Bridging the gap: Negotiating the final 10%
Owners who are struggling to come to terms with the fact that their property is worth less than what they originally expected aren't looking for someone to tell them what to do. They are looking for support. Someone on their side, in the foxhole with them, lamenting the lack of better offers available.
How many deals grind to a halt when they are less than 10% apart?
We've all been there - managing an offer that's getting close, but as you creep closer to a sale, buyer and seller both stick their heads in the sand and won't move another inch.
These situations are incredibly frustrating, especially if you know the offer you are working with is likely to be the best one the owners will ever see. And especially if you've been on the market for months, had countless viewings and open homes, got your hopes up for multiple interested buyers who never amounted to anything, and are starting to think you might walk away with nothing.
Bridging the final 5-10% between vendor and purchaser is both a skill and an art form. Mastering this key aspect of the real estate game not only leads to more sales and increased income, but also client-for-life relationships with sellers singing your praises for years to come to anyone who will listen.
In this two-part guide, I'll share tips, strategies, scripts and ideas to help you get more of these 'close-but-not-quite' offers over the line.
But first, let's consider what goes wrong in most of these situations.
It's natural human nature that when we want another person to do something (like accept an offer you've worked your butt off to secure), we try to convince them why it's a good idea. We try to sell them on it.
So when most salespeople get into a situation where a negotiation stalls $10k, 20k, $50k apart, they start offering reasons and justifications why the seller should bite the bullet and make a deal:
- "The buyers are offering this much because they need to fix all the problems with your home."
- "The house down the road which is similar to yours sold for less."
- "Nothing in this area has sold as high as this in the last 2 years."
- "It's the highest offer we've had in 3 months on the market."
- "If we don't take this offer today, the buyers are going to offer on another house."
- "Your home has X,Y,Z problems which are putting other buyers off, so you should take this deal."
- "These buyers have been looking for 4 months, they know the market."
- "If you put the money in the bank you'll earn X interest."
- "This is a great offer in this market."
The list could go on forever. In these situations, salespeople are incredibly talented at coming up with reasons why the owners should do what they want them to do.
The problem is, this plan of attack moves you into an argumentative situation. It automatically puts your owners on the defensive. As soon as you present reasons why they should take an offer lower than their original goal price, their brain will naturally start coming up with counter-reasons why you are wrong, to help convince themselves that they are right.
The vast majority of people do not like being told what to do. Especially when it comes to the sale of their biggest financial asset.
Think about it from their point of view: Owners walk into every selling situation worried that they are going to be taken advantage of. They are on the defensive from the moment their home goes on the market, looking out for how they are going to get screwed. As soon as you start trying to convince them to do something they inherently don't want to do, their internal warning alarm starts firing, telling them to stop, pause, and avoid danger at all costs.
That's why when negotiations get hard, and you reach a point where someone has to move beyond a price where they feel comfortable, everything grinds to a halt. It feels crazy as a salesperson to watch buyers and sellers walk away from deals that are oh-so-close, but we have to understand it's an emotional barrier, not a financial one that stops progress.
All your logical justifications for accepting the offer mean little to the owner when they are in this headspace. In fact, they often just make the situation worse.
