Hawaii Randy's Real Estate Opinions: Mr. Home Seller, Is This a Deal Breaker?

Mr. Home Seller, Is This a Deal Breaker?

When negotiating a purchase contract for a home, it is important to put things in perspective.  Too often buyers and sellers reach minor impasses and lose the transaction.

     "So Mr. Seller, are you really willing to risk a $650,000 buyer over a $300.00 cleaning fee?"

My question for clients who are thinking about a counter, "Is this a deal breaker?"  If you counter, you are gambling on possibly losing the deal.  The other side can walk away.  If you sign, we are in escrow.  It is one thing if we are far apart.  If we are talking something ridiculously minor, that is something else.

If my client's answer is "yes this is a deal breaker", we counter.  If they say, "I do not want to risk this deal for that", we open escrow.

Risking a sale over something minor is just bad business.

  1. The seller will be paying mortgage while they look for a new buyer.
  2. The seller is not guaranteed they will find another buyer at that price and terms.
  3. The real estate agent will be paying for additional marketing of the home.  With no guarantee it will sell.  If it does sell there is no guarantee at that price or the same commission level.
  4. Time and money will be lost for everyone involved.

Let's assume the buyer accepts your counter offer.  Most likely you will never see the $300.  You may even lose a lot more than that.  There are several points during the escrow process where a buyer can renegotiate terms.  What do you think they will do when they get the list of minor repairs from the home inspector, that many buyers would look past?  You guessed it; they want everything fixed or a cash credit.  Either way they will get back the $300, plus more.  Please remember, you set the tone for the transaction.  You made an issue out of something small in the beginning.  Now it's their turn.

So always remember these magic words when considering a counter offer.  "Is this a deal breaker?"

 

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Randy L. Prothero, REALTOR®

Principal Broker, ABR, AHWD, CRS, e-PRO, GRI, MRP, SFR

Island Style Realty Inc.

Team Leader - "The Prothero Group"

Randy Prothero is well established as an expert in working with military / VA clients and first time home buyers.  His home seller's (listing) campaign is one of the most aggressive marketing programs in the area.

Based out of Mililani, Hawaii. Randy services the island of Oahu (Honolulu County) Performs mediations and ombudsman services for the Board of Realtors.  To improve overall professionalism in his area Randy also offers classes for real estate agents. 

www.HawaiiRandy.comOahu (Honolulu County) Property Search  Hawaii Military Relocations

Comment balloon 63 commentsRandy Prothero • November 09 2010 03:17AM

Comments

currently I have a seller that would have lost a sale possibky over a $50 expense...some people are just stupid...I know your blog wasn't about the extremes that people will go to to drive brokers crazy...that was one of my blogs!

Posted by George Koppel,, The Lowenstern Team (CASTLES UNLIMITED®) about 7 years ago

Randy, this is a good example of using the phrase, "...tripping over pennies to get to the dollars..." in a real estate transaction! $300 is silly to squabble about in the sale of a $650,000 home. :)

Leilani

Posted by Bob Souza (925) 513-3400 & Leilani Souza (916) 408-5500 Souza Realty - Real Estate Broker in Placer County, California, Homes & Land, Real Estate Investments and Rentals (Souza Realty - Roseville, Rocklin, Granite Bay, Loomis, Penryn, Newcastle, Lincoln, Auburn, Meadow Vista (Placer County, CA)) about 7 years ago

George - That is beyond crazy.

Leilani - I have seen it several times.  I have been able to head it off every time.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 7 years ago

Logic and common sense - good combo.  :)

Posted by Virginia Hepp - Mesquite NV REALTOR, Mesquite NV Homes and Neighborhoods - Search MLS (ERA - Mesquite NV Homes For Sale) about 7 years ago

Virginia - Works in most cases.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 7 years ago

Sage advice Randy.  It's worth taking a step back and looking at it objectively and not losing a solid buyer.

