Hacker News Reader

Comment by t_mann | Hacker News Reader

People seem to forget about that. As a seller, a smooth transaction is far more valuable to you than a .3% price difference (and troubles can get way more uncomfortable than just a delay; you don't want some three-letter agency come knocking at your door asking questions about your buyer or where their money came from). Just to be clear, if you're not going for the best offer for discriminatory reasons that's definitely not ok (morally and might also get you into legal trouble), but AML or financing concerns are very valid reasons.

View on HN

When we sold our house ~6 months ago we had about 7 offers and we took a solid, but middle of the pack offer in terms of price. Their offer also had strong pre-approval and financial info and they were the fastest to respond when the house went on the market. This showed us they wanted our house in particular more than the other bidders, especially considering the pre-approval for their loan and their other financial details. They were still stretching a bit to buy the house, but they came through and closed in like 3.5 weeks on a jumbo loan. Did we leave a few dollars on the table? Probably. Were we happy with the outcome, yep :)

I used to negotiate really hard. Barely left a drop for the other side.

It's a losing strategy.

I found I was much better off if I could give the other side real wins.

Especially in repeated games.

Game theory says you are leaving something on the table when you do that. But we are all humans first and optimized game theory machines second :)

Game theory for repeated games actually says you want to seem like a fair or generous player so that the other side doesn't defect and keeps wanting to play the game with you.

Single-round best strategy is squeeze and defect.

Game theory is great for zero-sum situations. Most negotiations are not.

What do you think negotiation is?

Good negotiators find trades that are valuable for both sides of the table. That's how you negotiate well.

> ...you don't want some three-letter agency come knocking at your door asking questions about your buyer or where their money came from...

That does not sound realistic for a normal-homeowner U.S. real estate sale. There are generally two Realtors and a title company as professional intermediates in the transaction. The seller may only know the buyer's name if the seller spends time reading routine paperwork - which those intermediates create and handle. Why would the XYZ agents visit the seller - when the buyer's Realtor, buyer's bank, and title company have so much more information, insight, and experience on the matter?

I know a guy who backed out of a real estate deal that he'd really wanted for that reason (AML). He's a banker himself, maybe that's why he was a bit more on the edge wrt AML, but his attorney also recommended it. That was a normal (ok, nice) one-family home in an affluent suburban area, not a rock star villa in Beverley Hills.

He backed out as seller (the grandparent post's concern - "knocking on your door", post-closing), or buyer?

I can see it as buyer (you want a house, not a title insurance claim). But as seller...even having your own atty. involved seems pretty odd. It's the job of the Realtors, title company, and bank(s) to judge the buyer's money, and call it good or bad.

(Or did someone offer to buy your acquaintance's house, with no intermediaries, for a briefcase full of cash? That raises enough red flags that you could host a birthday party for Karl Marx.)

Apparently it’s normal to have an attorney when buying or selling real estate in New York. I found this pretty surprising, because in California the contract is a generic form where you literally just check the applicable boxes and write in numbers.

Another tidbit: in NYC, most people use an agent when they rent an apartment. They charge one month’s rent.

I’ve always had an attorney represent me for RE transactions, not in NY, though. It’s usually a couple hundred bucks and each time easily saved us money.

Absolutely, you can bid lower if you add "cash in your account tomorrow". People are risk adverse, they want a solid offer that closes immediately.

Reply on news.ycombinator.com