Difficult home buyers are a dime a dozen in real estate. You’ll encounter difficult house buyers who will want to re-negotiate the price after you’ve accepted their offer, who will demand that you stop showing the apartment, who will try to negotiate on the commission that they’re not even paying and who will demand board approval for their renovations before closing. Here’s how to deal with the most common difficult home buyer situations.
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Difficult house buyers will demand the seller stop showing the property and to cancel all upcoming open houses as soon as they have an accepted offer. Often times, they’ll bluster and threaten to pull out of the deal if the seller doesn’t put everything on hold for them.
This is a classic move made on a frequent basis by difficult home buyers, and can be countered by explaining to them that it’s industry standard to continue showing the property and even holding open houses until a contract is signed.
After all, in many states like New York, an accepted offer is rather meaningless and nonbinding until a purchase contract is signed. In fact, a buyer can back out of an accepted offer in NYC at any time prior to signing the purchase contract and handing over an earnest money check.
Moreover, some buyer’s attorneys will add language stipulating that a contract is only binding once the buyer’s attorney has provided written confirmation of receipt of the fully counter-signed contract. This situation is rarer as it’s usually the seller who signs last and is thus the last to act. However, language that requires the buyer’s attorney to confirm receipt and thus mutual execution of the contract makes the buyer the last to act.
Difficult home buyers may request multiple viewings prior to making an offer, multiple follow-up showings during contract due diligence, plus many subsequent visits after the property is in contract. Even though a seller or listing agent should be commercial and accommodative, no one has time to show the property that many times to a buyer with obsessive compulsive disorder.
The way to deal with a difficult property buyer who requests multiple showings before an offer even has been made is to simply direct them to the next open house. You can always decline a showing request if you are unavailable at that time, perhaps because you have another appointment (or just claim that you have another appointment).
As a result, in order to save yourself time from people like this, just force them to come to your open house!
A difficult home buyer may still request to see the property multiple times after getting an accepted offer. This is a tougher situation to be in as a seller, as you do want to be accommodative and not push the buyer to back out of the deal. What you can do however is to give specific time slots and push the buyer to get everything they want to do done at one or two showings.
For example, do they want to bring in a home inspector on Tuesday and then come back on Thursday to show the property to the parents? If so, make the home inspector come together with the parents on Thursday! You have a life and a schedule, so make sure the buyer respects that. This is especially true when the buyer hasn’t signed a contract yet, as he or she could waste a bunch of your time and then simply back out.
After a contract is signed, there are only a couple of situations where you’ll have to show the property again. One is a showing for the appraiser if the buyer is financing, and the second is the final walkthrough the day before closing.
If the buyer requests frequent visits besides those standard situations, such as ad hoc requests to stop by to measure the bedroom closets or the walls again so they can brainstorm about what furniture they want to buy, push back! Remember that once a deal is in contract, the buyers are locked in, so you don’t have to worry as much about pushing them away.
You can still be nice and accommodate a viewing or two here or there, especially when you will be in the area anyway. But definitely make sure the buyer respects your schedule. Tell them when it’s convenient for you, and if that doesn’t work for them then too bad.
Negotiating after home inspection is a classic move made by difficult house buyers across the United States, and especially in states like New York where offers aren’t binding until contracts are signed.
It’s an extremely common, and also tacky tactic to make an offer with the full intention of renegotiating the deal after your home inspection. Tricky home buyers who do this will typically make an attractive offer that the seller will accept, in order to lure the seller into a false sense of security and to get them emotionally invested in the deal. If they can, they’ll try to force the seller to also stop marketing the property for weeks while they go about their due diligence and contract review.
Then, once they have their home inspection, they’ll invariably find some faults with the property and will hem and haw about proceeding with the deal. They’ll threaten to pull out of the deal unless the seller makes some dramatic concessions on price. The smart ones will try to appear honest and say they really want to do the deal, but only if the seller will agree to repair a long list of flaws found by the home inspector before closing.
Of course the seller will decline to do so, because not only is the seller not a professional contractor, but homes are typically sold as is in many states like New York. Then the difficult home buyer will pretend to think about it, and then suggest a contract price reduction in exchange for buying a house as is.
