WHOA, HORSEY!! This blog post discusses the seller’s knee-jerk reflex when it comes to “low-ball” offers on their properties.
The first thing I will point out is that I am a Home Stager, so pricing, negotiating, or any part of the sales process is simply not within the scope of my profession. This HAS to be left up to the Professionals.
The reason I am writing this is that I run into the following situation all the time. Most recently, I had a client for whom I had provided Staging services, e-mail me just yesterday.
Their vacant century-character-home here in Edmonton, Alberta, had been sitting on the market for 90 days with no offers and very few showings. I went in at that point and Staged it for them, had new listing photos taken, and updated the listing.
Here we are now, at 23 days post-Staging, and my client receives a “low-ball” offer over this past weekend. The house is listed at $409,000. The offer she received was $370,000. She e-mails me after speaking with her Realtor® to request my opinion “off the books”.
My immediate response to her was to ask if her Realtor® is confident in the pricing. Her answer was, yes. So, I respond to her and firmly explain the reason that I cannot provide her with anything but pure market observations and soft suggestions.
I explained to her that we have to step back and take a very deep series of breaths when we receive a low offer. In the following paragraph, I will outline what I pass on to all of my clients who ask for my opinion.
North America is a huge melting-pot of very culturally diverse communities. Our population is a conglomerate of humans who lived a large part of their lives in other countries. As a seller in North America, we have to open our minds to the fact that the perfect buyer for our property may be coming to you from years of living inside a culture composed of VERY different societal norms.
For example, there are many cultures across the world in which bartering/dickering/negotiating for absolutely EVERYTHING they acquire on a daily basis is EXPECTED. It is a way of life. This even applies to things such as produce, clothing, jewellery, etc. So, when they are making a huge purchase, such as a home, they expect some negotiation as well.
There are also simply some people out there who LOVE the negotiation “game”. They literally get a high from the adrenaline-pumping back and forth of the offer/counter/offer/counter...and so on. The endorphins racing through their veins can actually be quite addictive. These can be the same type of people who regularly gamble, attend auctions, or bet on horse races.
Of course, there will always be the “bargain-hunter” who throws really low offers out there to determine which sellers are extremely motivated to sell. They will do this over and over again until they find a smoking “deal”.
No matter how you slice it, the majority of buyers are not aiming to offend the seller when submitting a low offer. They are simply feeding their adrenaline addictions, habitually following their hard-wired customs and norms, or are testing your waters.
The truth is that buyers usually only go to the trouble to submit an offer if they have decided they LOVE your property. So, most of them will play the game until you have received a satisfactory offer.
And, if in doubt, simply counter their offer to reflect you have intelligently set your listing price.
The client I was referring to above did just this, and ended up countering the buyer’s offers until they came up to $398,000. So, she managed to bring the buyer up by $28,000 from where they started. The property has officially SOLD!!