THERE are few things that New Yorkers react to more quickly than the trilling of a smartphone as it signals the arrival of an e-mail message.
With lightning speed they respond to e-mail messages on the street, in cabs, on buses, standing in line at Starbucks, the instant their Q train emerges from darkness onto the Manhattan Bridge.
So perhaps it should come as no surprise that many real estate deals involving multimillion-dollar apartments and complicated co-op board applications are also now being done electronically.
In the current market, with fewer apartments being sold and buyers waiting to scrape the bottom of the market, many brokers say that the immediacy of e-communication often helps them keep deals alive.
However, the art of negotiation takes on a whole new meaning online and raises a host of new questions.
Can a negotiation be conducted entirely via e-mail? How much and what kind of information can be shared online? Are there times when agents and clients should put their BlackBerrys away and pick up the telephone? Are exclamation points and smiley faces unprofessional?
“It’s a different type of written negotiation that people in the industry have never been trained for,” said Diane Levine, the downtown brokerage manager for Sotheby’s International and a lawyer by training. She says she is always cautious before putting anything in writing, even in an e-mail message.
“It’s the way of the world now, so we’ve got to get used to it,” she said. “But I think agents should be careful to have a plan in mind and not just let it be about spitting everything out in the next e-mail.”
There are obvious benefits and pitfalls to bargaining by e-mail.
It is a good way to send information, to keep a record of communication and to keep everyone informed at the same time, said G. Richard Shell, a professor of legal studies and business ethics at the Wharton School of the University of Pennsylvania.
“But it can tend to go wrong if there’s any kind of conflict or misunderstanding,” he said, “because it can’t convey any nuance or emotion.” To resolve a conflict or unravel a misunderstanding, Mr. Shell said, “you really have to pick up the phone or walk down the street and talk face to face.”
Some studies of e-mail raise warning flags that might be interesting to people who do online negotiating.
“People are less inhibited and they seem to feel that they can get away with more self-serving behavior when they send an e-mail,” said Terri R. Kurtzberg, an associate professor of management and global business at Rutgers Business School. In a study that she conducted with researchers at DePaul and Lehigh Universities, she found that people are more likely to lie in an e-mail message than when they converse on paper. People don’t ask questions as well online and are less likely to reveal their true interests, she said.
But others think that there are circumstances when online bargaining makes sense. Kathleen L. McGinn, a professor of business administration at the Harvard Business School who has written extensively about negotiation, says real estate is one area in which e-mail negotiation may actually be better than face-to-face negotiation.
E-mail can help buyers and sellers be more forthcoming about what they really want, Dr. McGinn said. “It might be uncomfortable for me to sit across from someone and say, ‘Could you leave the sofa?’ ” she said. “But if you put it online, you’re just getting it on a list and you don’t have to worry about seeming penny-pinching or petty.”
The record that e-mail creates can also make brokers more accountable. Dr. McGinn said that when an agent relays a request from a client, there’s a risk that the message might be distorted along the way. But chances for distortion disappear if every request sent by e-mail is copied to every other party involved in the deal.
Dr. McGinn said that e-mail messages should be taken seriously and not written on the fly. “They should be drafted like formal letters and not like an e-mail to your friend when you want to know if they’re ready for dinner,” she said.
To avoid “conflict spirals,” where tiny irritations quickly become irreparable disagreements, she advised against writing in all capital letters and multiple exclamation points and against making flip comments like, “You call that a counteroffer?”
Steve Goldschmidt, a senior vice president at Warburg Realty, recently handled a deal in which he sometimes exchanged 20 to 30 e-mail messages a day with his client, but he said: “I’m old school — I still like to hear the other broker’s voice to get a gauge of where the deal is. There’s no substitute for the sound of a voice.”
David R. Levine, a recent seller, says he appreciated the "real-time updates" of his broker's frequent e-mail messages.
Amelia S. Gewirtz of Halstead Property, says, "The phone is really more about if you think somebody needs a hug."
Mr. Goldschmidt said that some agents hide behind e-mail. “I’ve seen a lot more brokers make ridiculously low offers by e-mail because they’re not afraid to hear the laughter or the scorn on the other side,” he said. “People are more likely to act irrationally or get false courage when they don’t have to talk to the other person.”
Melanie L. Swanson, an agent at Century 21 NY Metro, said that after an e-mail miscommunication cost her a deal, she vowed never to make any major move in a negotiation before first talking to the client. She said she recently misread a client’s e-mail and submitted a bid on an apartment that was $5,000 more than the client’s previous bid, only to learn that the client actually wanted to reduce the original bid by $5,000.