If the seller has naively stopped showing the property for weeks during all of these shenanigans, the seller may be in a dramatically weaker position because their listing’s days on market will have gone up significantly and they may have missed out on many buyers who have moved on. The seller at this point may have no choice but to negotiate a price concession with the sneaky home buyer.
Sometimes, difficult house buyers will truly want the seller to make repairs, fixes or even upgrades before closing, not as part of a negotiating ploy.
Sometimes, these difficult home buyers are simply first time home buyers who don’t understand that in most states like New York State, properties are generally sold as is. This means that sellers generally never agree to make any repairs to a property on the buyer’s behalf before closing, unless it’s a soft buyer’s market in the local real estate market and the seller is doing it out of desperation.
However, some stubborn buyers will be adamant and expect repairs and touchups to be done by the seller in a regular re-sale transaction. This is highly unusual, and only developers on new construction sales will typically agree to a punch list of fixes, done on a best efforts basis both before and after closing. However, it’s extremely irregular for a typical seller in a re-sale transaction to agree to any kind of fixes. After all, your regular Joe home seller isn’t a professional contractor or property developer, and repairs even if agreed upon can cause massive delays in closing.
Difficult home buyers will try to use the commission that the agents are making on the deal as an additional negotiating point. If a difficult buyer is unrepresented, he or she may push for a discount on the listing price because the listing agent won’t have to split commission with a buyer’s agent.
A difficult buyer may also inadvertently insult the listing agent by claiming that they’ve done all of the work themselves, and because they’ve make it so easy for the listing agent, they should get some of the commission themselves in the form of a discount.
Even worse, some difficult home buyers who are attorneys will try to claim some of the buyer’s broker’s commission for themselves, by claiming that they can act as a broker because they are an attorney.
Here’s an example of one direct buyer who tried this act with an experienced listing broker on a full service listing, and how the listing broker dealt with it:
I’m an attorney and can waive in to automatically be a real estate broker. I feel like I’ve done all of the leg work on here including finding the unit, researching comparables and making all the offers based on my own research. What is the best way forward, if I choose to go this route? At what point is the seller going to be paying me a 2.5% fee. Will they issue a check?
Alternatively, I will be happy if you as a broker can apply 1% from your commission to me as a closing cost concession. Please confirm if you can proceed with this approach instead. I believe if you take both buyer and seller commission and I’ve done all the work on my end it is fair for the 1% on this deal.
This is how the seasoned listing broker responded:
Regarding the commission, please keep in mind we’ve already reduced our commission from a standard 6% to 2.5% for dual agency, which is already heavily reduced and which is partly why the seller had more room to negotiate with you. Furthermore, Evelyn and I (especially Evelyn who has travelled to the Bronx for you) have done a lot of work getting this back on the market specifically per your request.
Regarding representation and commission, in prior opinions, the Department of State has stated that a listing broker must respect a buyer’s wishes to work with the broker of their choice. The listing broker is not, however, obligated to share the sales commission with the buyer’s broker unless, prior to the sale, the two brokers have agreed to do so.
Since you are not a REBNY member, please note that we do not have a co-brokerage agreement in place, and are not obligated to automatically co-broke, especially after representation is disclosed after an accepted offer.
Please let us know if you’d like to still proceed. We do have another showing tonight at 7pm, and are getting interest from others who have placed offers previously. Please let us know if you’d still like to do a deal, thank you!
And of course the difficult buyer backed down after having how things worked explained to him:
Great, thank you for that explanation! Agreed. I’m very appreciative of Evelyn coming out to the showing. I’m trying to make this as easy of a process for you all as well. Yes, already accepted at the price we discussed. I’ll email you my attorney’s contact soon. Please begin preparation of contract.
Difficult home buyers who have already signed up for a generous buyer closing credit (i.e. a kickback of part of the buyer agent’s commission at closing) may try to re-negotiate the amount that is kicked back after the buyer’s agent has invested a lot of time.
For example, the buyer and the seller may be $10,000 apart on price, and despite already getting the majority of the buyer agent’s commission per an agreement, the buyer pushes for their agent to absorb the $10,000 from his or her remaining commission.
