When to Walk Away from a House Negotiation: Advice for Sellers

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It’s not a scenario any seller wants. Maybe your potential buyers keep asking for concessions on top of concessions, or think they can take their pick of your furniture. Enough is enough, and the situation has you wondering when to walk away from a house negotiation.

If buyers are being difficult to work with, then it may be in your best interest to back out of the deal. Sellers should consider walking away from a deal if 1) a buyer’s requested concessions get out of hand; 2) if the countering offers are lowballing the property; 3) if a buyer doesn’t put forward the necessary funds; 4) if a buyer threatens to walk away multiple times; 5) if the property’s appraisal comes back too low and the buyer won’t budge; or 6) if the moveout timeline is not feasible.

Knowing when to walk away from a house negotiation can save you time, money, and tons of stress in the long run. The tricky part is to understand whether the buyers you have are worth working with or if it’s better to scrap the deal and start from scratch.

We checked all the facts with Kenny Klaus, a top real estate agent in Mesa, Arizona, to bring you the most insightful and accurate guidance possible when dealing with difficult would-be buyers.

Klaus points out that “Usually, when it starts off that way, it doesn’t get better. If [the buyers are] already like this now, we’re probably saving ourselves a bunch of headaches and money by just walking away.”

These are the red flags to look for when negotiating any home sale.

Talk to your real estate agent about frustrations and concerns

Your best bet in any home sale negotiation is to default to your real estate agent. They will know your local market and your house best. They’ll also be able to predict whether another offer is around the corner or if a new bid could take months to get.

Speak with your agent about the status of your home sale and your neighborhood’s real estate market, and keep these issues in mind if the sale gets rocky.

Work With Top Agent to Navigate Your Home Sale

Top agents bring experience to the entire home selling process, including when negotiations get difficult. What’s more, they can help sell your home faster and for more money.

When buyers ask for unreasonable concessions

The situation: During negotiations, buyers ask for a high dollar value or an excessive amount of concessions.

In real estate, a concession is something that the seller grants the buyer during the sale of the home. For example, a concession could be a much-needed repair fix, paying for closing costs, or an item of personal property like an appliance or light fixture. A concession could also come in the form of money allocated for repairs.

In many cases, these requests for fixes will come after the home inspection. The home inspection will reveal any major and minor issues within the home. Buyers often sit down with their real estate agent post inspection to ask that some or all of these problems be fixed.

When to walk away from a house negotiation:
According to real estate agent expert Bill Gasset, who has over thirty-six years of experience and is based in Upton and Cordaville, Massachusetts, buyers should not ask you to:

  • Make nit-picky repairs that cost under $100
  • Fix cosmetic imperfections
  • Fix loose door knobs, handrails, etc.
  • Repair a broken outlet or light switch
  • Fix unsealed windows
  • Redo any landscaping work

Basically, you should only be responsible for problems the home inspection reveals to be dangerous or major issues with the home. This includes, but is not limited to, mold, termites, major water leaks, bad plumbing issues, unsafe electrical problems, and foundation or structural instability. Consult with your real estate agent for advice on what you should fix, when you should offer funds (and how much) to pay for repairs, when you should deny requests, and when to walk away from the deal altogether.

If your buyers begin asking you to fix things that are not hazardous or didn’t come up in the home inspection, then the buyer may be trying to take advantage of you.

In other cases, buyers will ask for personal property such as items of furniture, appliances, light fixtures, or (in one extreme situation Klaus faced) the chickens.

Personal property in real estate is anything that is not permanently fixed to the house, and some buyers will might want to buy some of these items when they make an offer on your house. Examples of personal property include: fixtures like chandeliers, appliances like a refrigerator or washer and dryer, or pieces of furniture that were not built in but were made to fit that specific home.

So how do you know if your buyers make a ridiculous personal property request?

Most buyers will expect the home appliances to be included in the deal. It is not uncommon for them to want to keep all kitchen appliances and the washer and dryer. While buyers can request that the sale of personal property items be considered, sellers are free to decide what they do and do not want to part with. Other than that, some requests for personal property verge on being overboard.

Klaus notes that buyers who are dead set on getting items of personal property may have lost focus. That’s when it’s important to have a top real estate agent on your side to steer them back to what they fell in love with in the beginning: your home.

If you don’t feel comfortable including any items of personal property in the sale, then don’t sweat it. You can ask your real estate agent to note that specific items will not come with the home when you sell it. The agent will put a note in the multiple listing service (MLS) so that other agents can see what you are comfortable with giving up right off the bat. That way, you don’t have to get into those negotiations midway through the sale.

If buyers are too persistent and apply pressure you are not comfortable with, then that’s when it may be time to move on.

Buyers try to lowball

The situation: During the offer stage, a buyer keeps countering with a lowball offer.

When to walk away from a house negotiation:
Your best bet in this situation is to chat with your agent, who will know how to read the market and will advise you on what offers are good, which you should counter, and offers to pass on altogether.

