Whether you are using a Listing Agent or selling on your own, getting that offer that makes you wonder why the buyer wasted the paper can get your blood boiling. Close the windows, send the kids to the movies and have your temper tantrum and then send a counter offer with a thank you note.
As a transaction goes forward there are ebbs and flows to both your and their motivation that can bridge even large gaps. You never know when you may NEED to open the line of communication again particularly if they are the only buyer's that have shown serious interest in your property.
I had a recent experience that illustrates this approach to a low offer. My clients were originally looking for a property for their daughter and stumbled across an unbelievable property that was being marketed as either two seperate condo units or a two family unit. They had a short term plan of downsizing themselves and they thought this would be the perfect opportunity to accomplish both goals with one property.
This was a very unique property that really had no good recent sales comps and was very difficult to gage the true value. Knowing that it was this property or nothing, my clients wanted to reach an agreement prior to putting their home on the market. It took a few tries but we ended up with an accepted offer with a "kick out clause" with a 30 day time limit on it.
The home we were listing was in a very desirable neighborhood but, it was also in a price range that had almost no activity in the last three months. The initial response was great and the feedback in regards to the price and property were all good. We were 4 days on the market and here it came... the low-ball offer.
The potential Buyer's were using an Agent and have been watching this particular neighborhood because the have friends and family here. The low offer was not meant to be insulting or to try and steal the house, I honestly believe they just wanted to make an attempt to get into the neighborhood and stay within their means. We made our counter and both felt we were too far apart at this point to get something done.
The early interest kept at a high level but everyone either had something they would need to sell or couldn't pull the trigger for one reason or another. Meanwhile our 30 days was coming to an end. Fortunately, there had not been allot going on with our desired property and the fact that we went ahead with the inspection, appraisal and P&S prompted them to extend the kick out contingency for another 30 days.
About 3 days into the extension, out of nowhere a cash offer with no mortgage/inspection contingencies came in on one of the condo units and we had 24 hrs to drop the contingency and move ahead or back out. The Agent for the potential buyers had reached our about two weeks earlier to let me know that they were still around and would go ahead with the terms of the original offer.
Now we will find out what the motivational factor is for both parties. Realistically, my clients would be stretching themselves too thin at the original offer. They really wanted this property and I suggested that I go back to see if we can get something done.
I received the call about the cash offer @4:30 p.m. and by 10:30 pm we had a signed offer on our home and could move forward with our purchase.
The final outcome in business terms:
- We sold our listing for much less than the market called for.
- They paid more than they really wanted to.
- The Seller of the property we were buying sold for less than she wanted.
- We paid a bit more than we had planned
The final outcome in personal terms:
- My clients were able to reach their goals of downsizing and assisting their daughter and grandson and didn't offset their fast approaching retirement plans.
- Our buyers were thrilled to get the house they really wanted for less than market value and were able to meet our price without changing the amount that they were financing.
- The Seller of our property was happy to get everything wrapped up so that she could move on to her next chapter. Also, saved the hassle of two separate transactions/inspections/appraisals etc....
The main reason this complex situation found a happy ending is that everyone involved was motivated to get it done. If the original low offer was ignored or dealt with in a negative manner things may also have turned out differently.
You can be insulted, but don't burn bridges!