As cruel as this sounds, we’ve literally seen this happen with difficult home buyers who have zero sympathy for how hard their buyer agent has already worked or any code of ethics. For example, in one particularly egregious example, a buyer threatened to fire their agent if the CEO of the brokerage did not call him immediately at 9pm. The CEO reluctantly agreed and called the difficult home buyer to see what the emergency was. It turned out the only reason for the call was to threaten to fire the brokerage if they didn’t agree to absorb a $10,000 price gap between the buyer and the seller, despite having a signed agreement at the beginning of the relationship stating that they would receive a generous 2/3 of the buyer agent’s commission. If the CEO had agreed to absorb the $10,000 price gap, in addition to giving away 2/3 of the commission, the firm would have made a mere pittance for all the anguish and time spent.
The only way to deal with these types of difficult home buyers is to ruthless apply the 80/20 rule and screen for difficult buyers and customers early on in the process. Listing brokers and sellers should also set firm rules for what kind of behavior they will accept. For example, no calls or emails after 8pm, and if a buyer doesn’t agree with that they are free to take a hike.
In this example, the buyer’s broker flatly declined the difficult home buyer’s request to absorb the hit, and the buyer ended up firing the agent. This type of time waster is something every real estate professional and seller needs to diligently screen for.
If you are a seller, make sure your listing agent knows not to trouble you with troublesome showing requests and even messages past certain times. If you run a team, you can set some ground rules and make sure the customer and agents know not to bother you at certain times.
Difficult apartment buyers are known for seeking board approval for renovations prior to having closed on an apartment. This is especially egregious when it comes to buying a coop in NYC, as it’s audacious to ask the coop board to do work and approve your plans when they haven’t even decided whether to approve you as a shareholder yet! And even if they have approved your purchase, why not just wait a few days until you close and actually own the unit before presumptuously asking them to do work?
If you encounter a difficult co-op buyer who insists on knowing whether the board will approve their renovation plans prior to closing, make sure that they understand that coop boards can reject a buyer for any reason whatsoever (as long as it’s not discriminatory, though this is impossible to prove) and does not need to disclose the reason for rejection. This means they can reject you because you were annoying or presumptuous. So tell them to calm the heck down, and wait patiently until they’ve closed before getting board approval for their alteration plans.
You’ll encounter the same thing with many difficult condo buyers who insist on the condo board signing off on their renovation plans before closing. The same logic applies, the condo board has no obligation to process alteration agreements and do work on behalf of someone who is not even an owner, yet. So don’t be egregious, calm down, and wait until you’re an owner.
We’ve seen situations where difficult investor buyers have insisted on their agents getting a unit ready to rent before they’ve even closed on their purchase. We get it, no one likes a vacant apartment and investors naturally want as short of a vacancy period as possible, but it’s completely unreasonable to demand your buyer’s agent to start marketing a property that you don’t even own yet!
For example, we’ve heard a story where a buyer was waiting to close on a new condo unit that he intended to rent out. The closing wouldn’t happen for at least a few more weeks, yet the buyer urgently demanded that his buyer’s agent start marketing the property for rent.
After his agent told him to “please keep in mind we can’t market it until you actually own the property, as you might expect,” he replied with:
Thanks for this Darren. I understand you can’t market the apartment until it’s officially mine, but there are some steps that can be done so that it can start being shown as soon as it’s purchased.
We could start by filling board petition, taking pictures, etc. I am coordinating with handy men so that the place is repainted, cleaned and ready to be rented a couple days after it’s purchased. Could we coordinate on your side so that the process moves seamlessly as well? Thanks.
It’s best to push back in these situations. It is highly unusual to allow someone to market a property that they don’t own yet, and there could be legal ramifications for doing so. Technically, a listing broker would need an exclusive listing agreement with the actual owner to market the property for rent. Furthermore, it’s unclear whether a broker would even be allowed to take photographs of a property the customer doesn’t own, and whether the broker is allowed to market the property, even if only through email.
Disclosure: Hauseit and its affiliates do not provide tax, legal, financial or accounting advice. This material has been prepared for informational purposes only, and is not intended to provide, and should not be relied on for, tax, legal, financial or accounting advice. You should consult your own tax, legal, financial and accounting advisors before engaging in any transaction. The services marketed on Hauseit.com are provided by licensed real estate brokers and other third party professional service providers. Hauseit LLC is not a licensed real estate broker nor a member of any multiple listing service (MLS).