Negotiating Luxury Real Estate in Sarasota
Negotiating Luxury Real Estate in Sarasota has been the key to success for Marcia Salkin and Paulene Soublis. Recently, Marcia Salkin was featured in a front page article in the Sarasota Herald Tribune. Reprinted in its entirety:
Keys to successful real estate negotiating
It was love at first sight. She knew, from the moment she saw the two-story condo tucked in mangroves by a canal, that it had to be hers. The second time she viewed it, she bumped into the seller, who was headed out to walk his dog.
“Your place is beautiful,” the woman told him. “I can really see myself living there.” A couple of days later she made an offer — $30,000 below the asking price, as her real estate agent had advised. The offer was rejected. In the end, the buyer paid the asking price, disadvantaged almost certainly by the enthusiasm she had revealed. In “Jerry Maguire” terms, the seller had her at “hello.”
Emotion is inevitable in real estate transactions; buyers make offers only if they feel a connection to a property, after all, and sellers are parting with their homes. But too much emotion can impede or even derail the negotiating process. Indeed, while negotiation is critical, it can be the most difficult part of the transaction, because feelings run high and because both parties typically lack experience.
“The most important thing the Realtor brings to the table is the skill to iron out differences,” said Walter Molony, a spokesperson for the National Association of Realtors. A good agent defuses emotions, while still being sensitive to the client’s needs. For that reason, said Molony, buyers and sellers generally are best served by a broker who represents only their interests, rather than one bound by dual agency, or, for buyers, seller sub-agency.
Marcia Salkin, a Realtor with Michael Saunders & Company, underscored the importance of both sellers and buyers tempering their feelings. “There’s a time as a seller where you have to get the ego and the personal out. It’s not about your child riding his bike in the cul-de-sac anymore,” said Salkin.Similarly, buyers shouldn’t allow their feelings about a property to override common sense: “They need to be psychologically prepared to move forward and make an offer or to walk away. I beg my buyers not to fall in love,” said Salkin.
Salkin also advises against sellers and buyers meeting, at least until after a contract is signed. “It’s not a cocktail party,” she said. “Sure, the sellers want to like the people who are buying their home, and the buyers want to like the sellers,” but the transaction, ultimately, is a business one.
According to Pauline Bennett, managing broker of the downtown Sarasota office of Coldwell Banker, common pitfalls await both parties. “Sellers in this market, if they get an offer, have a tendency to think they can reproduce it. The seller who lets that early buyer go often regrets it,” she said.
In addition, sellers watching their equity disappear sometimes set a price based more on a fear of loss than on what the market can bear, Bennett said. Then, when an offer comes in well below the asking price, they are disproportionately disappointed.
Buyers, on the other hand, sometimes make initial offers that are too low, even if they’re keenly interested in a property, Bennett said. The seller rightly rejects the offer, “then another party comes in with a better one, and the first buyer winds up having to pay more than he would have.”
Because the process is fraught, the bond between real estate agent and seller or buyer is crucial, Salkin said. “Listen to your Realtor. Really, it’s more important now than ever. The market has changed so rapidly. What was true six months ago may not be true today.”
She added that Realtors have “an evolving sense of how things are trending.”
Bennett has seen clients heed the advice of friends or relatives from outside the geographic area who aren’t even in the business. “Just as your wouldn’t argue with your doctor, at least not after a second or third opinion, you should take seriously what your Realtor tells you,” she said.
Another common pitfall, according to Bennett, occurs when people get sidetracked by personal property. “The buyer wants the seller to throw in the living room furniture, and the dining room set and the chandelier.” Or the seller doesn’t want to come down on the price, but suggests including certain household items. “That just muddies the waters,” she said.
Ultimately, the best scenario is win-win, in which the desires of both the buyer and the seller are met. Three conditions form the basis for successful negotiation, said Bennett: “Both parties need to be educated about the fair market value of the property, they need to be realistic, and they need to be reasonable.”
“Realistic” and “reasonable” are of course subjective. “We don’t see things as they are,” the writer Anais Nin once said. “We see them as we are.”
Translation: Try not to take it personally — whether “it” refers to a lowball offer or a rejected one, which may prove no easier in real estate than it does in life.
— Make sure you’re represented by a real estate agent with experience in your particular situation and/or a good track record. If your home is a short sale, for example, find someone who has a history of closing short sales. If your home is a standard equity sale, then check that your agent has a history of closing deals and a high sales-to-list-price ratio, suggesting she or he knows how to set prices.
–If your home is distressed (short sale or foreclosure), hire a real-estate attorney to represent your best interests.
–Be quick to negotiate on minor points, such as the move-in date or the amount of the deposit. Psychologically, if the buyer feels you are negotiating, even if the price does not drop substantially, then he or she will feel better about the deal. Similarly, don’t be too hasty to accept an offer outright. If you do, the buyer will know the property probably could have been purchased for less, and the deal may prove harder to close.
MORE ADVICE FOR BUYERS:
–Make sure you have access to a comparable market analysis, available through real estate offices, which list similar properties currently or recently on the market. Pay particular attention to the “sold” properties, because list and offer prices don’t necessarily indicate what a house will sell for. Once you’ve located properties similar to yours in square footage and other attributes, drive by them. Compare their condition with that of the house you’re considering and adjust your offer accordingly.
–Try to ascertain how motivated the sellers are. What are their reasons for listing the property? Are the moving? Do they have to sell, or are they “testing the market” to see if there’s interest? If you’re working with a buyer’s agent in the transaction, he or she can try to secure this information, but if you’re in a seller’s sub-agency situation, the broker may need permission from the seller.
–Boost your “closeability factor.” Make yourself as attractive as possible to the seller. Your finances should be in order; an offer carries more weight if you’re prequalified for a mortgage, for instance. Cash deals are even more desirable. Your agent can submit a letter with your offer that details the specifics.
–Negotiate terms, not just price. The terms of the deal — major repairs, for instance, or the closing date — may be more important to the seller than the price. If you address those needs in your offer it will be more persuasive.
— Cynthia Anderson