" - or just split it down the middle and save us from another 100+ posts

Wow- thanks for the very unhelpful posts. I'll try to get this deleted.

Juice is right. So many people look at streeteasy now that you don't know if this buyer or any future buyer will be reading this post and and know what price point you want.

It's not that people are unhelpful, we had someone start a chain that had these similar questions.

The problem besides that everyone reads here is that it is more a personal decision. If you want 20 people to tell you 20 different things then ask.

In this market people are always going to look to get a deal and feel out the sellers. If you have a drop dead price you want and do not want the back and forth, just tell them the number as a take it or leave it.

but if you start coming down 2% know that they will counter again and you will end up somewhere in the middle around 4%, assuming they are serious.

And i would not take the this is all i could afford to lose attitude, because if the market turns again you will be getting much less.

Exactly, what you paid, spent, etc. is important to you but not to the buyer. The buyer, of course, wants to pay the absolute lowest price they can. Do read the thread titled "What should she counter?" or something like that & it is at the top of the list right now. Some realtors responded so you can see their thoughts. Good luck & sell that sucker!

There are two approaches to negotiation, as I see it (and I'm about to talk out of my rear end, so forgive me).

One is splitting the difference -- i.e. you have a number, they have a number, and your goal is basically to get to the number betwen the two. Because people incorrectly take this to be a "fair" result, this is what tends to happen in negotiations -- even though it just means that the outcome is determined by the starting positions.

The other approach is the "Getting to Yes" approach, which basically tries to find a price that is truly reasonable and correct by talking about the justification for each side's position and trying to find ways to meet each side's needs. The trouble there is that you can get stuck in a spot where your initial offer is firm yet justifiable, but the other side can't take it because...come on, you're not even willing to split the difference? If one side has moved and the other hasn't, you'll often see a deal fall apart just because that's not "fair."

So I think the best approach -- particularly where, as here, you're selling a co-op to a buyer that you've spoken with personally -- may be a hybrid. You come back not with just a number, but with a discussion and a baseline that's just slightly above your true baseline -- something like "here's why 3% is my firm baseline, let's talk." Then, when you've talked, maybe you stick with your 3% baseline -- but most likely you go down to your true baseline of 4% as a "compromise" to get the deal done.

An added advantage of that is that it allows you to play the card about losing money. drdrd is dead-on when he says that rational buyers don't care how much you paid...but not all buyers are rational. Present the huge loss as an obstacle -- a problem to be solved in the negotiation, and an example of something you are giving up to get the deal done -- and you may find that it helps you get a better number. (It shouldn't...but it may.)

Like I said, talking out of my rear -- but I hope that's somewhat helpful.

The best counter offers present a well thought out "defense" of the number they are countering with. Take a look at the building comps, and also consider comparable properties if the building comps are not recent. StreetEasy is useful for that. Try to be objective about your renovations, overall conditions, view, etc. as it relates to these comps. Also, think really hard about your bottom line. I have seen too many sellers reject an early offer because it was too low, and then after several more months without an offer, reduce the price below the original "too low" offer. The pent up demand for your apartment vanishes after the first month or so on the market - so expect a much slower process in the coming months. Good luck!

"what you paid, spent, etc. is important to you but not to the buyer."

Talk for yourself! When i see a property i like I always try to find out how much it previously sold for.
If i see it asks a 40%+ premium and it last traded within 6 or 7 years, fvck it! I put the seller in the pot with the other delusionals!

-Well qualified buyer in a co-op
-They came in at 8.5% below your ask
-Your bottom line is 4% below ask

4% sounds about the middle to me. Do not lose your good buyer over .25% or a lengthy negotiation process.

Plus, you are not using a broker (which you have not placed a $ value on, while you are trying to justify 20K for reno work)

My inclination based on what you've written would be to counteroffer at ~$10k off and, as douglasternyc writes above, cite some good recent comps in support of that price. (Make sure the comps are actually closing prices, not asking prices.) Ask the bidders if they know of comps they believe support a lower price. This shows willingness to engage while making clear that the negotiation is not necessarily a "meet in the middle" exercise. (Also . . . you may end up realizing they have a point, which could save you time and money in the end.)

Also, you should hold another open house this weekend, even if you think you're close with these people; you'll feel more comfortable afterwards that you've cast your net wide and that there aren't likely to be higher bids coming out of the woodwork.

First offer is your best offer.... says Ali

Firsttimeseller, this is just one person's experience that I came across the other day:

http://www.villageconfidential.com/guest-post-dont-mess-up-in-here-by-noah-rosenblatt-of-urbandigs-com/

FTS, I'm on your side. $735K is a reasonable rebid.

