Why Do LOW BALL OFFERS Seldom Work?

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Selling your house can be a series of extreme highs and extreme lows.

You meet the perfect real estate broker.  They go through extensive pricing info including comps, market data, and detailed sales info.  Once you sift through all of that you determine your best selling price.  Then the hard work begins.

You meet with the stager and get a long list of things to pack away and repair.  The repairs involve 3 trades and you having to take lots of time off work.  It’s all worth it as it will help you get top dollar when you sell.  So you plug away.

Then the day finally comes when you list the home on MLS and start to get showings.  The first low is when you do not get an offer 1 hour into being on the market.  Is this going to take longer than a day?  It almost always does unless you are in one of those super hot Austin neighborhoods everyone wants (Circle C, Tarrytown, Western Oaks, Shady Hollow etc).

But finally you receive an offer!…When your agent comes over they have a solemn look on their face…What could be wrong?  When you start going over the offer you are shocked to learn that not only is the offer 10% below list but the agent has written a letter telling you and your Broker why you are so wrong in how you priced your home.  You are insulted and tell the agent “Call that agent and tell them to take a flying leap!.  I would never sell for that!”

Your broker tells you that it’s common and you should counter offer but you find yourself hating this insulting buyer even though you have never met them and know nothing about them.  After much discussion you and the Broker decide that the best course of action is to counter at full price or close to it.

So what has the buyer and the buyers agent accomplished?    Nothing….except…They have upset the seller to the point that they do not want to sell to them.  What a bad way to start off a good faith negotiation!

A better strategy is to offer close to the price you are willing to pay for the property.  Give yourself a little wiggle room but do not insult the seller.  They will strongly consider your offer and probably move more your way than they would if you low ball.

Negotiating is a learned skill and not all agents are good negotiators.  Sometimes an agent has to low ball because the client wants them to.  If you have to low ball  it is better to just tell the seller “This is what we feel the property is worth” instead of telling them they overpriced the home, it smells and needs upgrading.  Of course they are insulted!

Some situations do call for low ball offers.  Bank owned distressed properties for example, that have been on the market for a long time, call for low offers.  But not a well priced, clean home that is loved by a seller.

Save yourself the headache of making someone mad for nothing.  Don’t write low offers on good properties.

For more info on effective Real Estate Negotiations call Steve Mallett at (512) 627-7018 or steve.m@kw.com

Steve Mallett has been a Real Estate Broker in the SW Austin, Dripping Springs area since 2003.  Specializing in listing to sell and representing buyers in the local area. 

 

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