November 24th, 2008 Categories: Buying
Every purchase offer is a good offer — definitely better than the offer that was never made. “Low ball” offers have their special challenges. As a buyer, you increase your odds of success by following some basic guidelines.
Don’t talk-down the house. “We would offer more, but the wallpaper is horrible, the kitchen is a disaster and the lot is not very nice”. How do you think the seller will react to this message? The potential buyer just trashed the seller’s home, so the seller doesn’t like the buyer already. “If they hate house so much, why did they even bother with an offer?” Good question. You can still be very positive about a home even if it needs a lot of work. “We really love the house. The location and layout work-out really well. For our needs, we’ll need to make investments to change the decor and update the kitchens.” The seller will react much more positive to this message.
Don’t provide an offer without recent sales supporting your offer. The home could be overpriced in today’s market, and a low offer could actually be a very fair offer. By providing real data that supports a much lower price, you can start a productive dialog with the seller about resetting their expectations. You may be successful, or you may not. At least a dialog based on recent data helps keep emotion out of the negotiation.
Don’t tell the seller that the real estate market is really bad. We often get offers 10% – 20% below asking price because “the market is so bad and it’s getting worse every day”. The home seller knows what’s going on in the real estate market. Lecturing the seller isn’t a productive activity. “So what’s up with this buyer? Does he think I’m a knuckle-head?” Presenting broad generalizations about the market don’t help your case.
Don’t be inflexible. If the homeowner is under pressure to sell, your flexibility on other contract terms — settlement date, rent-backs — etc. may be a way to give something back to the seller with very little inconvenience and actual cost to you. This can go a long way to help build good will with the home seller even though your price is much lower than the seller’s expectations.
Don’t be mean! Or, said another way, Be Nice! You’re Mom was right on this one. Being professional, curteous and respectful is essential to making a deal come together.