Tips for Presenting Lowball Offers
Qualified home buyers are a scarce commodity in the housing market today. And, much like fine wine, antiques, oil or gold, their rarity makes them much more valuable and clearly places them in the drivers seat when they begin to negotiate terms for a home purchase.
Shrewd buyers have the power to cut a deal like never before, if they negotiate with finesse. Finding a seller who will accept a low ball offer takes strategy, knowledge and time, but the payoff can mean thousands of dollars in your pocket now and later.
Tips for Presenting a Low Ball Offer:
- Present a Clean Contract: Dot your I’s and cross your T’s. Present a complete, tidy offer and make sure everything is signed and initialed in the proper place. Don’t ask for things that are not customary. Shorten inspection deadlines. Reduce or waive contingencies.
- Back up that Squeaky, Clean Contract with Facts: Appear strong, qualified and ready to close. Provide a pre-approval letter for the financing, when you submit your offer. Provide the comparable sales data to back up your offer, so the seller can see why the offer is lower than the asking price.
- Learn what motivates the Seller: Price is not the only factor when buying or selling. Knowing the motivation behind the sale can save you money. For example, a seller who has school age children may accept a lower price, if they could lease the property back until the school year was over.
- Don’t add insult to injury: If you are presenting a low ball offer, chances are the price will be insulting enough. Most sellers are emotional about their home. Don’t do further damage by criticizing the seller’s tastes with comments like “we will certainly have to get rid of that wallpaper” or by pointing out small problems like “the caulk in the shower is discolored”.
- Play on insecurity, but cut the negative comments: Try to avoid negative comments about the house or condition unless someone asks you. Great questions which raise doubt without raising tempers are “how many offers have you received?” “how long has your home been on the market?” “how many houses are for sale in your neighborhood?”. These type of questions create urgency without offending the other party.
- Consider hiring a buyers agent: Buyers often call the listing agent for property information, falsely thinking they will get a better deal. Nothing could be further from the truth. The listing agent, by law, must do everything possible to get the best offer for the seller paying the commission. A buyers agent has only a duty of fairness to the seller, but their fiduciary obligation is to the buyer. Additionally, Redfin and other buyer broker agencies kick back up to 2%, so you earn money while they do the dirty work for you.
- Plan on Making Multiple Offers: If wheeling and dealing for a great price is the goal, expect to make offers on at least 10 properties. The odds of finding a desperate seller who will entertain your low ball offer increases with the number of sellers you present offers to.
- Time is of the Essence: Include a time deadline of 24 hours on any offer you present. In addition to alerting the seller that you are prepared to walk away, a time deadline creates a sense of urgency and compels a response to your offer. It also limits the time sellers can shop for a better offer before they respond to you.
- Take the Focus off Price Only. Sweeten the Pot. When I present low ball offers, I always ask the buyer to give up something else to entice the seller. Consider offering a larger than normal security deposit. Waive inspections or repair clauses. Pay your own closing costs. Move up or delay the closing date. Accept imperfections and shortcomings in the property condition.
- Expect a Counter Offer: Rejection is a normal part of negotiating. Don’t make an offer that you think a seller will accept and don’t be upset if the seller turns you down, flat. All sellers feel their home is worth more than the one next door. When presented with a counter offer, always respond back, if you want to buy the home. As a general rule, I always hope to make the seller say “no way” at least twice before I feel the deal may be falling apart.
- Let The Seller Sit: Be prepared to walk away, if negotiations are at a stalemate. Most sellers will negotiate further after more time on the market with no sale. Keep your original files on any home you have made an offer on, but always update your data before going back to the seller again. If the market has fallen further or is expected to fall further, you may find that your offer now looks a lot better than the “one in the bush”.
Thank you for visiting www.infotube.net and happy home hunting!!