The waiting game

With a shortage of homes for sale, it’s not uncommon for sellers to quickly field several offers.

“We find that as more offers roll in, our sellers become more optimistic and ask how we can push the offer prices up higher,” notes Jeff Miller, co-founder of the AE Home Group.

That said, curb your enthusiasm, suggests a study in the Journal of Applied Psychology.

When negotiating, if someone feels he’s “winning” (thinking a buyer will agree to a higher price, for instance), he becomes overconfident, explains William Becker, Virginia Tech associate professor and the study co-author.

“If he then moves on to another party, thinking ‘I’m a great negotiator,’ he doesn’t prepare enough or do well,” Becker says.

It’s common, says Miller, for a seller’s agent to set a deadline for all buyers to submit their best offers. Then, the agent may sit down with the seller and call each party, asking for concessions.

If the agent feels he’s successful and conveys that to the seller, either the agent or seller may be overconfident when they move on to the next negotiation, insist on inflated concessions and chase away what might have been the best deal.

Buyers, who are more likely to negotiate with one party at a time, don’t run this risk, Becker says.

Miller says he’s found a solution whereby when he’s the seller’s agent: He first tries to discern the actual strength of each offer by calling the buyer’s agent and probing for details.

“If there’s an inspection contingency, I ask, ‘What are they worried about?’ and if it’s something big, like a roof, I know there could be problems. I also ask to call the buyer’s lender,” Miller adds. “The lender can’t tell me anything specific, but can say that the financing is solid or shaky.”

Then, he presents what he believes is the best offer to the seller, and urges negotiating with that party first — and perhaps only.

If sellers want to consider other offers, suggests Becker, taking a break of a day is optimal, but even a half-hour may help.