Guide To Seattle Real Estate

So we have talked about what a BATNA is and how it relates to Real Estate from the buyers perspective, what about the seller.  This can be a touchy subject for many sellers, “Full price or nothing!” I have heard many say.  Well that would be great but it doesn’t always work that way.  Neither Sellers or Real Estate Agents get to decide at what price a home will sell for, buyers do.  Lets look at an example:

Joe and Jane have found and purchased a home closer to their preferred elementary school, Alki Elementary in West Seattle.  Their old house in the Alaska Junction is currently vacant.  Between the utility bills and their mortgage, it is costing them about $2,500 a month to keep that house warm and showable.  Currently the housing market in West Seattle is averaging about 100+ days to sell a home.  That is just over 3 months of mortgage and utilities.

Their house in the Alaska Junction is comparable to other homes that have sold for 500k.  They set their listing price at 500k. They have a little savings and could, worse case scenario, keep both houses for six months tops. They could sell their home for as low as 470k to cover mortgages and selling costs. What is their BATNA?  Well they have to sell within 6 months or risk losing out entirely.   Every month they wait, they spend another $2,500.  When there first offer comes in at 30 days their BATNA is: 5 months * $2,500 + 470k = 482.5k

In other words, if someone offered 480k they would be better off waiting for another offer rather than settling for this one.  Of course this is not taking in to consideration a changing market, that is another topic all together. But as time passes their BATNA changes.  Their reserves dwindle, and their motivation to sell increases.  At 90 days their BATNA is: 3 months * $2,500 + 470k = 477.5k.

Wait a minute if they would have accepted the original offer at 480k they would have been better off right?  Yes, they would have.  But they would have lost the opportunity to receive an offer of 490k or even a full price 500k offer.  Not everyone has the stomach for negotiating when this much is at stake.  That is why it is so very important that you choose a Real Estate Agent whom you are comfortable with and has the negotiating experience to guide you through this process.