Posted by Maggie Dokic | Miami, FL | 305.81.HOUSE (46873), GREEN, CDPE, SFR, Pinecrest | Palmetto Bay | (eXp Realty LLC) about 7 years ago

Maggie - Taking a step back is a good idea.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 7 years ago

I would suggest that, if a $650,000 transaction hangs on a $300 fix, the buyer is not serious and even if this problem is resolved, there will be others. 

Risk losing a $650,000 purchase over $300 is irrational. 

You cannot reason with irrational people.  A cleaning fee is not part of a resale "property condition" requirement.  If a buyer or seller would take a stand on a "cleaning fee" which is extra-contract, they're simply looking for a way "OUT".

When I hear irrational things like this, my response is always, "Fine, I'll sign this RELEASE and let's see if the other side will agree and the contract will end."

"Oh, well Lenn, if it's that serious, we'll just forget it."

 

 

Posted by Lenn Harley, Real Estate Broker - Virginia & Maryland (Lenn Harley, Homefinders.com, MD & VA Homes and Real Estate) about 7 years ago

Sometimes emotion is the problem when parties are fretting over a $300 issue...we need to keep them focused on the big picture....

Posted by Brin Realty Associates Team At Bean Group, Amherst NH homes and Southern NH real estate (Bean Group | Brin Realty Associates) about 7 years ago

Randy - It just amazes me in this market what a seller will counter offer for $300.

Posted by Robert Schwabe, Orange Park Real Estate (EXP Realty) about 7 years ago

I was reading the comments above about irrational, foolish etc.  But as we all know, real estate remains an emotional decision for most and occasionally there is a perceived distrust and bad feelings between buyer and seller and what could be an excellent deal for both, ends up down the drain for a few dollars.

Posted by Gabe Sanders, Stuart Florida Real Estate (Real Estate of Florida specializing in Martin County Residential Homes, Condos and Land Sales) about 7 years ago

What I say to by sellers when they begin to think it is a good idea to counter over something small like a home warranty I ask them if they really want to buy their house back over $405.  They look puzzled, but that is what the seller is doiing when they counter...they are buying their house back.

Posted by Diane Osowiecki, Greater Nashville Real Estate (Diane O and Friends - Benchmark Realty) about 7 years ago

Great post, Randy, sometimes they get fixated on the "principle" of it. The monetary figure is meaningless, however small. It can drive you nuts sometimes.

Posted by David Karp, Woodstock, Marietta GA Real Estate (Peachtree Realty Group, LLC) about 7 years ago

Randy - The same question is true for Buyers.  When the market is hot (and we had a really hot market this spring) asking for changes and fixes as a counter offer, opens up the deal and the Seller can now consider not responding and going with someone else.  Good post.  Thank you.

Posted by Valerie Zinger, Home Organizer (House Proud Ottawa-Ontario-Canada) about 7 years ago

Great Blog Randy...I have seen several sales fall through because of minor dollar issues.  Once under $100.  In the end I paid that one, because it was cheaper than another week of advertising at that time.

Posted by William Feela, Realtor, Whispering Pines Realty 651-674-5999 No. (WHISPERING PINES REALTY) about 7 years ago

You are on target. People will silly things........

Posted by Eric Bouler, Listening to your Needs ( Gardner Realtors, Licensed in La.) about 7 years ago

Lenn - My first home purchase I was countered for the home warranty.  I found another property and got an accepted offer for less money down the street.  They lost me over about $100 in those days.  It is not always a lack of being serious on the buyer's side.  Sometimes they just get annoyed by being nickel and dimed.

Rene - I see that regularly.  Cleaning has been an issue with a couple of my sellers who felt their homes were clean and they got a little insulted.

Robert - I received a counter for the escrow officer once.  Same company, different escrow officer.  I am sure that was the real estate agent and not the seller in that case.

Gabe - I see it all the time.  Sometimes it is not at the initial contract, it can be at the time of the home inspection.

Diane - In my case it is even less.  I get the home warranty on a discount through a national deal.

David - You are so right.  They get tied up on what they believe is principle and do not even think about the dollars.  That is why it is so important they we point out the monetary value of their decision.

