Delivering Bad News -- How & When

Scoring Points for Courtesy

It's never great when one party to a transaction has to deliver bad news to the other -- like, for example, when the Buyer's inspection reveals a major issue (or several of them).

But it's always better to deliver such news quickly and directly, for three reasons:

One. Getting the issue(s) on the table gives the parties more time to resolve them.

While the timetable for resolving inspection issues can always be extended if both sides agree, it's good for a deal's momentum to get a head start understanding the scope of the problem(s), lining up second (or third) opinions, etc.

Two. If the problem(s) can't be resolved, both sides get to move on faster.

That's usually especially important to Sellers, who want to know if their deal is still intact -- and if not, to get back on the market as soon as possible.

Three. Good Will.

It's the unusual (or unusually confident) Seller that isn't at least a little bit anxious waiting for the results of the Buyer's inspection.

Minimizing the time they have to wait -- anxious and in limbo -- helps create/preserve good will -- good will that will be especially important negotiating the issue(s) to come.

Listing Prices & "Leaving Room to Negotiate"

No Discount on This One

In a Buyer's market like today's, it's not unusual for gun-shy Sellers to want to "pad" their initial asking price.

Their rationale?

No matter where they set their initial asking price, aggressive Buyers are simply going to discount further from there.

So, why not pick a listing price that "leaves a little room to negotiate?"

There are three reasons that's not a good idea:

One. Self-selected peer group.

If you set your price too high, your home will be compared to more impressive homes asking the same price. And found wanting.

So, yes, you may have "left yourself room to negotiate."

But that hardly matters if there aren't any offers (or even showings).

Two. Even in a Buyer's market, well-priced homes can sell quickly, for above asking price.

Case in point: 5035 Glenwood Ave. (pictured above) in Golden Valley.

Listed in late March for $289,000, it sold -- in multiple offers -- the first week.

Ultimate selling price: $305,000.

Three. No Realtor can promise their client that they won't receive lowball offers (for all I know, the owner of 5035 Glenwood received lowball offers, too).

But lowball offers are a lot easier to repel when there is also a full-price offer -- or even better, multiple offers above list price -- on the table.

For Sellers, negotiating leverage is all about how many prospective Buyers are interested in your home.

If you price too high, the answer is usually few . . . or none.

P.S.: another fringe benefit of pricing well, and attracting broad interest: Buyers tend to pull their punches when it comes to negotiating any inspection issues.