Negotiating Tips From a Top Agent in New York Also Apply in Atlanta

There are a few agents we keep up with whose insights on their market help us in ours.  One of my favorites to follow is Noah Rosenblatt and his great blog Urban Digs. Noah worked on Wall Street before he became an agent and is a consummate deal junkie.

In a recent post that I will link to here he wrote about the current state of the New York market and was pondering the apparent lack of motivation by the sellers to reduce their properties to what he believed should be correct listing prices.  He made a great observation about three dynamics that affect selling psychology and is worth the read.  The best observations though are at the end of the post in my opinion.  He stresses patience with the bidding process in this market, making sure that the buyer is represented as a highly qualified and committed party to the transaction.  He also uses a term “downturn risk” which is interesting as it refers to a 7-10% reduction that buyers factor into their offers as a premium in their bids, just in case values fall even lower.

He also acknowledges that if the buyer finds the perfect property with unique hard to find features that these strategies don’t apply.  We can draw real parallels to our Atlanta market in the most desirable neighborhoods and the luxury sales we reported in a previous post that did sell quickly and with little negotiations off of the list price.

I also liked his reference to “The Probe Bid” which, when used correctly gives the buyer insight into the poker hand the seller is holding.  If you look at our Atlanta market and the delta between list price and sales price you can see that there were a few extreme discounts off of the list price.  I think it drives home the importance of just focusing on sold prices and only looking at list price/sales price ratio as a key to the sellers expectations.  You would be surprised that even experienced agents will argue with you on what something should sell for based only on list price to sales price ratio!

Don’t be hesitant to offer what you believe a property is worth but do your homework and make sure you can back it up with facts, if you need to factor in your downturn risk, then do it unless you feel confident the rarity of the property will overcome it.  There are actually properties that are getting multiple bids and you could lose out, even in this market.  Equally important is to make sure that you are the best option for the seller’s in terms of your ability to close the deal.

For sellers, it would be good to remember that market interest is fragile when inventories are high and it wanes quickly.  There is always risk in overpricing but it is especially risky in declining markets when “staleness” and new competition can quickly cost you exposure.  Get good advice preferably from a knowledgeable agent or appraiser and make sure it can be backed up by facts.  Having a compelling proposition that is well presented can raise buyer confidence in your deal and get your property sold.

Here is a link to Noah’s article on this topic.

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