Successfully negotiating a real estate transaction is all about exerting pressure and influencing the other side. If you aren’t doing this you aren’t negotiating the best deal possible.
When a buyer makes a crappy offer, you’re making it easy for the seller to not respond or to simply say ‘no’. The same holds true for the seller. If the sellers response isn’t realistic they aren’t negotiating because they have taken the pressure off of the buyer. They don’t have a strategy and are just playing the game with no direction. The other side isn’t stressed about the deal falling apart. Here is a good story to illustrate this point:
I had a home for sale at $299,000. The comps for the area are in the low $300’s, so it was value priced. It was owned by an investor who paid cash for the home and their goal was to sell it for $290,000. It was on the market for four days and already receiving a fair number of showings. A buyer makes an offer for $269,000 and the seller doesn’t even respond. The buyer makes another offer for $279,000. Note to buyers, when you make two offers in a row and the seller has made no counters, you’re negotiating with yourself. The seller’s first counter is for $297,000 and eventually they settle for $295,000, which is $5,000 higher than sellers bottom line. This buyer did nothing to exert any pressure and, if anything, just pissed the seller off so they became more entrenched. If the buyer had made an offer of $288,000 at first and didn’t move at all they might have seen the seller feeling the pressure. At that price the seller would have to wonder about blowing the sale for a $2,000 difference. The bottom line may have moved a little.
You get the best deal when the other side is saying “Not exactly what I wanted but…” When you are exerting pressure you influence them to stretch to your number and feel pressure about missing out over the difference.