Business Negotiation February 10, 2014

The Phony Acceptance Stall in Real Estate Negotiations

The “phony acceptance” is an unethical selling tactic. It is most prevalent in real estate, but it is also common in the sale of used equipment, antiques or other hard to find goods and services. Unscrupulous sellers use the phony acceptance this way.

A woman sees a house she likes. After considerable negotiating, she submits an offer of $240,000 against the original asking price of $270,000. The broker takes a deposit and agrees to present the offer. He implies that the offer has a good chance of acceptance but doesn’t guarantee it.

A day later he calls to report that the seller is out of town but there is no need for concern. The only problem appears to be whether the chandeliers and fireplace screen are to be included at the price.

What follows afterward is the “big stall.” Every day the broker says that he can’t contact someone. One day he cannot contact the seller, the next day the buyer, the following day the bank or someone else. Before long, ten days pass. There is still no agreement, but neither is there disagreement. The broker continues to assure the buyer nothing is wrong.

A few days later the deposit is returned with a polite rejection note. They buyer subsequently sees a “SOLD” sign on the house. What has probably happened in this case is that the seller, having obtained a bona-fide offer of $240,000, used the offer as leverage in bargaining with another buyer. The “phony acceptance” can be handled in three ways. First, take things into your own hands as much as possible. Don’t let third party intermediaries like brokers or middlemen handle the action. Insist on having your position heard by the principals involved. Find out who they are. Send a telegram or talk to then directly, regardless of what the middleman says.

Second, do the administrative and running around work yourself. It’s amazing how quickly delays can be overcome if you have your secretary type the forms and then hand carry the papers yourself. In that way you won’t hear that the mail was late or paperwork misplaced. Also be sure to tie the offer to a short-term deadline. If penalties can be imposed after the deadline, all the better.

While these countermeasures do not always work, they do serve to reduce the likelihood that your acceptance will be used as a shill. The phony acceptance is a mean trick and you should do everything in your power to keep it from happening.