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Spring TX Real Estate: Negotiating a LOW BALL offer

Whenever I receive a low ball offer I have to hold back my gut reaction of wanting to call the buyer's agent and say "Is your buyer CRAZY? How could they offer so little for such a great real estate property?"

I know that getting upset with the buyer's agent is not going to get my seller's house sold. So instead I calmly call the buyer's agent and seek first to understand. As I am hopeful that the reason I received a low ball offer is because of a misunderstanding of the comps, the Spring Texas real estate market, or the cost of upgrades that need to be made to the home.

Usually the response I receive has nothing to do with the true value of my seller's Spring TX home. But some other reason that makes sense in the buyer's mind that the home is worth significantly less than the list price. It could be because the buyer has overestimated the cost of updating the home, the buyer may not be able to qualify for a higher loan amount, the buyer may think that the seller should take less for the home if it has been on the market for a while, or simply the buyer wants to get the best deal possible. There are probably as many reasons why a buyer thinks a seller should take a low offer as there are days in the year.

As a seller, you need to remember that an offer is an offer no matter how low. The biggest mistake you can make is to flat out reject the offer. Sometimes the buyer just wants to see how aggressive you are willing to negotiate.

Based upon the buyer's rationale for his low ball offer, determine your negotiating strategy and provide the buyer with a counter offer. Don't let your emotions get in the way and become insulted. Give the buyer a counter offer and let the negotiations go where they may. Sometimes the buyer will come to his senses, realize that you are not going to give your house away, and counter back with a more realistic sales price.

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Posted by Jill Wente - Spring TX Real Estate on 03/24/2008 06:14 PM

Comments (5)

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5 Comments on Spring TX Real Estate: Negotiating a LOW BALL offer

Smart to keep your cool. By showing emotion you could lose your edge.

03/24/2008 06:35 PM

by Lynchburg, Roanoke & Danville Area Nannette Saunders ASSOCIATE BROKER (Bradner, Farmer, Towler and Associates)

You are so right. This is what "negotiation" is all about. Sure, some low ballers will never agree to a reasonable price, but others will once conversation gets underway between buyer and seller.

03/24/2008 07:16 PM

by Rosario Lewis, GRI ~ DDR Realty, Orange County, NY (DDR Realty)

If it is a ridiculous offer, I often suggest the seller use the Seller's Invitation to Buyer to Submit New Offer (TAR 1926). That frees us to negotiate other offers if they come in around the same time.

03/26/2008 07:05 AM

by Lorrie Semler, GRI, e-PRO (Keller Williams)

I always suggest that sellers respond to lowballs. Some buyers are just testing the waters and others are total goof-balls. But you can generally separate the nut-jobs from the real players by a counter. Some buyers aren't really buyers today.

I offer the analogy that if you can't afford to pay $2.59 for a cheeseburger and want to buy that cheeseburger for a quarter, you're not a buyer of cheeseburgers.

You're a homeless person.

Others are like that aggressive guy at a single's bar who walks up to every woman he meets and asks her to go home with him. Nine may slap his face, but there's always one who will take him up on it. The problem with equating this practice to real estate is it might take 99 offers to find that one seller who will let you steal his house. And I'm way too busy to write 99 offers. I don't throw offers at the wall.

Strategy, people, that's what gets you a great price and a wonderful home. And it sounds like you, Jill, already understand this principle.

04/16/2008 08:05 PM

by Elizabeth Weintraub, Sacramento Real Estate Broker (Lyon Real Estate)

What you said here sums it up nicely

"Don't let your emotions get in the way and become insulted. Give the buyer a counter offer and let the negotiations go where they may. Sometimes the buyer will come to his senses, realize that you are not going to give your house away, and counter back with a more realistic sales price"

In some cultures they expect the negotiations to happen as a way of doing business on a regular basis and we are becoming more and more of a multi-cultural society here in TX.

Another good post Jill, you should post this in the Realtors section and just change the title from Spring,TX RE to Anywhere USA Real Estate!

04/17/2008 01:09 PM

by Karen Otto, Collin County, Plano, TX Home Stager (Home Star Staging)