If the ultimate trump card available to Sellers is the existence of multiple offers (see, “Is it REALLY in Multiples?“), what is the equivalent for Buyers?
The threat to move on to another home.
So, how credible is such a threat?
Interestingly, the three-step analysis for Sellers parallels the one confronting Buyers facing potential competing offers.
Move on to What?
Step One. Is the threat plausible based on the house and the market?
If there are ten similar homes for sale nearby that are all about the same price and in the same condition, and the Buyer says that they’ll move on if their offer (counter-offer) is rejected . . . you’d tend to believe them.
Even if that’s a stretch, if the home in question has been on the market for awhile, it may be hard for the owner to pass up the Buyer — and offer — in front of them.
That’s especially true if showings have been few and far between.
By contrast, a Buyer who threatens to “move on” is less credible when: a home is new(er) on the market; it’s priced very competitively relative to its peer group; and its location, design or other features make it relatively unique (i.e., it has no close substitutes).
Good agents know the competing inventory, and whether a given home is poised to sell — or sit.
Step Two. Probe the Buyer’s Agent.
Just like Buyers’ agents have been known to ask the identity of other bidders, Listing agents can certainly ask what other properties the Buyer is considering.
They may not answer (and don’t have to), but simply the way they field the question can be telling.
I represented a Buyer two years ago who had exhaustively studied the market, and had rank-ordered their top three choices (which were all virtually tied).
When negotiations to buy their first choice stalled, I informed the Listing agent that my client was ready to move on.
“To what?,” came the instant reply.
Without hesitating, I gave the addresses of the two “runner-up” homes, and proceeded to rattle off each one’s merits and drawbacks relative to the subject home, their market history, current asking prices, etc.
The Seller came around.
Step Three. If neither of the foregoing techniques work, there is always a surefire way to determine whether a given Buyer’s threat to “move on” is real.
If they were bluffing — or couldn’t get an attractive enough deal on house #2 (or #3 or #4) — they’ll be back (undoubtedly with a stronger offer!).
On the other hand, if house #2 goes “Pending” two weeks later, and the Selling agent is the same one you were just negotiating with . . . it wasn’t a bluff.