Response Etiquette
By Jim Palmer Jr.

Even in a strong sellers market some buyers make crazy offers as if they have the power in the market. When that happens, most sellers have the tendency to be offended and respond in a very negative way, if at all. Both players in this scenario could use some negotiation lessons! Some buyers won’t play if they don’t win and in this current sellers market they mostly lose when they use that tactic. On the other hand, sellers can be just as difficult when they stick to their guns and refuse to negotiate even a little. In a true compromise (which is negotiation at its best), both may not get everything they want, but they both win.

It is difficult to separate the emotion from the logical thought process when you are the seller. Research shows that people truly believe a property is worth more if they are selling it and less if they are the buyer. In other words, the pleasure of gaining something seems smaller than the displeasure of losing the exact same thing. Once you’ve owned something its value increases and deep in the hearts of the seller, they really believe the house they own is worth far more than the buyer is willing to pay. In psychology, this is called The Endowment Effect.

Sometimes brokers enable sellers who have a bad case of the Endowment Effect when they use bad etiquette in responding to offers the seller thinks are ridiculous. Experienced negotiators would be wise to help the seller rein in such emotions and should always respond somehow and never flat out reject an offer.  Even when the buyer seems to be on a fishing trip (for deals) the seller should always respond reasonably. That way at least both buyer and seller know what each other’s stance is and if either one later rekindles interest they at least have a starting point.

Instead of a flat out rejection, a listing broker could respond in one of several ways by writing on the face of the offer and sending it back to the buyer’s broker. ”Thank you for your offer, it is not acceptable at this time.” Or, “Offer reviewed but not accepted.” That way the buyer’s broker is not left wondering whether or not their offer ever got presented. Even a firm “Rejected” message is preferable to no response at all.