Just as importantly, if you think these people are your buyers, start making friends with them.

ali r.
DG Neary Realty

I'll say it: This is why people hire real estate agents. We know how to do this.
But since we're here: as it stands, no one on this site has enough information to make an informed suggestion. Nor should you include any more info (the posters above are right - if I was your bidder I would know everything I need to know based on the percentages and numbers you cite above).
That post from Noah is a great place to start so you can steel yourself for what is coming. Based on what you have shared, I would say yes, these are your buyers. If you don't reach an accepted offer, it will likely be weeks if not months before you receive another bid. No, you don't need to take their offer at 8.5% off. Yes, you will likely end up somewhere in the middle - at your 4% bottom line. Ideally you can do better than that.
No one likes to lose money, but losing it now beats losing it six months from now. Clearly you are being forced to move, otherwise you wouldn't be selling. Do your best to make it work with these people.
Tina Fallon
Realty Collective, LLC

Tina your comments run counter to what I believe i normally read. I believe most of the traffic comes in the first few open houses. They held one open house last weekend so far, meaning that they should be good for one or two more prior to running out of the surge of buyers coming into a new apartment on the market.

While I think most of us here would agree that if she gets to the neighborhood of 4% of the selling price then that is wonderful, to say that these will be the only buyers after one week, would probably be stretching it a bit.

And what do you mean this is why people hirer brokers? the advice you gave is more or less what everyone else who is not a broker said. What have you added to this whereby you would earn a 6% commission under normal circumstances. Because if all you are stating is that you are great at negotiation, I right now will go on record to offer my negotiation skills for a 1% commission. If you are trying to say that people hire brokers because they will price it better, i also would have issues because there are to many apartments that lower the selling price, then you will say that is the sellers fault. Either way, please clarify what it is you know how to do, that these individual did poorly, ignoring the fact they posted certain info they should not have on here.

Mikev: I didn't mean to imply the seller was doing a bad job. On the contrary - they got an offer at their first open house. That's great! What I mean is that this process is stressful and confusing, and real estate agents are employed to make it less so. In this case, the sellers don't have that luxury, which is why they have turned to this board for help.

Also, I don't recall saying they should stop having open houses. But there is no reason to assume another bid is forthcoming, or that if one materializes it will be better than the first one.

Tina
Realty Collective, LLC

I'd offer @ 760k, demonstrate some comps, and wait for the bidder's next move. That should tell you if they are 'real'.

I can tell you, in this market, most buyers feel there is at least a 5% margin a seller will or should go for off ask. Add to that no broker and Id expect prospective buyer is expecting such.

On splitting the difference- I think every single person, business, negotiator at least calculates this number when in negotiation and influences their next approach, counter, what have you.

The only true friend sellers have in this market are more than 1 interested party. Try everything you can to get more than 1 interested. Even if that other is at a lower number...for now.

Use your losses on this one to give you more resolve on your next purchase, look to make your 75K back on a good deal on your next purchase.

I think this quarter is an opportune time for sellers. I think it will be a good one. I dont say it for sure temporary but I lean that way. Get what you can fast as the process for closing especially with coops could find you in July.

concur mav, motherofgawd quibbling over nickels, no broker, short $ invested in reno and kudos to ali for taking the time to do the math.

"What I mean is that this process is stressful and confusing, and real estate agents are employed to make it less so. In this case, the sellers don't have that luxury, which is why they have turned to this board for help."

I could not disagree more. Agents contribute to the stress, add to the anxiety, and are more focused on their own well being than anything else. What a buyers agent would do in this situation is spend all their time trying to convince the buyer to increase the offer and the sellers agent would spend all of their time trying to convince the seller to lower the price. There is not a lot of skill in this. What you are claiming as "reducing stress and confusion" is really just convincing each side to take less.

I'm not saying there isn't value in getting a deal done but lets call it what it is.

Completely agree with Juice. I've worked with plenty of sell-side brokers as a buyer, and with some buy-side brokers. My consistent experience is that brokers add to the stress and frustration and add minimal/zero value to the negotiation.

fts - for what it's worth, I agree with everything Miette said.

Split the difference of 4.25% & come to an acceptable number for both you & buyer.

"The only true friend sellers have in this market are more than 1 interested party."

How true.

Counter down1.5-2%, the buyer will give you another offer if they are serious (no buyer thinks the very first offer is the last one if they are serious about getting a deal done--it would be a terrible strategy). Then you counter with the final offer of say 4-5% below original ask and you are done. The buyer may seek a "nibble" at that point. That is, try to dictate timing of closing, insist on a mortgage contingency, ask that some piece of furniture be left or that something be repaired. At that point, you too can seek to "nibble" at the buyer if there is some tiny aspect of the deal you would like to include. And that's how it goes.