Valerie - I have had buyers do similar.  In one case I told the buyer, I was having trouble deciding on a house warming gift for them.  I gave them 2 hours with a handyman to fix window cranks.

William - I have never had a sale with one of my clients fall through over anything that minor.  I have had a few clients dig their heals in the sand; but I have able to work through it in every case.  My phrase "is this a deal breaker" has been quite effective.  Repeating back, "so you are telling me for $300 you are willing to lose this $650,000 deal" has been the closer so far.

Eric - Sometimes it is the agents and not their clients.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 7 years ago

Randy,

It's happened before, and it will certainly happen again, but losing a $650K home over a $300 item is just ludicrous. If it got that bad, it would be my closing gift to the buyer.

Rich

Posted by Richard Iarossi, Crofton MD Real Estate, Annapolis MD Real Estate (Coldwell Banker Residential Brokerage) about 7 years ago

ANybody who has been in the business fopr w while has seen this.  It is one of our tougher challenges in a transaction.  Usually motivated by greed.  I prefer dealing with reasonable people, an this example clearly spells possible trouble.

Posted by Gary Frimann, REALTOR and Broker (Eagle Ridge Realty / Signature Homes & Estates) about 7 years ago

Randy,

I agree that the tone is set early on and affects the rest of the transaction. I tell my clients to be careful what they fight for and make sure it is worth it to them.

Posted by K.C. McLaughlin, Realtor, e-PRO, Homes for Sale - Cary, Raleigh NC (RE/MAX United) about 7 years ago

I have found if I let my sellers or buyers sleep on it...they figure it out.  Most people are irrational, they just have irrational moments!

Cindy in INdy

Posted by Cindy Marchant, "Cindy in Indy" , Realtor, Fishers Real Estate (Keller Williams Indy NE 317-290-7775 www.marchantteam.com) about 7 years ago

Randy is it really the $300.00 or a reason to get out of the contract? Buyers with buyers remorse will use any reason to void a contract. I hope you can turn it around and it goes well for you.

Posted by Michael Setunsky, Your Commercial Real Estate Link to Northern VA about 7 years ago

Sometimes people want control. To get control, they say and do stupid things. I once had a buyer threaten to cancel a deal in which I represented the seller over an empty paint can on the roof. If I'm in a bad mood, I might tell them to cancel the deal then. If I'm in a good mood, I might go up on the roof myself to retrieve it. :)

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) about 7 years ago

Each transaction is unique. I do feel like I might have been better prepared for my real estate career had my college degree been in Psychology instead of Marketing. Sigh.

Posted by Lori Cain, Midtown Tulsa Real Estate Top Producer (eXp Realty) about 7 years ago

If I were the listing agent I would discuss this with the buyers agent prior to submitting the offer to see if the buyer would consider rewriting the offer retract that minor item so it doesn't become a stumbling block, and prevent the buyer from getting the home.

The buyer was unreasonable for inserting a $300 cleaning fee in a $650k contract.

If the buyer insists on leaving it in, then I would have a discussion with the seller and provide advise based on the rest of the contract terms and the market, etc.

Posted by Bill Travis, Broker/Owner (Captain Bill Realty, LLC) about 7 years ago

Hi Randy:

 

This is so true, if the phrase is this a deal breaker comes into the conversation, then it usually is.  Buyers and sellers can lose sight of the big picture and trip over dollars to save pennies.

Posted by Jennifer Manchester, GRI, ePRO, ASP - Broker/Home Stager (Suburban Properties of Charlotte, LLC ) about 7 years ago

Randy,

I can't agree more, some folks just get wrapped around the axle over very slight issues. Sometimes they need to take a break, have a cup of coffee (decaf) and breath. I believe thats part of our job, calming them down I mean. We need to explain the ramifications of a hasty action and how it could derail the negotiations.

-Brent

Posted by Brent & Deb Wells, Prosper TX (LivingWell Properties) about 7 years ago

Really, some people cannot see the forest for the trees. Our job is to make the magic happen it is amazing though how many of them want it out of our pocket

 

Dave

Posted by Dave Woodson, Not the Average Agent (Dave Woodson) about 7 years ago

Randy, a very good point - that the buyer will adopt the same tone and get it back or more.  Nice post.

