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Americans and most westerners are often at a disadvantage when it comes to negotiating when they go abroad - which is the other side of the coin.
Haggling is common when one buys things in some countries and there is an art involved in doing it the right way including countering with your first offer. When we were in China a couple of years ago we went to a place where one was expected to haggle. With us were a couple who lived in India and who really knew how to negotiate. We ended up buying an American Tourister suitcase for a fraction of what we would have paid here - thanks to our friends who took over the negotiating. Their first offer for the suitcase was about 20% of what the vendor asked - I was almost embarrassed by their counter but I kept quiet. They went back and forth and we ended up buying the suitcase for about 35% of what the vendor wanted.
As we left, we saw a tourist from Europe with the very same suitcase which he told us he bought at the same store. He said he got a real bargain and when I asked him what he paid it turned out that he offered more than two times the price we paid. He asked me what I paid and I did not have the heart to tell him that he had been taken and so I said that I paid about the same.
I can understand where he came from: in the West it is just not the norm to offer a fraction of the price for something even when there is haggling allowed.
A real estate transaction is merely an extension of the same process. What may seem like an outrageous counter may not have any significance to someone who comes from a culture where bargaining is part of the process of negotiating.
Remember not so long ago it was considered unheard of to negotiate a realtor's commission - and an agent would likely take offense at a seller who did so. Today it is the norm.
Before I retired, I was involved in negotiating acquisitions for the company where I worked. The one thing I learned is that the ultimate negotiating leverage that both sides have is to walk away from the transaction. More important than actually walking away is the belief by the other side that you are willing to walk away.
I think people from other cultures need to be schooled in how to buy a home in the US.
Why should we conform to their way of being when they are trying to buy a home in the US?
If I went to their country, I'd abid by their rules.
We had someone try to pull this on us. We had a very desirable home, had the best view in the city,
Best neighborhood. We had a current appraisal. They placed an offer, $500,000 under the appraisal. I told my agent no way was I countering. Go away. They came back offering full price. Husband and I had been looking and found nothing we liked so we pulled it off the market.
I'm betting they didn't try to pull that again. 6 years later we sold it at the peak of the market and made a profit into 7 figures.
Americans and most westerners are often at a disadvantage when it comes to negotiating when they go abroad - which is the other side of the coin.
Haggling is common when one buys things in some countries and there is an art involved in doing it the right way including countering with your first offer. When we were in China a couple of years ago we went to a place where one was expected to haggle. With us were a couple who lived in India and who really knew how to negotiate. We ended up buying an American Tourister suitcase for a fraction of what we would have paid here - thanks to our friends who took over the negotiating. Their first offer for the suitcase was about 20% of what the vendor asked - I was almost embarrassed by their counter but I kept quiet. They went back and forth and we ended up buying the suitcase for about 35% of what the vendor wanted.
As we left, we saw a tourist from Europe with the very same suitcase which he told us he bought at the same store. He said he got a real bargain and when I asked him what he paid it turned out that he offered more than two times the price we paid. He asked me what I paid and I did not have the heart to tell him that he had been taken and so I said that I paid about the same.
I can understand where he came from: in the West it is just not the norm to offer a fraction of the price for something even when there is haggling allowed.
A real estate transaction is merely an extension of the same process. What may seem like an outrageous counter may not have any significance to someone who comes from a culture where bargaining is part of the process of negotiating.
Remember not so long ago it was considered unheard of to negotiate a realtor's commission - and an agent would likely take offense at a seller who did so. Today it is the norm.
Before I retired, I was involved in negotiating acquisitions for the company where I worked. The one thing I learned is that the ultimate negotiating leverage that both sides have is to walk away from the transaction. More important than actually walking away is the belief by the other side that you are willing to walk away.
So true. I was in a similar situation in Mexico. We paid $40 in town for a blanket we saw was $10 at the airport when leaving.
I knew I could haggle but I didn't want to offend the man in his own country and possibly risk my life if the cartel gets called (lol. Over dramatic, I know).
Last house I sold, buyer balked literally day of closing. No surprise given all his other actions but then I had no other offers after sixty days or so. I dropped another 5K off the price immediately and the deal closed. Not for a second do I care. I owned something I did not want. Buyer had the aces and I had deuces. Stuff happens.
It is amazing how attached we can become to an object and how we can take things personally. It is a thing. That is all it is.
I think people from other cultures need to be schooled in how to buy a home in the US.
Why should we conform to their way of being when they are trying to buy a home in the US?
If I went to their country, I'd abid by their rules.
We had someone try to pull this on us. We had a very desirable home, had the best view in the city,
Best neighborhood. We had a current appraisal. They placed an offer, $500,000 under the appraisal. I told my agent no way was I countering. Go away. They came back offering full price. Husband and I had been looking and found nothing we liked so we pulled it off the market.
I'm betting they didn't try to pull that again. 6 years later we sold it at the peak of the market and made a profit into 7 figures.
