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The Negotiation Ain’t Over Till It’s Over

Sold SignYou might have noticed a little something going on called the housing boom over the last few years. (Or housing bubble), however you want to see it. It’s been a sellers market.

A friend of mine, Richard “The Rocket”, moved out to Calgary for a while. He bought a pretty typical four bedroom  house. After about a year he sold the house and came back to Vancouver.

Adding Value To The Property

Richard is a salesman and a very good one. The first thing he did before putting the house up for sale was add some value to it. He cut up one of the living areas and added a fifth bedroom. Now he was selling a five bedroom house instead of a four bedroom.

He also decided to put new carpet in the rec room. He ordered the $1200 carpet and called a real estate agent to get the ball rolling.

The Sale

It took one day to get an offer on the house. Did I mention it’s a seller’s market?

The offer was firm and it was a pretty good offer. He was selling the house because he was moving, but he was going to make some money on the deal as well. And this is where the story gets interesting …

To experienced salespeople, having a good offer on the table is not the time to rock the boat. He could have waited for a better offer to come along or he could have told the buyer “no deal” to see if he would up the offer (sometimes you can squeeze a little more, even out of a firm offer).

The hurtle in doing either of those things involves losing the buyer and having to wait for another buyer to come along. It’s always better to sell something quickly because the longer it’s up for sale, the more questionable it is to potential buyers. That’s especially true with real estate.

So it’s a done deal right? Not quite. There were two more opportunities to make some extra money on the deal:

Richard told the agent he would accept the offer on two conditions:

  1. He would cancel the $1200 order for the new carpet
  2. The agent would cut his commission in half

The carpet was a no-brainer, and even though the agent didn’t like losing half of his commission, Richard argued “Hey, it only took you a day to sell the house”. The realtor agreed, took the cut, and The Rocket sold his house.

Creative Negotiation

Creativity during negotiation always brings interesting results. When you’re near the conclusion of a deal there’s often an opportunity to find some extra money sitting on the table. Sometimes it’s in the form of upselling. Sometimes you can take something out of the deal that’s worth money to you without lowering the price. If there’s a middleman or a broker, you can often cut the costs of putting the deal together with a little pressure.

Don’t just negotiate with the buyer. Negotiate with everyone involved in the deal.

Denouement
 

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One Comment

  1. [...] 3 or 4 bedroom property and the layout gives you ample room to divide up a family room or rec area, add another bedroom. This is one of the easiest ways to really add value to a property that allows you to get more rent [...]


 

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