In instances where the seller’s expectations and the buyer’s budget seem worlds apart, creative deal structuring can be the key to breaking through the impasse. Traditional real estate transactions often leave little room for manoeuvring.
Once a seller commits to a buyer, they are legally bound if things are done correctly, preventing them from accepting a potentially more lucrative offer that might come their way.
Sometimes a more flexible deal structure might offer a path forward. Imagine, for example, that you’re determined to secure a property that perfectly aligns with your needs. It is worth $1,200,000. Consider making a slightly higher offer, perhaps $1,225,000. The catch, however, is that you’d grant the seller a 60-day window to continue shopping the house around. Should they happen upon a superior offer during this time, they would have the option to exit the deal, albeit with a mutually agreed upon breakup fee, let’s say $25,000 or even less.
This strategic approach to real estate negotiations is rooted in the divergence of opinions about the value of a property. Essentially, it sends a clear message to the seller: “While you may believe your house is worth $1,200,000, I firmly believe that you won’t find a better offer than my $1,225,000. I’m so confident in my assessment that I’m willing to provide you with 60 days to prove me wrong. If you do manage to secure a better deal, I’ll continue my search for the perfect house. However, if you don’t find a superior offer, we’ll proceed with the agreed terms and close the deal in 60 days at my price.”
In this way, a flexible deal structure injects an element of fairness and reason into what might have been an insurmountable impasse, allowing both parties to bridge the gap between their expectations.
Master negotiation is the difference between winning or losing a property… there is no prize for second!
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