Sellers Should Never Say "No"

By
Real Estate Broker/Owner with J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY License # 49FA1074963

Not long ago, I submitted an offer on behalf of some very good buyers I represent. These are dream clients-very well qualified, fun, and sincere. We've been looking for longer than usual, but that happens sometimes. The area they like has some nice stuff, but much of it is overpriced. None of the houses they have seriously considered but ultimately passed on have sold yet. All they want is a house they love in good condition at a price they feel is justified. It is a big buyers market here right now.  

On the home they made the offer on, we went back for a second look and ran market activity in the area prior to making the offer. Based on our research, we decided to make a respectable, but not full priced offer: over 91% of asking price. In a market where it is not unusual for buyers to offer far less, we expected a counter offer. Instead, the listing agent (I should add that the owner is an agent also) responded that the owner would not make a counter unless we raised the offer. 

This was unwise, and I told the agent that it would send a wrong message to my cash buyers to not at least give us a counter offer when we were above 91% of the asking price. After some back and forth, they got the owner to get us a counter offer. After a short negotiation, we had a meeting of the minds at 96% of asking. This will be the 3rd or 4th deal in the past 6 months where the seller initially wanted to simply refuse the initial offer that tuned into a deal, and in all the cases the brokers were able to convince the seller to make a counter instead of a refusal. In all of those cases, the counter offer prevented the deals from being stillborn. 

It costs nothing to make a counter offer to what may be perceived as a low offer from qualified buyers. You have everything to gain and nothing to lose by making a counter offer, even if the initial offer seems insulting. Buyers don't want to have their offers taken personally. They want to do business. Even if a seller feels slighted by a "lowball" offer, they should still keep a stiff upper lip and negotiate. Personal feelings can kill deals. Moreover, if you insult a buyer in this market, you run the risk of having to wait a long time to sell. I have seen several cases where that initial "insult" offer seems like a dream 6 months and three price reductions later. 

Often, the first offer is the best offer. It may not be to your liking, but all buyers should be taken seriously in the time we live in. You never know what possibilities exist if you kill the deal in it's infancy. Always answer with a number- never refuse. 

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Comments (126)

Roger Johnson
Hickory Real Estate Group - Hickory, NC
Realtor - Hickory NC Real Estate

Great post and great comments, too.  It's all about the deal and you can't get a deal together if the two parties don't negotiate.  The first offer is just the starting process of negotiating.

Feb 10, 2010 10:29 AM
Patricia Aulson
BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH
Realtor - Portsmouth NH Homes-Hampton NH Homes

I love the comment above that Bill Gassett makes.  It's not where you start.....it's where you end up that counts!"

Patricia/Seacoast NH

Feb 10, 2010 10:39 AM
Patricia Aulson
BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate - Exeter, NH
Realtor - Portsmouth NH Homes-Hampton NH Homes

I forgot to mention a seller that I had a few about eight months ago. He got a reasonable offer the first week it was listed, good buyers and reasonable when it came to terms.  The seller thought , "oh well, it's only the first week so forget it, we'll get a better offer down the road." Well that wasn't (past tense) the case.  He never go another the offer and the back took it over.  Oh well, some people just don't learn.

Patricia/Seacoast NH

Feb 10, 2010 10:42 AM
Aaron Silverman
SuccessfulRental.com, Bluewater Property Management, LLC and Lowcountry Turnkey Properties, LLC - Charleston, SC
Improving Real Estate Experience through Education

You are correct.  A seller should always counter.  Good story.

Feb 10, 2010 10:52 AM
Lisa Schlitz
Home Run Real Estate, Inc. - Wellington, FL
Realtor - Wellington, Florida Homes 561-214-3216

In this market, I totally agree-you have to start somewhere and a smart buyer will start low. From the amount of comments this got, I take it most people agree!

Feb 10, 2010 10:58 AM
Tammy Fullriede
Bale Realty - Wilmington, IL

This just happened to me.  My cash buyers did make a low ball offer on a home that needed major repairs.  The asking price was 95,000 and my buyers came in at 60,000. Low, I know, but two homes have recently sold on the block in the 60's that also needed repairs, so my buyers felt that was a good starting offer.

After one week, no call from the listing agent. I called again only to be told the sellers refused to counter and that they wanted us to come back with another number. So we did... another week went by and again the seller refused.

This home looks absolutely terrible from the outside, but inside it is charming. However, There are no interior MLS photos, so the home is not being marketed correctly. I keep thinking about how many people will pass on this home just because of that alone.

Feb 10, 2010 11:47 AM
Marc Iafrate, MBA
Capital City Realty Team - Raleigh, NC
MBA - Wake County Real Estate Search

You are absolutely right.  Work with what you have since another deal may not be just around the corner in this environment.