Posted by Margaret Mitchell, Seacoast Maine & NH Real Estate (Coldwell Banker Yorke Realty) about 7 years ago

This is the type of situation where it is even more important for both sides to have a Realtor.  If I am working with a professional Realtor on the other end we can always figure out a way to get these small issues resolved (and sometimes the big issues).  First you have to figure out if it is a valid issue or if the buyer is just seeing how far they can push things, or if they are just looking for an excuse to get out of the deal, and then handle appropriately.  The most common thing I hear now from buyers is how "they are in no rush" or "have plenty of time" as if to say, I don't have to buy anything right now.  It all comes down to whether they really want the property or not and whether both sides are being reasonable.

Posted by Ron Nedd (Charles Rutenberg Realty, Inc.) about 7 years ago

Oh boy...in cases like this especially for buyers I break it down to the ridiculous....lets see over 30 years that is $100 per year and less than $10 per month....then daily!   usually they see the point and we can go forward...but as others have said...when you are arguing principle it is hard to help people to be rational!  

Posted by Deborah Byron Leffler BzyBee Real Estate Lady! (Keller Williams Realty Boise) about 7 years ago

Love the phrase "tripping over the pennies to get to the dollars"... This happens. I like the "deal breaker" question and will certainly use it when needed. Thanks!

Posted by Jan Stevens (Coldwell Banker Pittsburgh) about 7 years ago

I agree, these days however many sellers simply do not have the money and do not care enough.  They are short sales, take it or leave it.  These seems to be the banks attitude too.

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 7 years ago

Buyers, sellers and agents all need to take a strp back, take a breath and look at the big picture sometimes. I have seen sellers dig their heels in over a minor issue and end up losing hundreds of thousands of dollars over it and I've seen buyers lose a home and end up paying more. Sometimes we all just need to get our ego out of the way of the deal.

Posted by Dennis & Terri Neal, Your Home Sold in 45 Days or We Se (RE/MAX, Big Bear) about 7 years ago

Craziness! It's not as though it's easy to simply find another bona-fide excited buyer in this market. What would Mr. Seller be thinking? $300 is no more than a large grocery trip bill for my family!

Posted by RhondaHeaslip NanaimoRealEstate (RE/MAX of Nanaimo) about 7 years ago

Sellers feel sqeezed & buyers fell like they can get anything they want.  It makes it very difficult to get an agreement.  And even then, the lenders are making almost impossible to get a loan!  Great market.

Posted by Jirius Isaac, Real Estate & loans in Kenmore, WA (Isaac Real Estate &TriStar Mortgage) about 7 years ago

Excellent advice!!!!

Posted by Victoria C.B. Trees, Principal Broker (Crater Lake Realty, Inc.) about 7 years ago

I had a buyer recently that wanted to write into the offer that she wanted the carpets steam cleaned. Even though she said she was ripping them out before moving in and installing hardwood floors. I just said, "Uh, no." She wanted to blow the deal over a $100!

*SHEESH*!

Aloha,

Biz

Posted by Elizabeth "Biz" Kellam, RA (Coldwell Banker Pacific Properties) about 7 years ago

Excellent advice Randy. Sometimes people get so wrapped up in the small details that it's good to prompt them to focus on the big picture.

Posted by Sandy Nelson, your Olympia area Realtor (Riley Jackson Real Estate Inc.) about 7 years ago

This is so timely for me as I'm dealing with some crazy sellers right now.  Actually, the contract negotiation went okay -- and now they are freaking out over a rent back that they requested!

Posted by Judy Graff about 7 years ago

Some buyers/sellers can be nuts over things like this.  I feel this happens more in the higher priced properties as well.  This just makes no sense to me.

