Pulling a real estate hard ball: Standing firm against even the most heavy-handed tactics

Note: A version of this article was originally published in the Los Altos Town Crier on October 29, 2024.

Image credit: https://unsplash.com/@bmowinkel

Realtors often celebrate their successes – highlighting the number of homes they’ve sold or touting their total sales volume with statements like, “Last year, I sold over a billion dollars of real estate.” But behind those numbers are the deals that nearly fell apart or, sometimes, do. These are the stories we don’t hear about as often, but they’re just as crucial to understanding the realities of the business.

Recently, I had one of those close calls.

It was a single-family home in Los Altos where I represented the seller, and while we did successfully close the deal, the experience was a reminder that even after two decades in real estate, there are always unexpected challenges. The twists and turns of this particular transaction could have easily derailed any agent, no matter how seasoned. That’s why I’ve since used this as a case study for the newer agents at our brokerage – it’s not always about the easy wins, but about how you navigate the obstacles that almost stop you in your tracks.

At the heart of the challenge was the other side’s lack of communication. Best practice is for Realtors to keep each other informed at every step, as transparency builds the trust needed to close a deal. Trust isn’t just a feel-good concept; it’s essential when deals get complex. When a Realtor is upfront from the start, you can rely on them to collaborate when issues arise – a mindset not all agents share.

Without notifying me, the buyer’s agent arranged for a foundation inspection, even though the original reports showed no issues, and the buyer hadn’t raised any concerns about the foundation. Given the home’s condition and the thoroughness of the initial inspections, this extra step seemed unnecessary. Typically, any foundation problems would have been flagged in the first round of inspections. This unexpected inspection felt more like a tactic than a legitimate concern, raising red flags about the true intentions behind it.

While buyers have the right to inspect the property, failing to communicate about this additional inspection felt like a breach of professional courtesy. To maintain transparency and full disclosure, every inspection report generated on a property must be disclosed to all parties, and if this buyer had decided to walk away from the deal, the seller would still be obligated to share all reports with future interested parties. Open communication is critical in these situations to ensure transparency and trust between all parties involved.

This raised red flags for me.

Afterward, I advised our agents at Rainmaker: “Once a house is under contract, switch out the Realtor lockbox for a combo lock so you retain control over who enters the property.” Typically, I would have done this, but it goes to show – even seasoned agents can get caught off guard.

After the surprise foundation inspection, the buyer’s agent then requested a price reduction based on the results. To be clear, the initial inspection we provided revealed no real issues, but the buyer’s agent hired a contractor who estimated foundation work totaling tens of thousands of dollars. What’s more, the buyer’s Realtor later admitted that the first inspector wasn’t reliable, so they brought in a second inspector – again, without notifying me. The second inspection didn’t uncover any significant new issues either, but that didn’t stop the buyer’s agent from making another attempt at a price reduction.

By this point, the pattern of behavior had become apparent. What’s really going on in situations like this? In my experience, a request for a price reduction often signals early-stage buyer’s remorse. Maybe the buyer feels they’re overpaying, or the agent wants to impress their client by negotiating a better deal. Sometimes it’s just about ego – agents trying to show they can “win” for their clients. Whatever the motive, it was my job as the seller’s realtor to discern between these kinds of tactics and a legitimately actionable issue; in short, this was something we were not going to negotiate on.

The undisclosed inspections, the unreliable first foundation inspector, and the second attempt to lower the price began to feel manipulative.

We decided to play hardball, standing firm on the terms of the contract that both parties agreed to at the outset.

The sellers had every right to keep the buyer’s earnest money if they decided to walk away. Had the other agent been more transparent and cooperative from the start, sellers might have been open to negotiating. But bullying is never a good strategy – whether it’s on the school playground or in real estate.

In the end, we stood firm on the original terms, knowing that the buyer’s attempts to renegotiate were likely driven by other motivations rather than any real issues with the property. While these tactics may be common in real estate, it’s essential to recognize when they’re being used and respond accordingly. This experience reinforced the importance of transparency, communication, and holding the line when necessary. By staying true to these principles, we ensured a successful outcome, reminding us that in real estate, it’s not just about closing the deal – it’s about doing it the right way.