Time to Play Hardball?
A quick word first1
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The votes are in
Two weeks ago I put up a post about a negotiation problem that my friend Jack faced when he was selling his house some years ago.
Jack had listed the place with the biggest real estate firm in the town. Its owner, call her Beth Johnson, put her “best broker,” Chris, on the job. Chris inspected Jack’s home and recommended an ambitious price, which Jack agreed to.
Two weeks later, though, Beth informed him that Chris wanted to buy the place, but at 18 percent less than the price Chris had just set. I posed three options for Jazz readers to choose from had they been in his shoes. (Thanks to everyone for responding!)
Here’s how the votes split:
10% chose #1: “This is unprofessional. I’d fire Beth and Chris and find another real estate company.”
47% picked #2: “Yes, it’s unprofessional, but I knew that the asking price was just a starting point. I wouldn't let my anger get the better of me. I'd negotiate and see if I can get Chris to improve the offer.”
43% went with #3: “I wouldn’t do either Option 1 or Option 2.” (Those who chose this explained what they’d do instead, and why itt’s the better path.)
As you can see, relatively few would give Beth and Chris the boot and turn to another firm for a fresh start. Arndt Nicklish was in this group, though he wanted more details. “Did Chris plan this from the beginning, or was there a serious effort to find a buyer before that?” Arndt also wondered if Chris wanted to live in Jack’s place or just flip the property.
A larger group of readers, almost half, said that they’d negotiate with Chris and try to get a better offer. Most of these people didn’t like Beth and Chris’s behavior but wouldn’t rule out a deal if the price were right.
In the third group (“do something else”), Nicole Davidson said she wouldn’t get pressured into making a deal too quickly. She’d get opinions from other brokers about the property’s true value. She also said she’d use carrots and sticks. “I would make as part of the deal that there is no commission payable—a significant savings to me and perhaps offer a testimonial (create additional value for them).”
James Followell focused on both what he would say and how he’d say it. He’d tell Chris, “I don’t know how we are supposed to accept that low of an offer.” James added, “My strategy is to use ‘how’ instead of ‘no.’” His language tweak squares with Chris Voss’s advice in Never Split the Difference. Asking “why-are-you” questions, invites people to lock themselves into their own position. By contrast, asking “how-am-I” questions puts the other party in your shoes.
An anonymous reader took a tougher stance. “You have the upper hand, so use it!” That person added, “Counter with 5% above the asking price and then add that you’ll only pay half of the standard commission.” (The implicit rule here might be, “don’t counter a ridiculous offer with a reasonable demand.”)
Interesting to see that the great majority of responders felt it worthwhile to explore the possibility of making a deal, in spite of the conduct of the brokers. Interesting, as well, to see how those people varied in how willing they were to take a hard line.
Jack’s power play
When Beth informed Jack about Chris’s offer, he just stared back at her. When Beth started to talk about finding a mutually acceptable number, Jack held up his hand like a traffic cop. He was silent a moment longer, then he said:
“One of two things is going to happen here. Option A: I’m going to tear up my contract with you because you breached it. I’ll get another broker who’ll be on my side. And I’m going to share this story with everyone I know.
Jack paused again and let Beth sit with that. Then he continued, “Here’s Option B: Chris buys this house at the asking price you two set. And I don’t pay any commission.”
With no hesitation, Beth said, “Deal!”
Jack led with Option A, the threat that he would bad-mouth Beth’s firm to any and all. He didn’t hedge or say that he might do that. He said flat out, that’s what was going to happen.
He followed that with his demand, Option B, the full asking price (an ambitious number) and no commission.
That may have been a tough pill for Beth to swallow, but much better than the prior alternative. She snapped it up. I’d call that classic hardball on Jack’s part. All stick and no carrot.
Would you do that? Could you?
It worked for Jack, but I imagine some people might hesitate about coming in so heavy. That’s not my style generally, but I think I’d do that here. Beth had claimed that she couldn’t stop Chris, her own employee, from making a low-ball offer (or making any offer at all). That’s ridiculous. Of course, she could. And it makes me wonder, just as Arndt did above, whether this was planned from the start.
Still I can imagine that it would be hard for others to pull off this move. And there could be a risk in trying it. Jack is a successful guy (just as Beth was a successful broker). But what if the genders were reversed, and it was a woman—call her Jackie—who was the homeowner, and the broker was named Ben?
It’s unfair, but women can pay a price for being assertive even when (as here) they have every right to be. And, depending on his nature, a guy might have a tough time backing down in the face of a challenge from a woman, even when doing so would be the smart thing to do.
To be clear, I understand that not all women are the same, nor are all men. Far from it. There’s enormous variation in both groups. When it comes down to specific transactions, much depends on the bargaining styles, personalities, and values of the individuals. But it would be a mistake to ignore the reality of social norms and roles.
Looking forward to your comments here!
Housekeeping
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Photo by Thomas Park on Unsplash
When someone agrees immediately to a proposal of mine, I always think "Damn! I missed something important. I didn't do my homeworks correctly!". Beth agreeing with no hesitation means Jack could possibly get more. That's why I agree with Nicole Davidson's comment: there's no need to rush to make a deal.
This is not a post to judge Jack's behavior. I just want to tell that with the information I know, I'd move differently. Maybe Jack knows something not explicitated in the story (as an example, he could know the asking price is absolutely out of market) that makes perfectly reasonable for him to make that offer.