Posted by Sajy Mathew, Making your real estate dreams become a reality! (Coldwell Banker Residential Brokerage) about 7 years ago

It never ceases to amaze me what people get uptight about.  Thanks

Posted by Sean Railton (Park City Realty Group) about 7 years ago

For many people it is not the dollar amount it is the desire to "win" in the negotiating game.  As a broker I feel it is my job to make sure everyone feels like they have won while still gettting the deal done.  Sometimes it is a tightrope and sometimes the conversations I have with my clients are not what they want to hear, but more times than not the deals get put together and both parties feel like they have won.

Posted by Simon Mills (Mills Realty) about 7 years ago

We are in a situation now where I am beginning to think the listing agent doesn't know what he is doing.  My clients made a good offer on a house...little less than asking price and 1/2 of closing costs to be paid by seller.  Seller comes back and says...full price and 1/2 of closing costs.  My people take a couple of days to think it over, we look over all the comparables again.  Yes, everything still makes it a great deal if we accept his counter.  So, we accept his counter. 

But, I get a call today from the listing agent and he says, "we have a problem."  I said, what kind of problem, we accepted the counter.  Listing agent says...when the seller came in to sign the contract, we did a net sheet and found out he isn't going to make what he needs to pay all of the heirs and he can't make the deal he offered.

Why wasn't a net sheet done before the seller made the counter?  Now the seller is saying he can only pay x amount of the closing costs and the listing broker's office is offering to pay for a HBW, but after everything that has taken place, in between the time of the initial offer and this final counter from the seller, my buyers are beginning to think maybe this isn't the home for them any longer.  Too many things the seller keeps coming back about...he has to make x amount of money to pay all the heirs of the estate...he has to pay taxes on the property...and so on.  I understand, buy that isn't an issue that is of concern for my buyers.  They accepted the counter and now the seller doesn't want to honor.

Posted by Carolyn Shipp, Mineral Wells Texas Real Estate (Source 1 Real Estate) about 7 years ago

I've always felt the mood of the transaction is usually up front. If someone is going to be petty up front, it's asking for trouble for the next 30-45 days.

Posted by Cynthia Larsen, Independent Broker Serving Sonoma County, CA (Safe Haven Realty) about 7 years ago

Randy,

In this case I would ask- is $300.00 worth walking away from a $6500.00; $13,000.00 or more commission or pay day?

Why wouldn't you just pay the $300.00 and call it a Day?

They are going to blame you anyway-  if the deal goes South and possibly fire you.

That's how people like that are.

 

Posted by Ben Yost - 303-587-4297, FHA, VA, Conventional - Mortgage Loans in De (First Time Home Buyer, Mortgage Rates, Pre-Approval) about 7 years ago

My - Heels - are - dug - in... Oh, every once in a while we see this.  Usually I see it after someone has already compromised, and now feels the other side is un-reasonable (an they may be).  Most often I see it when one side is a WIN - LOSE kinda person.  It doens't matter how good the deal, they have to knock down just-a-tad more so they feel like they WON, and the other side LOST... sad :-(

Posted by Phil & Celeste Pafford, Corona Short Sale Broker (PaffordHomes.com, Corona CA) about 7 years ago

I wonder how often "is this $300 item a deal breaker" resonates more with the other agent who ends up kicking in part of their commission since they probably want the transaction to close as bad as their client.

Posted by Jim Paulson, Owner,Broker (Progressive Realty (Boise Idaho) www.Progressive-Realty.info) about 7 years ago

Many good points.  Here is another way of looking at that $50 or $300 item.  Would you counter the $650,000 offer to $650,050 or $650,300?  The more you look at it the more silly it sounds.

I have dealt with similar situations several times over the last few years and we have never lost one yet.  Left to their own demise a couple of my clients might have lost a deal.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 7 years ago

You're right - people can be absolutely goofy. In their efforts to "win" they lose when the deal goes down the drain.

Posted by Marte Cliff, your real estate writer (Marte Cliff Copywriting) about 7 years ago

this is totally logical but we, as agents have to turn into emotional counselors and explain to the seller the ultimate benefits in the long run over the $300!!!

