The Art of Sharing or Oversharing for Sellers
Part 1 of 2
Negotiation style and communication are critical aspects of Real Estate deals. Every step of the way, from marketing the property, negotiating for the best price, getting a property into escrow, to having a successful escrow is contingent on how every party navigates these areas.
The style in which I negotiate, how I communicate, and present my clients communication is critical to perception, optics, and the feelings they invoke. How, when, why and how much you share is all important.
Some Agents, Buyers, and Sellers will want to overshare. Others will hoard information like they are state secrets. Everyone will have an opinion or feeling about what’s communicated.
With my clients I share everything with you: the good, the bad, and the ugly. However what I share with the other side, I share strategically. We must share ethically, but not everything is required nor should be shared. My client’s business is not mine to share nor is the other side entitled to know everything about the counter-party’s personal circumstances.
An example of an overshare that is not required and is really not the other sides right to know? I have heard Agents share the Sellers are going through financial difficulties. Or there are 5 siblings who inherited the home who are all over the place in decision making. As a Buyer, the Listing Agent shouldn’t be told how desperate the Buyer is to buy, how many offers they keep losing out on, and how the Buyers Agent is tired of writing offers. Our jobs as Agents are to discuss a plan with our clients, and then help them achieve their goals; not cloud the other sides perception with gossip.
Can this be why a Buyer or Seller passes on working with the other side? Yes. No one wants to go into escrow with people they suspect are difficult, crazy, unreasonable, or insert derisive commentary.
As an agent, I am not a party to the deal, so my job is not to impart my emotions, biases or opinions that are not relevant and may even be construed as hostile. Unfortunately some Agents do not serve the best interests of their clients.
My goal as a Listing Agent is to help you reach the largest pool of Buyers and to encourage all of them to write an offer. As a Buyers Agent, my role is to sell you as an attractive Buyer who is ready, understands the process, is reasonable, easy to work with, and will close. This is like dating, you can’t get beyond the first date if both sides don’t have a favorable impression and want to continue. Should you be sharing neurosis, fears, concerns with the other sides? Absolutely not if it doesn’t serve your interest. As a Buyer, you have no leverage until I can get you into escrow. As a Listing Agent, my job is to not overshare where the Buyer believes they have the upper hand or can write a lower offer.
Negotiation Ethos
There is a pot of goodwill. Are you contributing to it so both sides feel good about the deal? Or does the other side already hate you or your Agent, find your side tiresome before you even negotiate for any concessions? Do you want to be right, or do you want to get results? Usually you cannot have both.
It is not our job to teach other adults how to be better humans, to be insulting, nor convince them to our way of thinking by browbeating them.
In this post, I’m going to focus on Sellers, with a Part 2 for Buyers
Sellers & Listing Agents
When I represent Sellers, I encourage them to share everything factual about the property. Everything they’ve done for as long as they’ve owned the property. Have disclosures & reports from when they bought it 15 years ago? Great, share them. Have every single repair you’ve done even though they are no long relevant because you have since completely gutted the space? Share it. Have pages and pages of contractor reports, bids, receipts, insurance claims? Share it. Give me the whole stack and I’ll scan them in and organize them + lay out an addendum for you to explain the work.
Why? Optics, psychology, thirst for knowledge and the fear of the unknown. As I tell my Sellers, a Buyer is NOT going to not buy your property because you disclosed that you had a sink faucet leak 5 years ago and fixed it. What they will wonder though when they go to do inspections is why there is staining in the bottom of the cabinet that the inspector calls out. Why let them wonder about something you have an explanation for?
Perhaps most significantly, you will build trust because you are doing something every Seller and Listing Agent should be coaching their clients to do, but are not, because they are lazy, don’t care, or never even considered the optics.
Buyers are nervous about buying a potential money pit. Savvy investors are always suspicious and build in a margin of error. The more information you share: you have a been a good steward of the property, you have fixed issues when they are known about and not let them blossom into major issues, you KNOW a lot about the property will all serve to give the Buyer confidence and more assurance than if you didn’t.
As a Listing Agent, this is the type of “overshare” or sharing an abundance of information that is beneficial when shared at the right time. Sometimes I might recommend sharing full disclosures in counters if there is something quirky about the property vs waiting until you’re in escrow as is standard. Why share disclosures in the counter-offer stage? If a Buyer is going to freak out about something big they will learn anyhow, let them find out in the negotiation phase, not in escrow just to fall back out due to this material fact.
If a Buyer is less anxious about what they don’t know about the property as you’ve shared dozens of pages of receipts and reports, as well as explanations, they may be less likely to beat you up in concessions because they don’t feel the need to build in a cushion for everything they don’t know.
In some cases to get ahead of issues, I may recommend you obtain quotes for major repairs that you know will be a reasonable quote vs taking your chances with a Buyer getting a very inflated quote. An example is you know the AC is not working and needs to be replaced. You also have the benefit of time prior to opening escrow and can take more time getting multiple bids. Asking Buyers to factor this into their offer removes the re-trade once in escrow and eliminate Buyers who aren’t serious. You can’t get a Buyer to pay more once you’re in escrow so the time to negotiate the highest price net of known issues is before you open escrow.
In reviewing offers, a key part of negotiation is setting expectations of what is to come. I set expectations early in the offer review process, with the Buyers Agent about the general desire of the Seller to sell as-is. I also learn about what education the Buyers Agent has done with their Buyer.
Buyers waiving their investigation contingency is not actually great thing for your liability as a Seller. You want a Buyer in escrow to learn everything they desire to learn about the condition of the property. Yes it may uncover things that will lead to concessions or result in the property falling out of escrow. Or do you want the potential lawsuit if they find out after they close on the property? Who gets sued in a real estate transaction? The Seller. Buyers are rarely the ones getting sued, but Sellers are the ones Buyers go after when issues arise after close.
Once in escrow, I generally encourage my Sellers to be reasonable if the Buyer asks for a concession on what is deemed reasonable. For example, if something major that is structurally deficient, health or safety, or not functional comes up during due diligence that no one could have seen physically at the property nor anticipated.
In negotiating concessions, I do not offer up a dollar amount you’re willing to concede on nor how eager you are to make this deal work with these Buyers but look to influence what the other side asks for- IE the Seller prefers to offer a credit vs doing the work prior to close and also the scope of what they ask for.
In Summary: Both parties typically will experience stress and a range of emotions in this process. Being aware of both sides emotions, perspectives, and communicating in a way that shows empathy goes a long way. If you can offer kindness or information that costs you nothing, deposit into that pot of goodwill.
Stay tuned for Part 2 for Buyers.