ArtsAutosBooksBusinessEducationEntertainmentFamilyFashionFoodGamesGenderHealthHolidaysHomeHubPagesPersonal FinancePetsPoliticsReligionSportsTechnologyTravel

An Important Lesson for Buyers and Sellers of Real Estate

Updated on March 25, 2018
Ronald Bachner profile image

Ronald Bachner has 30 years experience in building inspection, safety, and real estate experience. He enjoys local theater for relaxation.

Don't Lose Deals Because of These Mistakes.

This hub is written because in my experience over the years as an inspector of both residential and commercial property I have seen both sellers and buyers make the following mistakes in the negotiation process and in the due diligence phase before a property is offered for sale or put on the market.

I have seen these mistakes on all sizes of transaction regardless if it is a small single family home or a larger commercial project.

The result of making these mistakes costs the buyer and seller in many ways but mostly in the mistrust that is developed between the parties. The parties want to buy and sell only if they believe the other party is being fair and trust is present. If the element of mistrust is introduced the parties often panic until the point of a stalemate is present or the transaction collapses.

There is no doubt that reasonable minds in any transaction want to be respected and acknowledged. When you try to control the playing field completely you are not being reasonable and you fail to recognize that negotiations flow back and forth between the parties. If you fail to see who has an upper hand at the right point you may not purchase if you are the buyer and you may not sell if you are the seller.

So, what are the two biggest mistakes buyers and sellers make in my view. The common denominator is preparation and being prepared for when that flow of control shifts back and forth.

This preparation is important as it helps eliminates the mistrust that can and often develops during the tense negotiation, purchase, and closing process of a real estate transaction.


Buyer Mistake #1.

This mistake is very easy to avoid. The mistake is negotiation with the seller and getting a reduction in the asking price from the seller. The buyer then negotiates a clause allowing for an inspection of the property. The buyer then after the inspection wants to negotiate further a reduction in the purchase price after negotiating and getting a signed agreement.

This going back to the seller by the buyer after he accepted your less than original asking price is like trying to get a second bite of the apple. This second bite approach will likely infuriate the seller and force them to dig in their heels and not offer any more discounts. You are now forced to accept as is and walk away. Most likely you are irritated as you believe the seller should offer more.

Why did this situation develop? It was the lack of preparation and planning. It is now no longer negotiations but it was made personal. You as a buyer are now forced to buy as is or lose the deal because you failed to plan and lay ground work for fair negotiations based on the condition of the property and not because of your hurt feelings or ego. In addition you are not being fair with the seller as he already discounted the purchase price and are asking him to swallow his pride and allow you to take more advantage of him. It is here where mistrust often develops and a transaction is terminated.

Before you negotiate get the facts regarding the property. Perform your due diligence before making an offer. You can still do this with a written agreement of sale.


Seller Mistake#1

This mistake is also very easy to avoid. What is this mistake that sellers for some reason make way too often?

The mistake is engaging in negotiating with the buyer without providing full disclosure regarding the property whether it is operating statements, physical condition matters, legal, and or lease agreements terms with tenants. The specifics are determined by the actual property itself and its particular circumstances.

I have seen a number of sellers who fail to disclose all they know about the property and matters that may be pertinent to the buyer or prospective purchasers. If sellers disclose all that they know prior to negotiations then these issues will not likely become a serious stumbling block during negotiations.

They (disclosure's) put the buyer on notice and keep any issue on the property and not on the character or trustworthiness of the seller. The buyer views the seller in a positive light if disclosure is made especially of matters that are likely to be discovered during any inspection of the property, legal matter, or lease issue. Unless serious matters develop a buyer will not terminate an agreement if they are first made aware of issues and still agree to negotiate either prior to agreement or after wards.

At this point both parties integrity is still intact and respect for each other will likely go up. If a buyer believes or begins to believe the seller has not revealed important or critical information about the property the buyer will wonder what else is not disclosed and his mistrust of the seller will start to grow. This mistrust is often followed by the transaction failing to close or negotiations breaking down and everyone digging in their heels.

It is important to realize that the ebb and flow between the parties must be kept moving for a successful transaction to be completed and each party to respect each other even though the parties seldom get everything they want.

It is critical that a seller not let a buyer find anything during their due diligence period that the buyer thinks he knew and did not disclose. Further, a seller should not discount any finding or assessment by the buyer but openly discuss the matter. There is no property condition that likely cannot be resolved or discussed if it is not made personal between the parties.

I hope the above has been of assistance to both buyers and sellers. It is not weakness to discuss any matter or change positions to keep the deal together. If you take a take it or leave it attitude it will most likely not become a completed transactions.

