When To Act and When To Ignore Low Ball Real Estate Offers
That’s the question most home sellers and quite frankly many real estate agents have when they get what they perceive to be low ball real estate offers. If you get an offer on your home and your first instinct is to feel insulted, then you’ve probably had low ball real estate offers hurled your way. Welcome to the club. It happens every day to probably 8 out of 10 sellers.
How an Experienced Negotiator Can Turn Low Ball Real Estate Offers Into Deals
As an experienced real estate negotiator my job is to always look at the positives in evaluating the real potential of a qualified buyer being truly interested in purchasing your home. My goal as an exclusive seller’s agent is to get the highest price for my client and protect their fiduciary interest. That’s why hiring a highly trained and experienced negotiator is important when you hire your first agent. A trained expert can flush out the tire kickers and ultimately should be able to negotiate an acceptable fair market price for your home if the buyers are sincere in their interest. The key to handling low ball real estate offers is to be prepared to act one way or the other and have a game plan in place to deal with low ball offers. It is imperative to have the conversation with your client about what constitutes a low ball real estate offer and what the best course of action is. This is something that should be preplanned in advance just in case you get an offer on your home that is well below the mark of perceived respect.
Keep Your Eye On The Ultimate Goal
I can’t tell you how many homeowners have told me over the last few years that they had one or two low ball real estate offers on their home. At the time they were considered low ball real estate offers and unacceptable, but now they are prepared to put their home back on the market at a price near or below those offers. Sad but true and tens of thousands of dollars could have been kept on the table for the seller to walk away with if only a trained real estate negotiator had been in control of the situation. Yes, I agree that it can be difficult to maintain the emotions of a seller, but that is what an expert is trained to deal with, always keeping an eye on the ultimate goal.
Reasons Why Buyers Make Low Ball Real Estate Offers
Keep in mind that buyers may be making low ball real estate offers because they really like the homes they want to buy. but they’re only qualified for a mortgage for less than your asking price. It comes down to affordability for the buyer and what they can actually spend. The positive is that they are motivated and interested in buying from you. The goal here is to get the buyer to pay a fair value for your home; a reasonable price for the seller and a value that will withstand final appraisal by the bank, which is filled with its own bag of uncertainties in today’s market.
To Counter or Not to Counter Low Ball Real Estate Offers
I’m not going to give away all my negotiating techniques here in this article, but I will say that in today’s world of low ball real estate offers, I almost always advise my clients to counter the offer as a symbolic gesture of good faith and motivation to negotiate a fair price. This is not always the case as some homes are so perfectly priced to induce full or over asking price offers. This is a pricing strategy I’ll talk about in a future article. In some cases, when it is clearly an unqualified buyer fishing the bottom of the ocean for a steal of a deal, I will advise the buyer’s agent that a counter offer is not forthcoming and thank them for their interest. Most likely I’ll never hear from that agent again, but sometimes the buyer might make a new offer in hopes of resurrecting their legitimacy in negotiating a fair price for the home. Sometimes it’s not just the buyer, but an inexperienced real estate agent who is providing ill-conceived negotiation techniques that will only hurt their buyer’s chances of making a good deal on the home.
Flush out the buyer
This technique is important because you don’t really want to waste time with a buyer who can’t afford to pay a fair market price for your home and just wants to get a steal. I tell these buyers to follow the auctions and bank owned foreclosures and see if they can get lucky there. Let’s say the low ball real estate offers come in $50,000 under the asking price. First I would counter these offers with a good faith counter and reduce the price between $2,500 and $5,000. This is typically where the rubber meets the road because it will reveal the buyers’ true interest in the home and provide the seller with a sign. If the buyer moves up $2,500 to $5,000 then you know the buyer is going to stay close to their perceived value of the home and their ultimate price goal without much flexibility. If the buyer knows the home is worth closer to your counter offer, then you will most likely see them increase their next offer by $10,000 or $20,000. This is a clear sign to the seller and their real estate agent that a deal can and should be in reach, if properly negotiated.
Sometimes I suggest that the buyer’s agent present their offer in person to the seller, with my presence. This gives the buyer’s agent an opportunity to fully explain their clients’ thoughts on the home, underscore any special circumstances and it gives a stale offer, which would typically be a faxed piece of paper, some level of relevance and substance that the seller can connect to people versus a number on a piece of paper. Sometimes connecting the dots and making the negotiation process a more personal and communicative effort will help take the sting out of low ball real estate offers in hopes that the two parties can meet at a fair price.
Hire The Best Real Estate Agent To Represent You and Turn Low Ball Real Estate Offers Into Success
The bottom line in whether to act or to ignore low ball real estate offers is to have a well thought out plan once you agree on a listing price with your agent. Your home should be priced to fair market value so you don’t have to chase the market and you should interview and hire only the most qualified real estate agent and trained negotiator. This will help make the home sale process as smooth and stress-free as can be. If you’re thinking of selling you’re home, consider interviewing George Jamieson of Capital Residential Real Estate. You will be happy you did. You can reach George at 781-659-2005 or email George@capitalresidential.com.
