I have once again been asked to write a short article for the Real Estate section of the San Francisco Chronicle. A shorter version will appear this Sunday, August 26th.
Given the low inventory and intense competition in the Bay Area housing market, is there still room for negotiation?
If a seller receives a dozen or more offers on their property, negotiation is clearly unlikely. Yes, we’ve heard of some homes receiving two dozen offers, but at least in the East Bay area of California, those are the exceptions. Most homes receive either one offer, or two to five offers in multiple-offer situations. I have successfully helped buyers in several such deals negotiate for the sellers to either fix items or provide credits. It is key that buyers make their requests for items of significance—health and safety items are especially appropriate. If a seller has either not disclosed a significant item, or the condition has changed since the seller’s disclosure, reasonable sellers will often credit back for those items. Buyers must actively inspect, and document both conditions and the cost to improve them.
Keeping the best buyer in contract is still in the sellers’ best interest. Sellers shouldn’t assume that all who presented offers initially will still be interested a couple weeks later. And any new findings must be disclosed to any future buyers.
If a seller takes a hard-nosed approach or worse, a greedy one, most deals will fall apart. Greed never works, either on the buyer or seller side! I’ve seen sellers receive a few offers over list price, counter them higher still, and lose them all. “Reasonable†is the key word for both buyers and sellers, and keeping focused on the prize: a completed sale.
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