Negotiating in a Tough Economy

As of April, 2009, there is a great disparity between what a buyer wants to pay and what a seller wants to accept.  I have never seen a gap as big as it is now.  However, there are stil some buyers that want or need to purchase a property now and there are still some sellers who really need to sell their property now.

Of course if the Seller is desparate, that is different and all bets are off as to what that seller may accept.  But what if the Seller is motivated for one reason or another but not desperate.  How doe deals go together then?

As always, both parties need to recognize the market for what is is at the time they are negotiating the deal.  The buyer can’t be thinking that prices will be 20% lower in a year if they need to buy now.  The seller can’t be dreaming of the money he isn’t getting that he would have received a year ago.  Only the hear and now  count when putting a deal together.

Many buyers remind me of the old Groucho Marx line that he would never join a country club that would accept him as a member.  That is, these buyers typically worry if they make a low offer and it is accepted.  Now they start obsessing that they simply overpaid and that they are unmitigated jerks.

If one is knowledgable and has studied the market and predetermined what a good deal is, than they have a very good chance of buying a property.   On the contrary, if they do not know the market and they what to see blood gushing from the seller before they will do the deal they will never buy a property.

Even in the marketplace I am still speaking to property owners who feel they have the golden goose and that their property is like no other. Of course they expect buyers to pay much higher prices for this prized piece of real estate. When that happens we can kiss the deal goodbye.

So the moral of this tale is to negotiate in the market in which you are negotiating in. Not the land of Oz. It also helps to know what is going on in the market in which you are negotiating.

Tags: buyers, negotiating, Sellers