In terms of dealing with lowball offers, it depends on the market.

If you’re selling in a buyer’s market, then it’s time to put everything out on the table. Counter with exactly the amount you’re willing to let the home go for — this should be market value and discussed at length with your real estate agent.

If the buyer still counters with a very low offer, then it may be time to entertain other options.

If you’re selling in a seller’s market, then you have more leverage. Chances are there aren’t many homes for sale in your area, so prime real estate gets snapped up quickly.

To put your best foot forward in a counter offer:

In the meantime, entertain other offers and keep up marketing efforts on the home.

If your agent feels that the offer is too low or the buyers counter again, then they may advise you to move on.

A buyer doesn’t properly put funds forward

The situation: If you find out a buyer lied about proof of funds or did not properly put an earnest money deposit forward, then it may be time to back out of the deal.

When to walk away from a house negotiation:
Your real estate agent should contact the buyers’ lender to confirm that they are approved for a mortgage through that lender. Proof of funds (proof that the buyer can pay for your home) should already be submitted with the offer. If your agent checks with the lender and finds that the buyer lied about the qualification with that lender, then it’s best for you not to move forward.

Your buyer should also have full prequalification ready. As Klaus says, “If they don’t have a fully executed prequalification and they start to get wonky on a deal and they get ridiculous… let’s counter with what our best foot forward is and be willing to walk away and wait for the right offer.”

Similarly, the buyer also needs to submit an earnest money deposit into escrow by a specific deadline. The earnest money deposit is basically a promise that the buyer intends to purchase the property after the contingencies clear. If the buyer does not deposit their earnest money, then that’s a red flag. The deal as it stands will be void, but it’s best not to allow the buyer to put forth another deposit and continue with a new contract.

A buyer threatens to walk away (more than once)

The situation: Some buyers say that they will “walk away” from a deal as a negotiating tactic to get you to concede more.

When to walk away from a house negotiation:
Don’t let a buyer play hardball with you. If they threaten to walk away, more likely than not it’s because they want you to honor all of the concessions they ask for. If they threaten to back out more than once and you and your agent both feel that the pressure is a tactic, then consider leaving their offer on the table.

In this situation, you and your agent need to read the market, consider your home, and decide if it’s worth pushing through to sell the house. As Klaus advises, if the home has issuessuch as it backs up to the freeway or train tracks, for example–it may be better to keep working with a difficult buyer for fear that another offer is too out of reach.

If you have the best house on the block for a good price, then you may be better off waiting on a different buyer.

The appraisal came back too low, and the buyer won’t budge

The situation: Your house did not appraise for the offer you accepted, and the buyer doesn’t have the cash to put up the difference. They ask you to lower the price of the home to the appraised value.

When to walk away from a house negotiation:
If your home doesn’t appraise for the accepted offer price, then a bank will not loan your buyer the total amount of money for their mortgage. That means that you need to meet the appraisal price or that the buyer needs to pay the difference in cash. This gets tricky because some buyers may not have that money lying around or are not willing to take out a second loan for the difference.

If you can’t afford to (or don’t wish to) lower the price of the home, then you may need to call off the deal, which could be extremely risky. You may never find a buyer who can pay the extra money out of pocket upfront, or you may need to hold out for an all-cash buyer.

Consult with your real estate agent on this one, because it may be in your best interest to come down to the appraised price for risk that you will not be able to sell otherwise.

The buyer insists on moving in too early

The situation: Your buyer already sold their house and needs a place to live ASAP, but you need more time in your place in order to move into a new one.

When to walk away from a house negotiation:
Here’s what you need to know about the move-in date when someone purchases your home.

The close of escrow (COE) is the point at which the home changes hands. You must move out by the COE date, unless otherwise agreed upon. Most residential purchase agreements stipulate a specific time when possession will be delivered to the buyer. For example, some contracts default to 6 p.m. on the date of the COE. You should never let a buyer move in before that time, as you would be responsible for any damage to the house.

If you need to stay in the house after the COE date, then you can create and sign a separate occupancy agreement that states the length of you essentially renting the home.

If the buyer insists on a short escrow and will not budge, then it may not be the right deal for you, especially if it does not work for your timeline. If the market is in favor of sellers and your agent is confident that another deal is coming soon, then scrap the current negotiation and go with a buyer who can better adhere to the timeline you need.

Is it time to back out of a bad deal? When you should walk away from a house negotiation

Negotiations on your home sale can stretch on throughout the entire escrow process, and issues and disagreements may come out of the woodwork.

If you’re concerned that the deal is turning sour, then the best thing you can do is consult your real estate agent. Your agent knows the market in your area better than anyone else and will be the best adviser throughout the entire process.

This article is purely informational and is not meant to be legal advice. If you have any questions, then please consult a licensed real estate agent or real estate lawyer.

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