“The seller’s broker had asked for a final offer and I had gotten my buyer’s e-mail at night and the font on my BlackBerry was too small for the lighting situation,” she said. “By the time I realized it and told the other broker it was a gross error on my part, the broker said they wouldn’t entertain the bid and we should just move on.”
Ms. Swanson said that speaking to a client before going into a negotiation was now “critical for me to understand the emotional involvement of my customer, and an e-mail can be misinterpreted very easily.”
Brokers and their clients say that one of the biggest advantages to e-mail negotiation is that information can be shared quickly and with everyone involved.
David R. Levine and his wife, Melanie, are in contract to sell their one-bedroom co-op in Brooklyn Heights, and he said that during the negotiation, they were in constant contact with their broker, Mr. Goldschmidt of Warburg.
“In this market, especially as a seller, our nerves were on edge and e-mail meant that we could get real-time updates from Steve,” he said. He recalled one encouraging message from an open house informing them that a young couple were discussing how to place their furniture in the space.
Once an offer was made, Mr. Levine said, he received copies of all the communication that Mr. Goldschmidt had with Mr. Levine’s lawyer, the buyer’s broker and the buyer’s lawyer. “I could see the progression in the sale because we could read everybody’s e-mail,” Mr. Levine said. “It made us feel more in the loop.”
The ability to reach all parties by e-mail makes it particularly well suited for sales in new developments. Developers would have been loath to back down on price a year ago, but the current market has made negotiated reductions almost a norm. Sidney Whelan, the director of sales at the Kalahari, a condo on West 116th Street in Harlem, said he had negotiated a sale via e-mail because he was on vacation in Spain and after he returned the buyer was out of town on business.
And because the Kalahari is a project with four principals, reaching all of them via e-mail was essential to reaching a price. “You can’t organize a conference call every time there’s a counteroffer,” Mr. Whelan said. Instead, he would pull together data on previous sales in the building and then wait for the principals’ joint decision. “Whenever there are multiple decision makers,” he said, “e-mail is indispensable.”
One of the keys to a successful online negotiation is to make sure agents and clients have met to establish a relationship.
“You have to first meet people face to face, so you can see where they’re at, know their body language and how they react to different things,” said Marcia Altman, an agent with Brown Harris Stevens in the Hamptons. Many of her deals wind up being negotiated chiefly online since most of her buyers don’t live nearby and are looking for second homes. “The emotional part is seeing and choosing the property,” she said. “The rest is just business, and there’s no reason why it can’t be done with e-mail.”
Margery Feldberg, a retired finance executive, hired Andrea Daniels, a senior managing director at Warburg Realty, to sell a 2,000-square-foot apartment on the Upper West Side and then to buy a 4,700-square-foot co-op. Ms. Feldberg said that having looked at 30 different properties with Ms. Daniels, she had a comfort level that made it easy for them to handle both transactions almost entirely by e-mail.
“Having seen so many properties together was huge,” Ms. Feldberg said.
Ms. Daniels disagrees with those who say that e-mail lacks nuance and emotion. “You can hear a terse reply or pensive reply in an e-mail,” she said. “And if you read any of Margery’s e-mails, you would see how expressive a person can be.”
The actual buying and selling of the apartments went remarkably smoothly via e-mail because both deals were straightforward, Ms. Daniels added.
Mr. Levine, the Brooklyn Heights owner, said he and his agent, Mr. Goldschmidt, used e-mail to handle basic questions like whether the Levines planned to leave the flat-screen television and the patio furniture. But he vividly recalls receiving a telephone call from Mr. Goldschmidt to announce the offer that eventually turned into a signed contract.
“He called to congratulate us and tell us we had a buyer, and then we talked about what we should do — accept the bid or counter,” he said. “I think it was very important that we actually had a conversation about the strategy.”
Amelia S. Gewirtz, an executive vice president at Halstead Property, is also of the opinion that at crucial junctures, a phone call is a good idea.
In a recent three-way bidding war over a 1,300-square-foot apartment downtown, she said that she and her partner, Andrew Phillips, organized a conference call with the sellers just before they told the three potential buyers that they would be setting a deadline for a final and best offer. “We wanted to do a final run-through of how it was going to work, just to make sure nothing got lost,” Ms. Gewirtz said.
She added that in the last year she had noticed more and more of her communication migrating toward her BlackBerry and away from her phone. “The phone is really more about if you think somebody needs a hug, if there’s a warmth missing in that moment,” she said, “because e-mail is all about business.”
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