Feb 10, 2010 11:47 AM
Eileen Hsu
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Not every agent is a deal maker like yourself. As much as every agent like to think they are a deal maker, sometimes I think there are more deal breaker than we like to think.

Feb 10, 2010 11:56 AM
Jennifer Blanchard
Berkshire Hathaway HomeServices NJ Properties - Basking Ridge, NJ
No Obligation, Just Information

It doesn't matter where you start, what matters is where you end up! I agree - a seller should ALWAYS counter!

Feb 10, 2010 12:03 PM
Donna Harris
Donna Homes, powered by JPAR - TexasRealEstateMediationServices.com - Austin, TX
Realtor,Mediator,Ombudsman,Property Tax Arbitrator

I don't allow my sellers to ignore offers. If they want to get their point across, they should at least counter back full price, though that doesn't work in today's market... but any counter is better than a nothing.

Feb 10, 2010 12:24 PM
Frank Castaldini
Compass - San Francisco, CA
Realtor - Homes for Sale in San Francisco

In your situation I agree...but if the offer was way out of line, which the one you describe was not, I would'nt have a problem not responding.  It happened to me with a seller.  Buyer and buyers agent were so off the mark it was embarrassing.  Long story short, we got asking price for the property.  Offers need to be near the comps or the buyers are probably wasting everyones time...and they also need to be mindful that a low ball offer might piss someone off...

Feb 10, 2010 12:34 PM
Candice A. Donofrio
Next Wave RE Investments LLC Bullhead City AZ Commercial RE Broker - Fort Mohave, AZ
928-201-4BHC (4242) call/text

One of my favorite investor clients once said "The magic of a deal is in the counter offers."

If you're making offers in the 90s of list, why NOT counter it? It's the ones that are in the 60s and 70s that make it tough, but even then . . . counter! Let's see what y'all got! :)

Feb 10, 2010 12:46 PM
Bernadine Hunter, SFR, ACRE
Keller Williams Greater Columbus Realty - Pickerington, OH
"Finding Solution to Your Real Estate Needs"

I've always told the sellers I represent to not take a low ball offer personally. Simply counter with an offer closer to what they expect. It lets the buyer know that you are willing to negotiate and at the same time sends a message that you'll consider all reasonable offers.

Feb 10, 2010 01:03 PM
Delaware Junk Removal Residential And Commercial Hauling Clean Outs
Delaware Junk Removal 302-530-9186 - Wilmington, DE
Whole House Clean Outs, Basements, Garages, Attics

Even if the sell comes back with a grand less its a good idea imho.  Why kill it?

Feb 10, 2010 01:06 PM
Delaware Junk Removal Residential And Commercial Hauling Clean Outs
Delaware Junk Removal 302-530-9186 - Wilmington, DE
Whole House Clean Outs, Basements, Garages, Attics

Even if the sell comes back with a grand less its a good idea imho.  Why kill it?

Feb 10, 2010 01:06 PM
Jeanne Dufort
Coldwell Banker Lake Country - Madison, GA
Madison and Lake Oconee GA

I tell my sellers that a counter offer is a good way to communicate.  For example, if our list price is well supported by recent comps and we get an initial offer at 80% of list - then our first counter offer will be pretty stiff on price,but... we'll look carefully through the other terms and try to be as agreeable as possible.  Thats our way of saying - we're listening to your needs, and truly want to do business, but... you're going to have to get into the game price-wise for us to sharpen our pencil.

Feb 10, 2010 02:03 PM
William James Walton Sr.
WEICHERT, REALTORS® - Briotti Group - Waterbury, CT
Greater Waterbury Real Estate

I am beginning to love counter offers. They are the first step in the negotiation dance that must be played out in order for a contract to close, when the sales price can't be agreed upon initially.

Feb 10, 2010 03:15 PM
FN LN
Toronto, ON

It is important that agents and their sellers not be insulted when a low offer is presented.  Look at the offer rationally and decide if a counter offer is appropriate.  In many cases, a low offer is increased to a mutually acceptable price.  Many people are reading that they should submit low offers due to the current economy.

Feb 10, 2010 09:33 PM
Richard Glick
Kingsway Realty - Lancaster, PA

I have come to realize that some sellers really just dont want to sell that badly, they would rather wait it out for that perfect offer....in this market it doesnt come along

Feb 11, 2010 03:08 AM
Christine Donovan
Donovan Blatt Realty - Costa Mesa, CA
Broker/Attorney 714-319-9751 DRE01267479 - Costa M

I see no reason not to negotiate with an offer unless you're fortunate enough to be in a multiple offer situation.

Feb 11, 2010 03:29 PM