Real estate haggling, back and better than ever

Haggling could be described as the art of getting the most for the least. Sometimes it’s a gentle process, other times it can be brutal and ugly.

Some buyers and sellers thrive on haggling while others would rather entirely avoid the process. Yet for East End real estate agents, it is a necessary evil in an ongoing saga of price negotiating.

“That’s the way it is,” said agent Veronica Kaasik of MVM Island Realty of Shelter Island during a recent telephone interview. “It’s always been a part of the process. Haggling’s always been in vogue it just depends on whether it’s a buyer’s or seller’s market.”

During the previous seller’s market, Ms. Kaasik recalled that those selling homes frequently did not hesitate to list a high price for their property and often refused to entertain lower offers. Today, the tables have turned in most cases. Now buyers feel free to offer the price that works for them as many properties remain on the market longer than they may have in the past.

“Haggling as in negotiating for real estate has been ‘in’ since the beginning of time,” wrote Diane Saatchi, senior vice president and broker for Corcoran Group Real Estate of Southampton during an e-mail interview. “There was a brief period, known by brokers as ‘the good old days’ when buyers had to act quickly and at full price or they would miss a property. That was a relatively short time at the height of the bull market. Currently the vogue is to bid on properties because of the amount of perceived discount rather than the property’s suitability. The success in haggling is the goal, not the acquisition of a desired home.”

The question begs to be asked, is haggling confined to any particular socio-economic group or is it an across-the-board all-American phenomenon?

“I don’t think it is patriotic. Not to try for the best deal for oneself is foolish,” wrote Ms. Saatchi. “The ultra-rich always question a price. In my experience, the poorer folks are less nimble at haggling.”

Would-be hagglers should have a goal in mind as the idea is not to haggle for haggling’s sake, said Ms. Kaasik, but instead to emerge from the negotiations victorious. “It’s to get your desired price whether you’re the buyer or seller.”

“Haggling is here and more in fashion than ever,” wrote Richard Laermer, author of Bargain Hunting in Greater New York and former Southampton resident. “The fact is no one likes to think they’re being taken advantage of and in a recession one is less likely to be told ‘you’re kidding’ when you haggle, even in the highest-priced places. Folks want more than ever to be ‘in’ when they shop. It’s more fashionable than ever to show off a price you got for something. In the ’90s it was, for a lot of us, the other way around. Those days are way gone,” he wrote during an e-mail exchange.

Stressful economic times may be affecting how individuals treat their money. Consider that the 2009 Consumer Confidence Survey from insurance and financial giant Allianz found little assurance among Americans about the economy, which may well be impacting investment strategies.

Approximately one of every two survey respondents said they planned to keep a greater amount of cash reserves in bank accounts over the next 12 months. And 83 percent of respondents said they were “very concerned” about the overall U.S. and global economy with 43 percent noting that they were “very concerned” about their personal financial situation.

But according to a statement issued by Multiple Listing Service of Long Island Chief Executive Officer Joseph E. Mottola, the number of contracted residential sales for July 2009 in Suffolk, Nassau and Queens Counties was 3,029 compared to 2,692 a year ago. In the statement, Mr. Mottola wrote that he expects Long Island real estate sales to begin percolating once again.

“As the economy begins to stabilize, consumer confidence will continue to improve and many more buyers will be finally committing and taking advantage of the favorable real estate conditions,” he wrote. “Tax incentives for first time home buyers, the great selection of homes to choose from and affordable prices are making it a positive time to buy.”

Yet, in spite of the uptick in units sold, the median Long Island home price of $375,000 represents an 11-percent decrease from the $421,000 median price reported in July 2008. So it seems that haggling is a bigger factor than ever in this weakened economy.

“It’s my belief that despite the improvement in residential housing, Long Island may be just catching up to the lagging national economy,” said Nottinghill Capital Management financial advisor Richard Landsman during a recent telephone interview.

When it comes to haggling, before you decide to jump in both feet first, there are a couple of things to keep in mind.

The value of property, no matter where it’s located, depends on several key issues. Working with an agent who understands your goals can help.

If you’re planning to buy property today and sell it in five or 10 years, it can then pay to consider what might happen down the road when it comes time to sell. Keep in mind questions like: Is the property in the best possible location to achieve your goal? What were the sales figures from the past six months for comparable properties? What’s been languishing on the market?

Other points to consider: Does the property need a lot of expensive renovation? What are the taxes and insurance? Can you make the down payment? Is it near local amenities such as a beach or is it within walking distance to the village or train station?

Next, be aware of the local inventory. While the more homes for sale in a particular area generally favor the buyer, if your heart is set on a certain property or location you may not be able to haggle the owner down in any significant degree.

What should one do when haggling heats up to intense levels between buyer and seller? Is there a proper haggling etiquette?

“Etiquette and haggling is an oxymoron,” said Ms. Saatchi. “That’s why it’s best to have a broker in the middle to filter out impolite sentiments.”

But is it possible to have gone too far with haggling?
“No one knows they have gone too far until they do,” added Ms. Saatchi. “In a buyer’s market, the buyers keep pushing until the seller says ‘that’s it, take it or leave it.’ The reverse was true when it was a seller’s market.”

While no one wants to overpay, there can be another big downside to haggling. Time spent arguing over price can cost one an opportunity. The longer haggling continues between buyer and seller, the greater the opportunity for another buyer to step in and scoop up the deal.

Joseph Finora Jr. is the author of “Recession Marketing.” Contact him at jfinora@optonline.net.