The Negotiating Edge in a Hawaii Real Estate Transaction

Axiom #1: Never negotiate from a position of weakness…

Buyers and sellers, the reason you want to hire an experienced agent is because chances are they have studied the concept of negotiation, attended seminars on behavior strategies, and taken a lot of classes around the subtle art, or as they call it “mastery” of putting a deal together. There are layers of talent these experienced agents bring to the table. Not only have they executed a lot of transactions, they have evolved along the way.

Let’s step back and look at the big picture. First, let’s establish that most people like to search for homes first by themselves (most often online) because they don’t want any pressure from a salesperson, or they don’t want to feel like they are wasting someone’s time if they just want a simple question answered. In real estate there is a huge engine of agents who pay for what is called multiple listing service. This is where sellers get their homes online and out into the mainstream. Most companies then track those inputs into websites which make information even more provocative to try to capture buyers on the loose.

This is all a fabulous and wonderful improvement because before my time they had what looked like a telephone book of all the prospective homes for sale. The books did not go home with the buyers, they stayed in the offices of the Realtor, and the buyers couldn’t avoid a salesman if they wanted to see the book. All of this eventually ended with the internet. Now, buyers who are doing the preliminary search don’t want to be bothered by a relationship with someone who at their discovery stage seems like too much of a commitment. However, buyers should retain a transaction consultant who is really working for them. They are called accredited buyer representatives (ABR is the designation), and they can make a vital difference in your contract negotiation.

Now with technology, however, the buyers get to log in and see the entire marketplace, and the cost is free because it is funded by the army of agents who make a living selling real estate. Buyers are still not clear about buyer agents who can represent them in a transaction vs. sellers’ agents who represent the seller. Once a buyer has made his purchasing decision they are more likely to be driven by the desire or the emotion to get the home of their dreams. They may not be aware that somewhere along the line they have lessened their negotiating ability in a dual agency situation.

They may have called the seller agent or walked directly into a new home sales office without their agent. Maybe they don’t have an agent yet because they are on their own. The buyer ends up making an offer with the developer agent who represents the seller. The buyer will have to sign a dual agency addendum. Always keep in mind the seller agent is in a fiduciary position—which is a binding contract to get the highest dollar for the seller. All leverage in a dual agency negotiation is naturally in favor of the seller as a result of the “signed contract which is the listing agreement.”

Just remember on your pleasant search through the pictures on the internet, there are informed agents who want nothing more than to help people buy homes. They spend countless hours in continuing education classes, some receiving quality training on “mastering negotiation.” Agents who routinely update their licenses and spend hours looking at market inventories are trained to help their clients. Agents spend a fortune maintaining things like their “sanity”…joke, and trust me, they can’t help being salespeople. Ultimately, this is why sellers’ need agents in the end when all the “self help” programs don’t end up selling their property.

Being a salesperson is a blessing. Agents who provide services with integrity should be utilized because it often is a skill set that makes a huge difference in a transaction. Keep this in mind when your agent wants to meet in person and have a conversation about how they can represent you, and what you will gain out of it. Going at it alone will ultimately put you at a disadvantage and perhaps land you a dual agency situation before you even know what it means.

Allow yourself the benefit of a real “negotiating edge” and representation by making yourself open to an agent who can provide you with valuable information. Smart buyers know how to shop for houses with their own agent. Experienced sellers always value the work that goes into selling a home. All people who are using the technology in place today please take advantage of the dedicated agents who are trained to help sellers and buyers negotiate the transaction. 

Feel free to contact me in the future for a real negotiating edge. Aloha.

Diane Chavez RS, ABR, GRI, diane@hawaiilife.com