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LOW BALL OFFERS!!! What is a seller to do?

By
Real Estate Broker/Owner with Godzyk Real Estate Services NH License 033394

In a decling economy the first sign of the times is "the low ball offer". By using this term, a low ball offer is when a buyer makes an offer way lower than current market value.
 
This is often the most emotional thing that can happen to a seller when they receive their first low ball offer, your home is your castle and how dare anyone insult me like this?

That is often the first statement that comes out of a sellers month, the next is either come choice words followed by "get out" to the listing agent.


EDUCATE THE SELLER REGARDING LOW BALL OFFERS

First thing is the agent has to submit all offers to the seller no matter how low or crazy.

Second rule, dont shoot the messenger

The most important thing and the key to addressing low ball offers is that when you sign the listing agreement with the seller, The listing agent needs to educate them what a low ball offer is and that they will most likely face at least one if not many low ball offers. That it is not anything against the seller that is it is a sign of the times. It is what the media teaches buyers to do. That you can have several buyers making several low ball offers every week on multiple properties until they find a steal.


WHAT TO DO ONCE YOU RECEIVE THE OFFER

The hardest part in real estate these days is not getting a potential buyer to look at your home, but getting them to make an offer... now you have a starting point.
 
First thing is to take the emotion out of the negotiations. I know this is tough when you think you have been insulted but you need to put your "business" hat on and take your home owner hat off. Think about when you are going to make an offer on your next house, you will want the best deal, right? And you will probabily make an offer lower than the asking price...

MAKING A COUNTER OFFER
 
You have someone interested enough to make an offer so your next step is to make a counter offer. A counter offer is where you come back and tell them what you will take for the property. it should be in writing, never make oral statements.

You have two choices, you can counter either back at your current price or if you CAN go lower on your price. then counter at your best price where the point is that you can not go any lower.

It is up to you how bad you need to or want to sell your property as where you should counter. 

DO NOT MAKE THE CARDINAL MISTAKE

Do not make a mistake and decline the offer all together, negotiations are now open with this initial offer, you need to buckle up and make the choice of what you can sell the house for to reach your goal of getting the house sold and getting you onto your next home and next chapter in your life.


IN CONCLUSION

When in doubt, breathe.... Do not be offended by any offer that comes in, it is not personal, it is biusiness, the business of a buyer trying to get a house for the best price and terms they can.

When you sign a listing agreement, you have entered into a business, the business of selling your home. So your bets bet is to keep your emotion in check and react with a business mindset, not in a defensive mindset. Remember your goal of selling your house. Use each offer as an introduction into negotiations, no matter how low, counter, never ever reject an offer without at least counter offering it once.

Good luck with your sale....



SELLERS, BUYERS AND AGENTS, PLEASE LEAVE YOUR COMMENTS, SUGGECTIONS OR ADVICE FROM YOUR POINT OF VIEW.

Comments (3)

Ken's Home Team LLC. | 360.609.0226 | Portland, OR & Vancouver, WA Real Estate Team
Ken's Home Team LLC. - Vancouver, WA
- SOLD IS OUR FAVORITE 4 LETTER WORD -

Thank you, good post, I like what you are saying

Jun 30, 2010 02:37 AM
Michael Setunsky
Woodbridge, VA
Your Commercial Real Estate Link to Northern VA

Scott, very good points. Rejecting an offer stops all negotiations. I always advise my clients to counter an offer no matter what. Thanks and great post!

Jun 30, 2010 02:51 AM
Andrew Mooers | 207.532.6573
MOOERS REALTY - Houlton, ME
Northern Maine Real Estate-Aroostook County Broker

Not every market is declining, suffering. No every real estate seller is 20 minutes away from foreclosure, carrying a staggering six digit mortgage and they own their property outright like Maine. If you get a low ball offer, make it, don't over react to it. Remind buyers that not all sellers are destiture, have to sell to buy a kidney and the price on the tag is the price they have to pay. Or not.  Keep it simple.

Jun 30, 2010 02:59 AM