Maine Lakefront Real Estate – “Win-Win” Becoming a Thing of the Past

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Maine Lakefront Real Estate – “Win-Win” Becoming a Thing of the Past


Years ago, when I first dipped my toe into the waters of lakefront real estate here in the Lakes Region of Maine, I was told by a long time veteran broker that too strong of a market, one that favored either the buyer or the seller, was not good for business.
He explained that in a strong seller’s market the seller takes advantage of the many buyers and, conversely, in a strong buyer’s market the buyers take advantage of the many sellers. Of course, one side can only take advantage of the other when market forces are on their side.
I was reminded of this the other day when Diane Monaco, our senior buyer representative, poked her head in my office and said, “I’ve been reading your blogs lately. They all seem to describe unreasonable buyers. Why don’t you tell our friends about some unreasonable sellers.” Well, okay. Here goes!
In the great seller’s market from 2002 to 2005, sellers became very demanding of buyers. That’s because supply was very low and demand was very high. I witnessed offers of 99% of the asking price being turned down by sellers. Some sellers wouldn’t give up a cent. “We’re not giving it away” was their attitude.
I remember a 35-year-old seller selling a lakefront home that his grandfather had built in the forties. The seller had inherited the place and decided to sell. When it came to negotiating an offer one would think that he had personally built the place by the sweat of his brow. Someone who was to make a half a million dollars bargained for every last penny as if his life depended on it. Good business? Perhaps. Bad karma? For sure.
During the height of the sellers market one seller asked me to make it a requirement that all buyers produce a letter from a reputable financial institution proving that they were eligible to purchase prior to viewing his home. The seller didn’t want any riff-raff daring to look at his home. Only folks that had passed financial muster and were thus deemed worthy could view his home. Think I’m making this stuff up? I’m not.
Another seller, prior to a closing, instructed the selling agent not to give the keys to the lakefront home to the buyer until it could be proven that the proceeds of the sale (in the form of a cashier’s check drawn on a reputable bank) had safely been deposited in the seller’s bank in Florida. For three hours after the closing, the buyers, deprived of the keys to their new home, sat in the reception area of a local attorney’s office waiting for the bank in Florida to acknowledge the receipt. All the while, a moving truck with all the buyers belongings sat idling outside, belching diesel fumes as if to say “this stinks”. Where were the sellers? They went off for a celebratory champagne lunch! How do I know this story is true? Because I was the buyer. How much bad karma was stirred up that day? Plenty!
In more equitable markets the ideal is to have both buyer and seller feel as if they have gotten a fair deal. “You give a little and I’ll give a little and we’ll come to an agreement.” Both give and both get. This is the so-called “Win-Win” situation. But in unequitable markets one side has tremendous leverage over the other and that leverage can sometimes lead to feelings of greed, frustration, and resentment.
A great sales manager once advised me that, when it comes to negotiating, do your best, but don’t leave a bad taste in your opponent’s mouth. It was simply bad for business. “You can’t make everyone a friend, but do everything possible to avoid making enemies. Never make the other side feel like losers by taking away their pride”.
At one time it was considered good form to be gracious in victory. Leave the other side their pride (and a few dollars!) so they feel like they’ve won something, too.
Well, today we’re in a buyer’s market. Supply is high and demand is low. The shoe is on the other foot. Now we have buyers making very low offers to sellers, hoping to find someone desperate enough to accept. What about Win-Win? I’m afraid that concept has been relegated to the dust bin of history – back when the market was more equitable.
Today, market conditions are being leveraged by buyers and brought to bear on sellers. Are sellers feeling the squeeze? You bet. It can be downright painful. Good business? Perhaps. But, how I long for that more equitable market, where “win-win” will once again rule the day.
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