A!though you may not have realized it you actually negotiated by not countering. As it turned out you decided not to sell but if you wanted to sell you would have got close to list.
Believe me, if the CFPB had their way, Realtor commissions would be under their purview, just as loan officers currently are supervised. Anybody noticing how licensing info is on every CD?? Not only are loan officers being tracked, but so are agents. This is going to be an eye-opener in 5-10 years when they start publishing agents with high foreclosure rates (and of course, CFPB will determine what is high). Or, what loan officers had delinquencies in the first 5 years of a mortgage. But you better believe they won't track who had the highest early payoff rate, or, whose clients turned the best profits.....no, only the horrible, the bad news, will be tracked. They won't be happy until every nickel is under control, forget about family discounts. I promise you, if Ms Warren gets in a power position, there's no way NAR and their lobbyists can fend her off.
Actually, it does matter. So, we have many nationalities in my area that are "haggling cultures." It is VERY much a part of some cultures to haggle and continue to haggle over things. It isn't racist to acknowledge that how they conduct transactions is different than the US. We have lots of Russians and Ukrainians in my area and they really haggle. It isn't just Middle Eastern, Indian, and Asian cultures.
I always tell my clients that when dealing with certain nationalities that if they aren't used to the American system expect really low offers and lots of back and forth. I think it is very important to prepare sellers that aren't used to negotiating with some people from other cultures about what to expect so that they don't get all emotional and offended. It makes the transaction go much smoother if they just understand that is how their culture works.
In this case, the OP was offended by a lowball offer, but if the agent had said, "We have an investor AND someone from a culture that haggles, so expect a lot of back and forth." Maybe the OP wouldn't have seen it as an offensive offer and started the negotiation down an emotional path where it didn't need to go.
There is a sizable Asian population north and south of us. I posted a lens for sale on Craigslist. Price was firm and non-negotiable. First to call was someone whose English was well-spoken but with a decided acccent. I reiterated that the price was $1000 firm. He understood. We met in a parking lot and he was driving a Lexus while I drive an older Tacoma. His entire family emerged to check out the lens. They were East Indian or Pakistani. I had a written statement from a local camera shop plus copies of similar lenses for sale on line in similar condition. He offered me $800. I took my lens and walked off. Later I did sell it for my asking price. Proud of myself because we needed the money.
It is very clear that the OP thinks the negotiations was due to the couple being of a certain ethnic group.
I was an investment property broker from 1972 till I finally retired. I lived in a very white ethnic area, and dealt with upper middle and higher economic white ethnic group. When you look at how two of three homes like yours had sold for less than yours did, the buyer was not negotiating very hard, nor were they unreasonable.
Actually when buying an investment house, I would have negotiated a considerably lower price than your buyer did. If you did not take the offer, then we would walk away. When you are buying investment property it has to pencil out as an investment to make sense. The most homes I sold to investors in one day was 14. Thirteen were in a to be built 13 unit subdivision, and one other excellent buy home. As they were in the right price range to buy as investments to hold, I was able to sell 2 to 5 homes to an investor, and sold all of them in 2 hours on the telephone.
From what you have posted, your buyers being investors were quite generous on what they would pay. I hope you do not wish you had taken their offer later, and end up selling for less which a lot of sellers have done over the years.
I agree 100% with Silverfall. I work heavily with the international community and great care is taken to understand various cultures and their approaches to money and negotiations. I immediately understood the point the OP was making and in no way understood the comments as derogatory. If you don't understand, insulting a buyer is easy to do, unintentionally. As a banker, it gets a bit tricky, because I have to treat the Asian buyer the same as the Hispanic buyer. But how we get to our final price (rate) ca be totally different. We even have sub cultures within the US on our attitude towards money.
HUD gave a huge nod to the immigrant community when they acknowledged "mattress money" and the general distrust of banks. We even have holdover, US Citizens that don't trust banks, but many from outside the US have seen funds seized by the government and will never put their savings in banks. Or, what about the culture where it is considered crass to show ALL of your available assets? Or, pooled assets? In countries on the African continent, families throw their money into the same pot and take turns using funds. Or....the Hispanic buyers that do not trust auto deposit for their paychecks. Every Friday, they will go to the bank and stand in line to deposit their checks. If they miss a Friday, the next week, or three weeks later, all of the paychecks go in. But it's the visual of seeing the deposit that puts them at ease. But if I am trying to track pay, it can be a nightmare.
Some of my hardest learned lessons have been from those not taught about different cultures. Slowly, we are peeling back the differences. Only as we acknowledge variations in our approach towards money and negotiations, the international gap shrinks.
Is there a purpose in your recitation of ethnic generalities and stereotyping? Why should you not treat an Asian customer the same as an Hispanic one? Why should you not treat all customers as individuals rather than attempting to pigeonhole them into a predetermined category?
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