Brooklyn Secret Agent: Bowlful of Goodwill

Today we bring you the fifth of an anonymous weekly column about real estate by one of the most experienced agents in Brooklyn:
In this business,  it is always a magical moment when you realize that a buyer has decided that they would love to be the next owner of a house/apartment, and the seller is truly ready to sell. Before the negotiations begin, there exists what I envision as a big bowlful of goodwill. As negotiations commence, and proceed, the goodwill gets used up, often unnecessarily. Sometimes the bowl is emptied completely and that’s when I know a deal is dead.

Let’s say the property is fairly priced, but the buyer opens the negotiations by offering far less — say, 15 percent under. That buyer just scooped out a great big handful of goodwill and threw it away. Perhaps the seller then refuses to counter — another handful gone. Once a price has finally been agreed upon, the bowl is half empty.

Why does it matter? Because more hurdles are ahead. One or both of the attorneys will be slow, or even make a contract mistake, causing accusations to fly about “not showing good faith.” The inspection will turn up some minor issues (it always does) and if the bowl is still fairly full the buyer might just accept them as what you get when you buy property in an historic neighborhood. If goodwill has been squandered, bitter fighting will ensue.

We may have a signed contract now, but there’s more.  The buyer wants to bring in contractors and/or architects to plan renovations (which the seller probably finds offensive).   There’s no reason not to allow some planning visits, but now we are scraping the bottom of the bowl. The request might be refused. Lastly we have the final walk through before the closing. If the bowl is empty, the buyer will find a cellar full of junk which the seller claims came with the house. Or, worse, the chandelier is gone.

These deals usually do get to closing, but with so much ill will that both sides feel abused. As brokers, our hearts sink when we see one side or the other needlessly using up the good will. It is a finite resource. We do our best to advise and cajole, knowing that trouble always comes to visit every deal at some point and that our buyer and/or seller will need a reserve of good will. We have seen this movie before. Happily, most clients take our advice. However, those that proceed in the other direction often find themselves staring at the bottom of the bowl, wondering what happened.