Negotiating Better - Fundamentals of Effective Negotiating

Thanks for all the good advice. I had seen this apartment on my own without an agent - so there is no buyers agent (I do have an attorney that will come into the mix once I place/accept offer). I communicated what I thought I could offer to the seller's agent and I was told she talked to the seller and that he could not go that low.

In New York, verbal offers mean nothing. They don't have to be communicated, and, in fact, I always tell potential buyers that they won't be.

Anything that is written, however, does have to be communicated, so if you want to make an offer, send an email.

Despite those two rules, sellers often give brokers instructions -- and the selling broker will try to guide you. Do you have to listen to them? No. But speaking for myself only, when I say something like "the owner has already turned down $650K" or "he's really looking for a number that starts with a 7" -- those are not things that I made up, they are part of the history of the negotiation and I am trying to help you bid.

It doesn't mean you can't bid $600K, just that that bid probably won't work.

ALSO -- for all you people who think prices are going to plunge next year -- BUY next year! As we have learned time and again from these boards, giving tomorrow's price in today's auction doesn't work.

ali r.
{downtown broker}

Ali - With all due respect, as the listing broker, you work for the seller, and your job is to squeeze as much money out of the buyer as possible, within the bounds of legality and fair dealing.

A statement like "I am trying to help you bid" may be true in the narrow sense of moving the process along. But too often, it's the kind of help a car salesman provides when he says, "Gee, I'd like to sell you that Yugo for $15,000, but I know my manager won't go for it. I think I can get him to do $17.5. What do you say?"

This isn't an attack on you personally. I'm just talking about the role of the listing broker.

Was just revisiting this discussion and find it very very helpful. I have a question for those of you on SE that have much more experience than I (pretty much all of you).

I've made an offer on an apt and the listing broker is open about what other offers have been received (amount and terms). My initial offer was identical to another (though they were offering more down) and there was one other that was slightly lower. The seller declined all bids but didn't make any counter.

The other bidder just upped their offer slightly and also upped the amount of down payment.

This is a situation where now I am bidding against someone else w/out the seller having to reveal anything about their position. I have a hard number and I'm willing to walk away but wondered if anyone had any advice or views on this situation.

disregard all said to you by any party to the deal--research and establish YOUR value and negotiate such that ultimately that price (at the very highest) is your final offer--dont worry if your best is less than that they "already have"--ive pulled out of negotiations in the past cuz my best was less that that which they "already had", only to get a call in few days/weeks that the better had "fallen through"--in this market you dont bid against anyone--you negotiate to your highest offer and tell them to call if all the better bids fall thru

Ubottom: thanks, that is my feeling on this.

For the co-op board I can see why a greater % downpayment is attractive, for the seller though, what is the merit in upping the downpayment amount? Is it just to show that you are a better candidate (more likely to have no hiccups getting the mortgage etc?)?

agreed re the illogic of the attempt to up your downpayment--smells like BS--if you are financially capable by definition of the board, and if your down is sufficient to get a mtge, that should not be a factor for the seller--if your comp is all cash and doesnt need a mtge contingency,thay have an edge

main poiint tho is not to get involved in this kind of discussion--show no more than your best estimate of value to YOU--you have huge pwer in your ability to walk away in this buyer's market

my bet is the person you are "bidding against" does not exist

"my bet is the person you are "bidding against" does not exist"

It doesn't even matter. Too many people get riled up by brokers supposedly fabricating other bids/bidders, but this is all pretty inconsequential. Figure out what the apartment is truly worth to you (that is, what is the max amount you are willing to pay), and if negotiations take you past that number (or can't get you at/below it), then it should be fairly obvious to walk. As for the amount of downpayment, buddhahat, you're right on - for the seller, it's not really significant other than potentially hinting that your finances are in better shape. But it's a small piece of the puzzle in the end (the downpayment, not your finances!).

Yeah, I realize that whether the bidder is real or not doesn't matter as the net effect is the same if I opt to engage in bidding against them (and against myself). Seems this will end up as the converse of the scenario painted much earlier in this thread (buyer to seller: give me your absolute rock bottom price. Seller: this is my rock bottom. Buyer:Ok, now let's negotiate). Bidder A and Bidder B effectively get to or close to their maximum price and then seller steps in to say, now let's negotiate.

I do have my price (and have done my homework) so feel confident about knowing when to exit but I do find this situation interesting (and confusing) from a negotiation strategy standpoint.

I wish I had read all this earlier..
I'm a first time buyer and apparently suck at negotiating.

I had made a reasonable offer (and raised it twice) a year ago, and the seller declined my final offer.
I was not in a hurry and walked away.
(seller tried to sell for another few months and has a tenant now.)

