For some people, the buying process is all about the deal—not really about the product itself. These folks would prefer to argue the purchase price of a loaf of bread despite their state of starvation. I marvel at some car buyers who expect to buy their vehicle below what the dealer paid for it. That the dealer needs to make money never seems to enter their mind, let alone their checkbooks. Now a house…well, that’s a whole new level and a lot more bucks. If you are buying or selling a house, get ready to haggle. With that in mind, Contributing Editor, Ron Carmean, puts on his haggling hat for today’s blog. You’ve been pre-approved, so come on in…
You bought your house for $350,000 and put $100,000 renovations into it. You have lived there for 6 years. Your job requires you to move cross-country. You like the house, neighborhood, and schools, but you must move. Reviewing the market, you discover a house like yours in good condition goes for $400-420,000. You list it at $400,000 to “speed the sale” and move as your job requires.
Four weeks go by. Many people visit your house and you have two Open Houses. Finally, you get an offer: $350,000. You say no. Another offer from the same person is made: $360,000. You are getting impatient and your job requires you start very soon in a new location. You make a counter offer: $380,000. It’s $20,000 below your asking price and $40,000 below a realistic market value. You are angry at selling your home for so little, but you tell yourself: It’s time to move on with my life. The potential buyer responds: OK, but will you pay our closing costs of $8,000? You are tempted to say: Will you pay our closing costs? But you don’t.
Instead, you think a number of other things. Should I have started with an asking price of $420,000? Should I say I’m losing $70,000 on this arrangement, and you want another $8,000 break? Do you think to yourself: Why does a buyer always expect a “deal”, even after one has already been reached? They seem to derive as much satisfaction with “getting a deal”, as they do in buying the house. Do they react the same way when buying a car, or a lamp from a flea market, or whatever it is they are buying. Do they know or care what the actual value of the house is? Do they realize their gain is the seller’s loss? Or do they assume everything is worth less than the asking price?
Finally, when you are done thinking, you actually say…
But wait! What would YOU say? I would be interested in your comments.