How to help your buyers make a lowball offer that home sellers just might accept

By
Real Estate Agent with Keller Williams Select Realtors-Buy a home in Washington DC. Sell a home in Washington DC SP98364271

 

 

1. Learn how motivated the seller is to make a deal

Certain sellers are going to be more willing than others to negotiate a low offer, and there are several giveaways that might indicate more leeway on the issue of price.

For instance, if the sellers have already purchased another home and that sale has closed, they're likely to be more willing to make a deal, said Dick Gaylord, president elect of the National Association of Realtors and a broker with Re/Max Real Estate Specialists based in Long Beach, Calif. And certainly if the property has been on the market for a long time, sellers will be interested in entertaining any offers, he added.

To get at as many seller details as possible, Gaylord gets in the ear of his or her listing agent. The nuggets of information he gets can be clues as to what kind of offers they'll consider.

Overall local market conditions also play a role. The housing market in which O'Heron bought, for example, was sluggish, and the home he bought had been on the market for about a year. Because of the job relocation, the seller needed to move and wasn't in the position to take the home off the market until conditions were more favorable, O'Heron said.

2. Make your case with hard facts

When putting together an aggressive offer for a client, Boyd doesn't just hand the seller a purchase agreement with the price the buyer is willing to pay - he creates a cover letter explaining exactly where that number came from.

In addition to citing comparable sales in making the offer, it also could be important to include details regarding the amount of inventory in the immediate surrounding area, he said.

"If we just looked at the relative values of the houses that sold, we would end up paying too much for that house because we know that the values are going to fall," he said. "If we see two years' worth of inventory, we should be buying five percent, potentially 10 percent less than what houses have sold for in the past year in the neighborhood."

Buyers may even personally write a letter to the sellers to make their point, as they did when the market was hot and they aimed to stand out from the crowd, Gaylord said. That way, they can detail what they like about the house but express their fear of future dropping values.

That's still not to say the seller will respond positively.

"The difficulty we're having in my market right now... sale prices are not dropping, things are staying on the market longer," Gaylord said. "Buyers read about how terrible the market is; sellers don't want to budge because they're reading that prices aren't falling."

3. Prepare for the possibility of rejection, or negotiation

Ultimately, a real-estate agent working on behalf of a buyer needs to honor and facilitate the offer that the buyer wishes to make - even if it seems to be too low.

Gaylord offers a word of warning to buyers making very low offers, pointing out that the seller might refuse to negotiate. On a "super aggressive offer," Boyd might tell a client "there's a one in five chance there will be a positive response."

Still, there's that potential for a seller to counter-offer, especially if there hasn't been many other bids. Danielle Kennedy, a real-estate sales coach and author based in Pacific Palisades, Calif., advises sellers not to think of a low offer as an insult but as "a sign of interest."

"And it begins the dialogue regarding the purchase of your house," she said in an e-mail interview. "They should make every effort to be grateful that an offer has come in."
Also, not all hope is lost even if a seller doesn't bite immediately.

Sometimes after time elapses, the seller comes around and decides to negotiate, Boyd said. Or new information - such as the sale of a comparable home at a lower price - can nudge a seller to give an aggressive offer a second look and open the negotiation process.

 

 Source: RIS MEDIA

 

 

To receive a free list of "Houses for sale in Washington DC,please give Lanre Folayan - Real Estate Professional with Exit Premier Realty a call at (202) 378-0283 (Direct) or( 301 ) 560-6700 x1154(Offuce). I can also be reached on my website www.buyandsellnewhomes.com/ and www.freelistofhomesforsale.com.  I would be more than happy to help you make your home purchase and/or sale a stress free and very happy one. "Buy and sell a home in Washington DC"

 
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Rainer
7,224
Carrie Heath
REMAX Affiliates - Chippewa Falls, WI
I liked the suggestion of a cover letter going with an offer.  While my market area has seen a definite increase in sales and home values (4th best year EVER), there is still a lot of inventory out there and most homes have gone from 2-3 months on market to 6-9 months on market.  Great post!
Feb 17, 2008 09:46 PM #1
Ambassador
1,118,540
Russ Ravary ~ Metro Detroit Realtor call (248) 310-6239
Real Estate One - Commerce, MI
Michigan homes for sale ~ yesmyrealtor@gmail.com
It is Great to learn what the sellers want to do from the words of the listing agent.  Loose lips do sink ships.  Too many agents give away too much confidential information.
Feb 17, 2008 09:59 PM #2
Rainmaker
22,812
Kimble Bosworth
Proforma Printelligence - Nashville, TN
bozTEAM

GREAT POST. I am going to put this to work today by adding a letter from my clients and absorption rates to my cover letter.

kimbleBOSWORTH, bozTEAM of Village Real Estate 

Feb 17, 2008 10:45 PM #3
Rainmaker
54,482
Rick Callaham
Team Quintana Real Estate - Spokane, WA
Spokane Realtor

Ross Quintana - Spokane Real Estate Investor Expert Yes I usually add a cover letter to humanize my clients. The one word of caution I would say is I try and tell my clients let's look at what fair market value is, then what is it worth to you, and sometimes don't be afraid to offer full price if the value is there. If you advise them to come in low, they may lose the house to another offer and if the value was their you have done a disservice to them by not axplaining that.

You shouldn't try and go high or low, but at fair market value. If you over justify your low offer many sellers will take you as someone trying to steal the property or argue with you because of course they think it is worth more. This may make it hard to really work with them when it comes to the buyer really wanting the home.

Ross Quintana - Spokane Washington Real Estate Agent

Feb 18, 2008 02:48 AM #4
Rainer
11,754
Mary Pichardo
Keller Williams - Mira Loma, CA
Your post makes some great points. We can all implement is our business. Ross makes a good point.  In the so Cal market it varies so much do your homework know the fair market value in the area first.
Feb 18, 2008 03:05 AM #5
Ambassador
3,675,572
Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital
This has a lot of good points.  And I write the hokey-est cover letters you will ever lay eyes on!  Oh, and I show them the market analysis I did for my buyer, sort of humble, and I may have left something out.  But most of mine go through - eventually.
Feb 19, 2008 03:47 PM #6
Rainer
370,882
Joseph "Joe" Peters
Coldwell Banker - Warren, NJ
Helping you to achieve your Goals and Dreams
Great presentation on this subject.

I use these statisticcs with both buyers and sellers.

Se my post at: http://activerain.com/blogs/jpeters
Apr 05, 2008 10:52 PM #7
Rainmaker
320,311
Kathy Torline
ERA Herman Group Real Estate - Colorado Springs, CO
Colorado Springs Real Estate Blog 719-287-1049
Great post -- I'm going to try the cover letter idea.   I have gotten several low offers to go through; and the best thing I've done is pick up the phone and talk to the listing agent.   I'll tell them that the offer may be a little lower than the seller is expecting but these are some of the reasons the offer is written the way it is.  I'll talk about the CMA, market conditions, condition of the house, etc.  Then I'll tell them that my buyer is already pre-qualified and give them a small "sales pitch" on my buyer.   It's amazing how far some communication can go on getting the deal done.  
Apr 05, 2008 11:11 PM #8
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Lanre-"THE REAL ESTATE FARMER" Folayan

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