Dear David,

We’ve been searching for a home for about three months, with no success as of yet. Our agent recommended we expand our search to include properties slightly above our price range that have been sitting on the market for a while. We came across one that’s been listed for ten months, and put in what we thought was a fair offer, based on two recent sales in the neighbourhood. The sellers came back with a counter offer close to their original list price, which is much higher than what current market data supports. Why are these sellers unwilling to negotiate based on today’s market?- TAKEN ABACK

DEAR TAKEN: This sounds like a classic case of the market speaking loud and clear to a seller who isn’t ready to hear the message. From a negotiation standpoint, it all comes down to BATNA, which stands for the “Best Alternative to a Negotiated Agreement.” If the seller is under no immediate pressure to move, they may feel that their best alternative is to simply stay put and wait for an offer that meets their expectations. If they’re in no hurry, they have little reason to compromise, even if current market data supports your offer. The truth is, sellers don’t have to recognize market value unless something motivates them to do so.

While recent sales provide a solid foundation for establishing fair market value, they are unlikely  to change the mind of a seller who’s dug in their heels over an unrealistic price. Many homeowners believe that their home is the exception to the rule: it’s more special, better maintained, or simply worth more than the house next door, even when that is objectively not the case. In situations like this, people can become their own worst enemy, holding firm to an outdated price and ultimately hurting their chances of landing a successful sale. It’s frustrating for both sides, but certainly not uncommon. Sometimes the market has to keep talking until the seller is finally ready to listen.

PRO TIP: When a seller won’t budge, even in the face of clear market data, your best move is to stay calm, strategic, and professionally firm. Try reaffirming your offer, and providing recent comparable sales to back it up. This is not to prove a point, but to reinforce to the seller that your offer is based on what you believe to be a fair position. Let your offer stand for a specific period of time, such as 48 to 72 hours, to show that you’re serious, but not desperate to buy the home. This gives the sellers time to reflect and keeps the door open, without signaling that you’re willing to chase down a deal. If the sellers still don’t engage, be prepared to walk away, since that is your BATNA. Some sellers need time to accept market reality, and your departure may be the catalyst that gets them there. 

Remember, not every seller is rational. Some will overvalue their home simply because it’s theirs. Don’t take these emotions personally, and don’t overpay out of frustration. Your power lies in knowing your limits and being willing to stick to them. #Advice #AskDavid #TheNegotiator

David is a top-selling Broker in Kitchener-Waterloo Region. He works personally with you when selling or buying your home. Moving? Get it right. Call or text David at 519-577-1212.