My daily work involves handling various real estate transactions, including residential sales, commercial asset leasing and sales, and land development. For over ten years, I have frequently represented buyers, sellers, landlords, and tenants. I have observed many psychological games in real estate transactions and would like to share some insights.
Although different real estate transactions require different approaches, clients generally consult a lawyer at two stages:
- The first stage is when the client has already signed a contract or a preliminary agreement, and the lawyer’s main job is to facilitate the conveyancing process. These clients usually don’t think too much about the transaction (since the contract is already signed); they just want to complete the sale or purchase.
- The second type of client seeks legal advice before deciding whether to sign a contract. In this case, the lawyer’s role is crucial because it involves understanding the client’s goals, not just procedural handling. Understanding the psychology of both parties is vital at this stage.
Clients (if they are buyers) naturally want the lowest price and the best conditional contract (in the case of residential property), such as subject to finance, building and pest inspections, and due diligence, with ample time to decide on completion. But will the seller agree to these terms?
Conversely, sellers want the highest price and an unconditional contract. However, can every property demand these terms, and will buyers agree?
Every real estate transaction is a psychological and timing game. Offer too low, and you won’t succeed; ask too high, and you won’t sell; delay too long, and you give the opportunity to someone else. Lawyers must strive to maximize the client’s benefits while understanding the psychology of the transaction.
Although this may seem like common sense, I hope these small insights will help you in your next real estate transaction.