Buyer’s want to buy just as much as sellers want to sell if both parties are truly interested. Sometimes you just have to take a little detour on the way to the closing table to deal with property issues.

Commercial Property.
Commercial Property.
Residential Property.
Residential Property.

© 2017 Ronald Bachner

Comments

    0 of 8192 characters used
    Post Comment

    No comments yet.

    working

    This website uses cookies

    As a user in the EEA, your approval is needed on a few things. To provide a better website experience, hubpages.com uses cookies (and other similar technologies) and may collect, process, and share personal data. Please choose which areas of our service you consent to our doing so.

    For more information on managing or withdrawing consents and how we handle data, visit our Privacy Policy at: https://hubpages.com/privacy-policy#gdpr

    Show Details
    Necessary
    HubPages Device IDThis is used to identify particular browsers or devices when the access the service, and is used for security reasons.
    LoginThis is necessary to sign in to the HubPages Service.
    Google RecaptchaThis is used to prevent bots and spam. (Privacy Policy)
    AkismetThis is used to detect comment spam. (Privacy Policy)
    HubPages Google AnalyticsThis is used to provide data on traffic to our website, all personally identifyable data is anonymized. (Privacy Policy)
    HubPages Traffic PixelThis is used to collect data on traffic to articles and other pages on our site. Unless you are signed in to a HubPages account, all personally identifiable information is anonymized.
    Amazon Web ServicesThis is a cloud services platform that we used to host our service. (Privacy Policy)
    CloudflareThis is a cloud CDN service that we use to efficiently deliver files required for our service to operate such as javascript, cascading style sheets, images, and videos. (Privacy Policy)
    Google Hosted LibrariesJavascript software libraries such as jQuery are loaded at endpoints on the googleapis.com or gstatic.com domains, for performance and efficiency reasons. (Privacy Policy)
    Features
    Google Custom SearchThis is feature allows you to search the site. (Privacy Policy)
    Google MapsSome articles have Google Maps embedded in them. (Privacy Policy)
    Google ChartsThis is used to display charts and graphs on articles and the author center. (Privacy Policy)
    Google AdSense Host APIThis service allows you to sign up for or associate a Google AdSense account with HubPages, so that you can earn money from ads on your articles. No data is shared unless you engage with this feature. (Privacy Policy)
    Google YouTubeSome articles have YouTube videos embedded in them. (Privacy Policy)
    VimeoSome articles have Vimeo videos embedded in them. (Privacy Policy)
    PaypalThis is used for a registered author who enrolls in the HubPages Earnings program and requests to be paid via PayPal. No data is shared with Paypal unless you engage with this feature. (Privacy Policy)
    Facebook LoginYou can use this to streamline signing up for, or signing in to your Hubpages account. No data is shared with Facebook unless you engage with this feature. (Privacy Policy)
    MavenThis supports the Maven widget and search functionality. (Privacy Policy)
    Marketing
    Google AdSenseThis is an ad network. (Privacy Policy)
    Google DoubleClickGoogle provides ad serving technology and runs an ad network. (Privacy Policy)
    Index ExchangeThis is an ad network. (Privacy Policy)
    SovrnThis is an ad network. (Privacy Policy)
    Facebook AdsThis is an ad network. (Privacy Policy)
    Amazon Unified Ad MarketplaceThis is an ad network. (Privacy Policy)
    AppNexusThis is an ad network. (Privacy Policy)
    OpenxThis is an ad network. (Privacy Policy)
    Rubicon ProjectThis is an ad network. (Privacy Policy)
    TripleLiftThis is an ad network. (Privacy Policy)
    Say MediaWe partner with Say Media to deliver ad campaigns on our sites. (Privacy Policy)
    Remarketing PixelsWe may use remarketing pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to advertise the HubPages Service to people that have visited our sites.
    Conversion Tracking PixelsWe may use conversion tracking pixels from advertising networks such as Google AdWords, Bing Ads, and Facebook in order to identify when an advertisement has successfully resulted in the desired action, such as signing up for the HubPages Service or publishing an article on the HubPages Service.
    Statistics
    Author Google AnalyticsThis is used to provide traffic data and reports to the authors of articles on the HubPages Service. (Privacy Policy)
    ComscoreComScore is a media measurement and analytics company providing marketing data and analytics to enterprises, media and advertising agencies, and publishers. Non-consent will result in ComScore only processing obfuscated personal data. (Privacy Policy)
    Amazon Tracking PixelSome articles display amazon products as part of the Amazon Affiliate program, this pixel provides traffic statistics for those products (Privacy Policy)