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December 8, 2011

Mastermind for December 7th. Stingy Signbacks

by mark mclean
I can’t believe it’s Thursday and I’m already down two blog posts for the week. Blame it all on the holiday season.  While this past Monday’s meeting was pretty quite, Mastermind was busy as usual. We were happy to welcome a big group from our Danforth office. It seems that while the market is slowing down, everyone’s enthusiasm for learning is still very high. 
This week we talked about dealing with sellers who sign back at list or very near list price. It is a very strange feeling to be part of a negotiation when this happens but all I can say is…. get used to it. One of the agents was telling the group about a condo his client was offering on. The condo was listed at $450k and based on what other units in the building sold for, their offer of $410k seemed pretty fair.  The seller signed it back at $449k, just $1K  below the asking price. Obviously the seller was annoyed at the perceived lowball offer. Two issues on the table here. First of all, the group felt that the initial offer was a bit low given the timeline of the previous similar unit sale, nevertheless the listing agent could have done a bit more convincing on the sign back considering the property has been on the market for nearly a month. There are a couple of tricks to getting a good sign back. First, research the property thoroughly and be prepared to back up your number. Second, and more importantly, after presenting the offer, ask to be part of the sign back process. A further discussion with the sellers prior to their sign back gives you one last chance to negotiate on your client’s behalf. Maybe, you missed something that your client is unaware of. You may not always be successful but chances are, the selling agent will side with you. As a seller’s agent it is important to communicate to the sellers that an unreasonable sign back can send the wrong message and the reality is that there are two parties at the table trying to make a deal so keeping the negotiating civil will make the process go much easier. We all agreed that a stronger initial offer will actually save the buyer money in the long run. Obviously I have no proof of this so I would love to hear from agents with some good stories.
We sidetracked our discussion on sellers and focused some thought about stubborn buyers. How can we convince buyers who won’t move up a few thousand dollars? Try Looking at how the property has appreciated over the last few years. Average the yearly gain and then break it down by month.  A $400k condo that appreciates by 5% over the year should be worth 420k in a year so if you need to spend $5k more to buy the condo, you will make up that amount in 3 months. Yet again….math is our friend.
Have a safe and happy week.

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