Posted by Sandy McAlpine, Search Lake Norman Homes For Sale - Lake Norman NC (RE/MAX EXECUTIVE) about 7 years ago

Randy:  Great point, we absolutely agree.  We take a very similar approach with our sellers and buyers (we belive it works with both sides).  Thanks for sharing your thoughts.  Carrie

Posted by Carrie Sampron, ABR SFR & Kathy Sampron (303) 931-3629 Highlands R (Home Smart Realty Group) about 7 years ago

Dear Randy,

Silly stands on a $300 cleaning fee usually happen because of stress. People dig their heels in on something they never would, if they had a good night's sleep, some lunch or that missing cup of coffee. I usually let them go to eat or relax in some way, after which it most often becomes a non-issue.

Posted by Dörte Engel, ABC - Annapolis, Bowie, Crofton & rest of Maryland (RE/MAX Leading Edge) about 7 years ago

I think there might be alot more of this because buyers have become so hard nosed simply because it's a buyer market.  With that said, a buyers market doesn't mean the seller has lost their mind!

Posted by Lyn Sims, Schaumburg IL Area Real Estate (RE/MAX Suburban) about 7 years ago

Sometimes people do lose their mind over stress or egos.  We do need to be emotional counselors at times.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 7 years ago

Great points Randy!!!!  And good words to remember.

Posted by DeeDee Riley, Realtor - El Dorado Hills & the Surrounding Areas (Lyon Real Estate - El Dorado Hills CA) about 7 years ago

DeeDee - Thank you

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 7 years ago

I think that sometimes you have to redefine the situation so that sellers and buyers can understand. I try to present alternatives and "what ifs". 

I am continually surprised with clients as buyers or sellers that think that the other side HAS to counter.  I must have missed that "rule" somewhere.  As has been pointed out many times, when you counter, you have rejected the original contract and are proposing another.

Posted by The Hollinden Team, Serving the Greater Louisville area (RE/MAX Champions) about 7 years ago

Steve - That is the most important point for people to remember.  It is a rejection and the other side does not have to respond.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 7 years ago

Randy, well said and I have seen deals lost because of $100 or a satelite dish! After awhile it is not the money, one or the other has upset the other.

Ty

Posted by Ty Lacroix (Envelope Real Estate Brokerage Inc) about 7 years ago

Ty - That is an important role we as agents play in the process.  We need to help avoid the buyer and the seller from getting upset over something minor.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) about 7 years ago

Love seeing the realator side of things in this chain. I'm a pending buyer and the seller has not agreed to do any of the repairs that I have asked and now my appraisal came in at the exact price that I have negotiated. I'm trying to keep the emotion out of it but it's tough.

The more "no''s" I get on repairs, the more I begin to devalue the home myself. In this case, I've asked for maybe $1,000 in repairs and I am considering backing out of the deal for the simple feeling of it (bad feeling about the deal).  Buyer's remorse maybe?

 

I never thought to ask to have the home cleaned but I am moving my wife and two babies in. In my case, it's a new young family vs. a retired couple and I understand that generation is much different than mine. I also have a newer generation's "feeling" maybe that if they don't repair what I ask then I'll find a home that owner's will repair or doesn't have the issues to begin with.

 

In this day and age, I'm concerned with the price of the home going down after purchase and I still need to sink money into it to keep it up.  

Thanks for the writting space!  

Posted by Erik Pettit over 5 years ago

Erik - It is hard, but when buying a home you need to take the emotions out to be able to make good business decisions.  The question to ask, is this home the one you want at this price?  Is it worth losing the home and what you already have invested. (price of the home inspection, fees paid to the lender and what ever you have done to prepare for the move.)  Values can always go up and down.  If you keep the home long enough you will see the cycles on the value.  In my area prices are climbing.

Once you own a home you will always sink money into it.  But what are the benefits you gain?  Lifestyle, security, etc.

In the end just ask have to ask the magic question.  Is this a deal breaker?  If it is not keep moving forward.  If it is, hold your ground and let the other guy answer the same question.

Good luck with your decision.  Buying a home can be quite stressful.  Owning a home can be quite satisfying.

Posted by Randy Prothero, Hawaii REALTOR, (808) 384-5645 (eXp Realty) over 5 years ago

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