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I just saw this great post on Ben Jones's blog:
http://thehousingbubbleblog.com/?p=504#comments
scroll down to 2006-04-17 06:55:44
It's very long so I won't post the whole thing. It's a repost of a Housing Panic post by a guy who did RTC work around 1990.
This bloke won't haggle. I think we all need to haggle like an Arab at a bazaar. Me, I don't stop until the "seller" is in tears.
This one works for ALL kinds of offers. You've tracked your "escalation of commitment" and are now ready to present a "quality" offer. Make sure you use the word quality. It's important. Start by saying this;
Mr. Seller, I just want to start by saying that whatever happens in the next few minutes Mrs. DinOR and I REALLY are a nice young couple! (This usually gets a slight chuckle and relieves a little tension). It also puts the seller on notice; This is not your "dream" offer! So get those notions of making a killing ALL on this one deal out of your head.
Mr. Seller, my wife and I have watched with keen interest as this property has developed and we like it. What we want to put in front of you is a QUALITY offer. (Pause here for effect as if you are choosing your words very carefully here!) Originally on the market for X dollars and that didn't happen, right? (Get them to say right or at least wait until they nod in agreement before moving on). Well, I don't expect people to do business with me, lose money at it and then actually want to do it again, right? At the same time I don't expect people to make ALL of their money off of me, O.K? (This usually gets a mild chuckle too and by now they know that you have done this before and just want to get to "the number") After much we consideration we are prepared to offer you X dollars AND we don't even need to take occupancy until X date! (Or whatever "give" you want to insert here). This works, believe me.
Don't be mean to the seller. A lot of people will prefer bankruptcy over selling to a mean buyer.
Randy H
2006 Apr 18, 4:42am
DinOR,
Interesting tactical point: should a buyer demand an actual, face-to-face negotiation with the seller? The "normal" negotiation is a completely disintermediated affair, done entirely through agents who often never even meet each other face-to-face.
I worry that many sellers will be very hesitant to agree to meet face-to-face. People use agents so that they don't have to go through the "unpleasantness" of the negotiation. They have come to believe (right or wrong) that they aren't strong enough to represent their own interests and so must delegate to a "professional".
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Much has been written regarding the origins of the bubble. One of the major contributing factors keeps getting overlooked. The simple ability to negotiate. After a lifetime of standing in line and paying whay we are told to pay we have lost the will to negotiate, the ability to negotiate or both. This is perhaps as primal as fight or flight and equally important to self preservation. Yet we've managed to shuffle this important skill off to the back burner to die on the vine as we "hone" our SHOPPING skills. As evidenced by the bubble we are all now confronting "shopping" is not getting it done. You've found a place that's perfect for you (but we all know it should be priced lower in the future) so how do we bring the future closer? How do we bring sellers closer to our reality? What skills need to be dusted off and brought back to the forefront as bidding wars subside and the new reality finally gains traction?