Why I love re-trades

Tim Milazzo
May 22, 2020

Re-trading terms on an agreement at the closing table is one of the worst behaviors that happens in the real estate industry. A deal party, like a buyer or lender, will propose a deal that they will get “pregnant” , which means both sides have agreed to work toward consummating the deal. Saying yes in this way has the effect of excluding other potential choices, like selling your building to another bidder, pursuing financing with another lender, etc.

Re-trade: to change the terms of an agreement

So if someone spends a couple of months completing diligence, drafting and negotiating legal documents, and gets re-traded after having lost out on other opportunities, it’s a big deal. If they are now in a financial bind where they have no other choice but to proceed with the now altered deal, it’s awful. This can happen when there is an imbalance of power — one party that can live without the deal or has other leverage that puts them in a position of power. There’s a special place you know where for those that seek to manipulate people in this way as a regular course of business.

But re-trading at the beginning of the process, before anyone has committed money or time that they can’t get back, is very different. At the beginning of a deal’s lifecycle, you want both parties to be nimble in assessing risk and opportunity. Alter numbers and terms as many times as it takes when a deal is in early stages because that will avoid the need to make changes later on.

Why doesn’t this happen more often in the real estate market?

Because there are a million different opportunities, and the one resource you can never get back is your own time.

Or is it?

While it’s true you can never recover lost time, there is another precious resource that makes the world go round, and losing it will far outstretch the gains of any single, short-term business decision you can make.


So here’s the moral of the story: re-trade those deals as many times as you’d like. Make the deal perfect. But do it at the right time, before committing. Once you’ve committed, honor your commitment.

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