I had just delivered a segment on negotiating to a group of real estate sales people.
One of the attendees approached me after the presentation to discuss his dismay at an unexpected response that he had received to an offer he had made to a client Seller the day before.
The Seller resided in that property as his home which was located in an area that was still in a depressed economic state.
It had been on the market for almost 9 months (the average listing period of a property for sale in this area before procuring a Contract was 4 -5 months.)
The property was listed for sale at $600,000.00 and the salesman submitted an offer of $500,000.00 cash unconditional with settlement within 21 days, with advice from the Buyer to the Seller to “take it or leave it”.
The Seller’s response was just as instant and he rejected the offer outright.
The salesman followed through then with the usual overtures and enquired of the Seller what it would take to secure a Contract.
The Seller refused point blank to deal with this Buyer and told the salesman it was because he was offended and hurt by the offer and had no intention of ever dealing with this Buyer again as a consequence.
The question for me was “Why won’t the Seller deal with me and this Buyer?
I mean, it was nothing personal. It was just business.
It is just a matter of reaching a price so why don’t they deal?”
I then enquired more about the Seller’s circumstances and was told that the property had been his home for more than 20 years.
During that time the Seller had raised 4 children in the property and clearly had a great emotional attachment to it.
No wonder he was insulted by the amount of the offer and the way that it was presented to him.
I told the salesman that selling to this Vendor was not primarily about the PRICE.
It was far more about EMOTION and that was what he had misinterpreted and played so fundamentally wrong.
This was a very sobering thought for him and was clearly worthy of his serious consideration as it drew a long silence.
I then said “this Seller wasn’t selling this property just for money”
I diplomatically explained to the salesman that this Seller was like the father of the bride at his daughter’s wedding.
He had nurtured his new born daughter for 25 years and was now passing his precious bundle of joy and emotions over to another man’s care and love.
He was wanting to pass over this house in the same loving way.
Such was the emotional investment in this property.
No wonder they were greatly annoyed by this less than courteous approach by the Buyer.
“What should I do now then” the salesman said.
“Absolutely nothing” I said.
“Leave them alone and don’t go near them. If in 2 – 3 months time the property is still on the market you might then make an ever-so-gentle approach to the Sellers again to gauge their interest in selling to this Buyer. But don’t be surprised if you never get your foot back in the door again”.
I recall a friend of mine who made the same classic mistake when offering to buy a commercial property from a Chinese group in the same Russian style of negotiation.
They too were so insulted that they still refused to deal with my friend more than 6 months later.
Subscribe & don’t miss a single episode of michael yardney’s podcast
Hear Michael & a select panel of guest experts discuss property investment, success & money related topics. Subscribe now, whether you're on an Apple or Android handset.
Need help listening to michael yardney’s podcast from your phone or tablet?
We have created easy to follow instructions for you whether you're on iPhone / iPad or an Android device.
Prefer to subscribe via email?
Join Michael Yardney's inner circle of daily subscribers and get into the head of Australia's best property investment advisor and a wide team of leading property researchers and commentators.