First Offer Dead?

July 11, 2008 · 3 comments

It looks like Offer #1 probably isn’t going to close…here’s the latest…

  • I got a call from the agent/wholesaler who is negotiating this offer on my behalf, saying that the bank’s agent has multiple offers and wants a best/final offer from us (this may or may not be true, who knows);
  • I *hate* the best/final offer negotiating tactic, and refuse to play that game (unless it’s a great deal, or I’m highly motivated for other reasons). If the agent really has multiple offers, I’m probably not going to get the property with my low bid; and if the agent doesn’t have any other offers (and is using that tactic to get my highest offer), he won’t be happy that I pulled my bid, and if I ever deal with him again, I’m expecting he’ll remember that and think twice before trying it again.
  • I’ve spent the better part of my adult life negotiating professionally, and it’s important to me that anyone I will possibly be negotiating with on a recurring basis understands that I will only negotiate in good faith (I don’t consider, “Give me your best and final offer” good-faith negotiating); I’m willing to lose a deal today to ensure that the other side understands that I’m perfectly willing to take my offer off the table if I don’t like their tactics. I may lose a good deal here or there, but in the end, knowing that the other side won’t put deals at risk by trying to screw me is worth it.
  • So, based on both the fact that I hate that negotiating tactic (again if it’s a great deal or I’m highly motivated, I can look past it ), and the fact that I now realize that this deal isn’t overly exciting (and may not even be decent), I’ve asked to have my offer pulled.

I’m guessing there’s a reasonable chance that my agent will come back tomorrow and tell me that they’ll accept my last offer (or he’ll leave the offer on the table on his own behalf), and if that’s the case, I’ll probably just try to negotiate a better price.

Btw, I know a lot of people will say, “You better get used to that tactic from selling agents, and learn to play along with it.” And again, if it’s a great deal, I will. But my suggestion to anyone who would say that, is that by playing that game with an agent you’ll be dealing with on a regular basis, you’re going to end up on the losing end long-term.

Just my opinion based on my experience…I could certainly be wrong…

3 responses to “First Offer Dead?”

  1. Andres says:

    I agree with you 100%. I hate these stupid tactics. Is this agent representing you as buyer, them as sellers, or both? It seems to me that he does not have your best interest at heart.
    When I am facing these situations I refuse to negotiate any further. Ask the seller’s agent to please provide a formal reply to your initial offer and do not write a new offer in any case.
    If they reject your offer they should scratch the price and write the one they want on top of it, initials on it, and fax it or mail it back to you. If they don’t do that then they are either a)bluffing or b) not interested in your offer. In either situation you should refuse to play that game.

    I think it is time that agents start being fair or at least learn that you and others won’t deal with them anymore.

  2. David (Edge) says:

    I like the way you are handling this. I told a realtor recently that if I wanted an auction i’d hang out on the stairs of the court house…

  3. J Scott says:

    Thanks for the support, guys!

    Andres –

    The guy that I working on this with is an agent, but is acting as a wholesaler on this deal. He found the deal, brought it to me, and is trying to put it under contract. He’d assign it to me for a couple $K more than he puts it under contract for. So, it’s in his best interest that I purchase the property, and for the most part (unless he’s trying to increase his spread/profit) he has little incentive to get me to bid higher.

    I considered that maybe he was attempting to get my bid up to get more of a spread and more profit for himself, but I could tell by his reaction to my taking the offer off the table that that likely wasn’t the case (he didn’t pressure me or try to convince me to keep my original offer in there).

    Overall, while I haven’t worked with the guy before, he’s sharp and seems to have the right priorities (helping me get a good deal, as he knows it will bring him plenty more business down the road). As long as he doesn’t try to make too much on any single deal and keeps my interests in mind, I’m guessing I’ll be working with this guy a lot.

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