Whadda Ya Mean They Said “NO”?!?!
There is a subject that’s been coming up a lot lately…the subject of Low Ball offers. It would seem many are advocates of offering a price on a house that is well below asking & what the current market will support. The thinking goes, you are showing the seller you will not be taken advantage of and you have the upper hand in negotiations. What never seems to be addressed is the notion that the seller might not be interested in playing this game and will simply say “NO”. No counter offer and negotiations officially over.
If a seller wants to sell and a buyer wants to buy then there is no reason a deal can’t be worked out. This is predicated on the idea that both parties are going into this with a willingness to negotiate in good faith. Writing under asking is not a bad idea, writing a reasonable offer below the asking says to the seller “I like your house and want to buy it, we just have a difference in opinion of value.” A low ball offers sends a different message. Like it or not, the seller may see your low offer as an insult based on the idea that you think they are an idiot who doesn’t recognize the value of their asset. It says, “I’ll throw something out there and see if anything sticks.” It does not say, “I’m committed to getting this deal done from start to finish.”
I witnessed buyers missing out first hand with a listing currently on the market. The first buyer wrote an offer below asking, that the seller accepted as is. It was below what she wanted, as well as the comparables, but the she liked the other terms. Upon hearing the offer was accepted, the buyer backed out. A week later the same buyer wrote another offer but even further below his original price. He felt he had not negotiated well as the seller accepted the first offer. At this point, she felt he was not negotiating in good faith and was trying to take advantage of her. He refused to budge and the deal did not happen although he really wanted the house. The seller just couldn’t take him seriously.
In the second case, an offer came in even lower. I was open with the agent about other interested parties and was going to let them know if they wanted in, they needed to write an offer immediately. Another, much better offer arrived. The seller decided to outright reject the first low offer. She didn’t feel it was close to fair and not worth bothering with. This was much to the dismay of the agent. She kept repeating “I told you to counter!!” My response, “Nothing says the seller has to!” There are 3 answers on the table for the seller, an outright “yes”, they can counter, and again, they can just say “NO!”
If finding a house with a distressed seller, that is willing to let the property go for a song, is what you are looking for, then by all means, go in low. If however, you really want the house, you will have much better results if you go in with the attitude of co-operation and fairness.
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3 Responses to “Whadda Ya Mean They Said “NO”?!?!”
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Julie,
Great points.
Without the ability to read minds, the seller can only judge the seriousness of a buyer by the offer they make.
Brian Boisson
Low ball offers are tricky. I was just in a situation where the seller had 6 offers. One of them was all cash, but it was, by far the lowest offer. Still, I encouraged her to counter everyone, since I was in a situation once where the person who originally had the lowest offer ended up coming back and getting the property.
In this case, my seller decided not to listen to my advice and decided to simply take the highest offer and reject all of the others. For that very reason, I agree with you that if someone really wants a property, they need to put their best foot forward right from the start or they may miss the boat completely.
I always love your titles! It’s really interesting when someone writes a low offer and then is surprised if their offer is not accepted. So important for buyer’s agents to be aware of the market and encourage their clients to put in an offer that the seller can consider seriously, wince the seller is not obligated to counter them. I know everyone wants a “good deal” but the only fireproof way to guarantee that you didn’t pay too much for a house is to not get it at all.