The notion of "splitting the difference" should have no place in real estate negotiations! This concept of "fairness" goes back at least to the story of King Solomon. When faced with two women who claimed to be the Mother of an infant (one was the true parent and one an impostor), the King suggested splitting the baby in half and giving each woman her share. When the true Mother protested and insisted that he give the baby to the impostor, King Solomon (in his wisdom!) saw the truth and gave the baby to his Mother.
In the midst of negotiating a sales price in real estate, a Buyer or Seller will often come up with the proposal to "split the difference" between two prices . The temptation is to capitulate in the spirit of "fairness", "equity", and a "win/win" outcome. But, unless this number is where you want to be in the end ... I think "splitting the difference" should have no place in real estate negotiations!
WHY? ...
- "Fairness" is not required in real estate price negotiations.
- "Splitting the difference" puts a capricious element into the negotiations. A sales price should be determined by the value of the property ... not "splitting the difference".
- Oftentimes, houses have been priced aggressively and accurately ... why should the Seller "split the difference" with an unreasonable Buyer? Where's the fairness in that?
Of course, it's always wonderful if both parties in a negotiation feel great about the outcome ... but, in my opinion, "splitting the difference" isn't the way to get there.
410-707-1840 Sue@BrazzelDazzle.com 443-745-4406 Dipper@BrazzelDazzle.com
http://localism.com/neighbor/suebrazzel
I agree Sue, it is not a game. If the price has been set fairly in the first place . . . that is the price. On the other hand, if further discoveries are made, or market conditions change . . . then those considerations need to be made. Best to you in 2010!
In the end, the important thing is that everyone feels good. If a house has been priced fairly but for some reason has not received an offer the seller will accept then if "splitting the difference" makes everyone feel ok (and the longer the house is on the market, the better the seller may feel about this) then I don't see anything wrong with it. It may be psychological and emotional but this type of negotiating happens in all sales, not just real estate.
Absolutely.
If all parties are operating according to the market info, there should be seldom need to split the difference and the parties can STILL end up with a win-win.
Frank and Jane, I agree that there are times when splitting the difference does make sense, for sure!
Candice, a win-win is always wonderful (as long as our clients are happy about the outcome!).
It seems to come to that often in my market. Annoying as it is I have to do it a lot.
Melody, right, it IS annoying and often makes no sense.
Sue
I like your take on this and yes, I agree, why split the difference with an unreasonable person? But again, if the two parties end up being happy, do we split hairs?
Ty
Ty, if the two parties are happy and have "split the difference" all is good!
I am a firm believer that the successful negotiation is one that all walk away from the table satisfied that a fair deal was transacted. Doesn't mean that one party or the other has to take a loss to get them done
I have found a certain type of buyer and seller client tend to like and use this language...typically accountants. I'm not sure why or if its just an anomaly to my personal business. I have definitely fond that not all buyers or sellers on the other side are receptive to it, but sometimes it does get two sides together that were previously too far apart to consider "caving in." Thanks for the insight!
Gerry, I agree that a "fair deal" is always nice in principle. By maintaining that "splitting the difference" is not applicable in Real Estate negotiations, I'm not saying that "one party has to take a loss"... I'm just saying that being in the middle (splitting the difference) is not a reasonable tact unless "the middle" is fair market value AND where your Client wants to be. It's mechanical process - not necessarily a reasonable one.
Yes, Stephanie, it does sometimes get two sides together ... hopefully to a reasonable point.
Sue, I have watched both sides go back and forth with "splitting the difference" until there's wasn't any to split and they were both happy... in fact, one lady enjoyed it so much that she wanted to make sure the other side came back again to split the difference..
Judi - If alll parties are enjoying - great ... as long as MY client gets where they should be!
This does cause more work on the agent's part going back and forth. As long as it works out and everyone is happy - hooray! Seller is happy, Buyer is happy and I get paid! Too often when this happens another offer comes in and the new buyer gets the house. This makes ME unhappy because my clients and I have to begin looking again AND negotiating again!
Shirly, yes, a quick resolution to the negotiations is always good!
Excellent analogy, Sue. Unfortunately, in the real world, everyone likes to think that they have made a deal. The Seller will never feel that if their "fair" priced is brought down that they have made a deal. But, if there is some room and the buyer has "negotiated" their price, then it is a win-win. Whether we like it or not, this is somewhat of a game.
Jane, yes, it is somewhat of a game ... it just irks me sometimes!