Now I've made an offer for another apartment.
Did all the homework, found out about comps, estimated renovation costs. The offer was low, (expected to move higher and meet in the middle of the gap.), offered to buy all cash.

Seems like I have offended the seller with the bid, got a terribly frosty reply that there were substantially higher offers and "good luck with the other apartment you're interested in". Sounds very final.
(Although I don't really believe the substantially higher offers, the seller certainly believes he will get a much higher one eventually..which is possible, of course)

Now, I did not make an offer on the other one I'm interested in yet. ( unfortunately the seller bought at a high price a few years ago and there's probably not much room to move.)
I'm afraid I will get a final decline as well..

Now, can I tell seller # 1 that I didn't mean to be offensive, that this was just my first offer, that I expected to move higher?

Should I make a pretty high offer for apartment #2 to avoid another reaction like that? (There I would probably end up above market value.)

Please help.

153: apts are going DOWN in price - no need to buy right now. plenty of fish in the sea...

153: I suggest reading this thread again.

For your first question, no, you should not tell the Seller that you didn't mean to be offensive - you are bargaining against yourself, which is never good. If you want to raise your offer after a rejection, do so, but don't immediately tell a seller that you expect to raise or they will make you raise your offer.

For your second question, why would you pay above market value? Seems to me that there is still a lot of inventory out there, that prices are still soft. Unless you absolutely love the place and there will never ever be another like it and you want to live in it for 10 years, why pay above market just to not get rejected. It's your money, but that seems a waste to me.

153, this is really rather a game, isn't it? You don't really know that seller #1 is offended & shouldn't care except that you want to keep them playing so, to that extent, you can apologize but certainly don't grovel; maybe say something like, 'Well, if you don't want to play this game, call me if you change your mind; the ball is in your court." Perhaps we make the mistake of assuming that the other side is any better at this than we are. Sure they've got a RE pro but ultimately it's the seller & not the agent who is calling the shots. As far as offering on #2, don't be cowed by the game. Maybe you want to be more careful when you make your low ball offer & give then comps & explain politely how you got to your figure but if you've done your homework & know what you think the unit is worth, it would be foolish to make a higher initial offer. Best of luck to you & YOU'RE DOING GREAT; KEEP UP THE GOOD WORK ! ! !

AnonMan2002, not within my low end price range (up to 600K for a condo) I'm afraid...

Boss77, I did read the thread, and someone suggested to react like "I certainly don't want to insult anyone. You know I like the "bones" of the apartment very much, but the amount of work it needs worries me." if you feel you've offended the buyer. That sounds reasonable to me to get back into the game...
Or should I just say: I understand. I raise my offer to .....(substantially higher, in the middle of the gap)
Since there is room left for me to move from my low offer I would hate to be left out right here.

The other one is unique (has several downsides though), I guess someone will eventually pay a collector's price for it.

'The other one is unique (has several downsides though), I guess someone will eventually pay a collector's price for it.'

I think you need to get into a different mindset; it sounds like you're pessimistic. "My perfect condo at the perfect price is coming to me now." Repeat over & over. If you start out thinking you're not going to get what you want, guess what? You won't.

153, I meant reread, because as pointed out above somewhere, you should never negotiate against yourself, which is what you effectively will be doing if you make an offer above market because you are afraid of a rejection and also telling a Seller you expect to move higher. If you are interested in the place, perhaps the way to phrase it is as you suggest and perhaps when you make your offer indicate that you expect this to be a negotiation. Personally, I wouldn't raise substantially higher, but without knowing the apt, location, price, it's hard to make a determination.

Boss77, just to be sure I understood you correctly : "phrase it is as you suggest " - you mean the one I came up with? (I understand. I raise my offer to ...) If it's not substantially higher I will offend the seller even more though?
(I'm a woman..can't help to consider emotions.. + English is not my first language)

drdrd, thanks for making me smile. I'm the worlds greatest optimist, but my optimism got a bit shaky lately.
You've probably not looked at anything in my price range ever, but I can tell you that when you've seen 30 crappy places and two nice ones you get nervous to lose out on them..
but still, I love your mantra and will take your advice.

kudos on a great thread. here's my situation. gave up on buying for the time being due to the standoff between buyers and sellers. saw a bunch of rentals and finally saw one i liked, a Classic 6 in a good location in a beautiful drmn building asking within my range and a no fee
but priced a bit on the high side. Made an offer 20% below ask and the broker, ostensibly prior to contacting the lease holder (who was subletting and wanting to get out of a lease), informed me of another application coming in. Then she texts me to say the leaseholder is going with a "substantially higher bid" over mine, and she suggested I contact her if I "was still interested". My response was simple; my offer expires in 72 hours. Am I handling this one well? Should I have called her and attempted a counter on a possible fictitious "other"?

thewiseking - is this a coop or a rental building?

this was an offer on a sublet from a leaseholder wanting out in a rental building.

In this market, 90% of the time when a broker says they have a higher offer, they are lying.

I agree with Modern, but this is sort of strange.
If the leaseholder is really trying to get out of the lease, he/she will try to get out clean (not continue to have to contribute to the rent) so will look for highest rent until they give up and continue to pay a portion.

If they're trying to make money on the sublet, in NYC anything over a really small dollar amount (can't remember offhand how much that is) is illegal.

Even Cyndi Lauper got a ton of money back from what she discovered was her illegal profit making sublet.

def not an illegal sublet. more likely scenario based on what i could glean is a bubble renter in trouble. of note; i still kinda want the place. should i lay low or contact broker again and risk bidding against myself against the phantom bidder with the "substantially higher offer".
what made this seem odd was how there was never any mention of another bidder until after i made my bid and was then informed that the lease holder was "going with the higher offer" yet the broker went on to say " let me know if you are still interested" and "i will be sure to let you know if this falls through".

Why not wait until broker "lets you know if this falls through".

After whatever you think that time frame is you might call broker to "just checking in - seeing if it's gone" - then evaluate the evolving story line.

Thewiskeking - is this the same broker that is making goo-goo eyes at you? (from other thread). PLEEZ - she's REALLY playing you.

thanks ph! i agree, which is why my only response to her has been "my offer expires in 72 hours". If I hear back from her on the apt I will then hold tight to my lowball. If the deal goes thru and she is still making goo goo eyes, then I have a great apt at a fair price and a great new girlfriend. somehow, i think both will fall through!! (I'm a realist, not a realtor)

twk If she does come back to you, I would guess there is no other prospective renter at all -

you're the only one who knows if you think the apartment is worth somewhat more than your "lowball" and if you're willing to raise it.

"I'm a woman..can't help to consider emotions.. "
153 - that's a crutch that you just don't need. there is no need to be nice when negotiating. Keep it all business. No need to make friends. I'm not advocating being rude, and flattery will get you places, but you shouldn't be worried about people's "feelings"; i guarantee they aren't thinking about yours.

that being said, if you really want one of these places and are comfortable paying "more than market" (whatever the hell that means at this point!), grovel away. you don't want to regret loosing a place b/c you're trying to "negotiate properly". Do what's best for you. Hell, use the "i'm a woman" crutch if need be ;). Best of luck to you!!

^sorry, "losing a place..."
my brain is mush these days.

uwsmom, thanks for the encouragement.
I wouldn't be comfortable to pay more than market, but I would be willing to pay more than I've offered.
The thing is that I'm not sure how to resume negotiating after the seller clearly wished me "good luck" (or "go to hell", really). For me it sounds like he doesn't even want me to go higher,he just wants me out. which, considering my all cash offer and the fact that very few people start with their highest imaginable bid really is a bit surprising. I would have expected: "too low", or even "way too low", and then raised my offer, but "good luck" sounds like a final point.
btw, can't play the woman card. Met with the buyer once and found he's got no humor..no smile, no reaction to nice, charming, humorous comments (on other stuff, NOT his apartment), sporting a strict poker face all the time..

What I also find difficult re market is, that I keep hearing totally different opinions about the current situation. Friends, neighbors and my attorney believe that it's a good time to buy, but the real bargains are yet to come, and all the rest (brokers, sellers mainly) tell me that demand is very high (some apartments I had viewed that were not even advertised yet, or only for a few days, according to the brokers/owners already had (sometimes several) high all cash offers.(meaning that my all cash - card wasn't worth anything)
While I can sense that that's not necessary true, I'm surprised in what harsh a way they actually keep me from making an offer at all..(because it would be too low anyway. Brokers on very high priced units actually told me a few times that it would be "a waste of time", unless the offer would be "very close to asking".)
Compared to my first attempts to buy an apartment last year, this actually feels different.

how about contacting the seller, telling him you really like the apartment and are still interested, and asking him what price he would be willing to consider. see what he says. you can still offer your higher (highest) price. he may just act like a dick, but at least you tried.

as a woman, i find that it can be hard to negotiate with men. i've heard more than once, "would you like to talk this over with your husband". sexism is alive and well.

the volkswagon dealer actually called me "little lady" and then proceeded to make his follow-up call to my husband (whom he had never even met).

yeah, i had to stop dealing with the broker on our last place b/c his level of disrespect was so infuriating. i made my husband deal with him, which was punishment enough to the broker b/c my husband is impossible to get in touch with most days. still got to call all the shots through hubby :). my husband couldn't stand the guy either.

very true, would consider to send my husband in if I had one :)
On the other hand, when showing the apartment, seller's wife did all the talking...(giving the impression he was in need of someone to watch what he's doing)