Throughout history, and still today, a big fuss is made over ridiculous "low-ball" offers from Buyers. What's the big deal? Reject them. If your price is right, a buyer will appear. If you keep getting buyers, who appear unreasonable, perhaps you should reconsider who's being ridiculous.
A low-ball offer (or an overpriced listing) requires very little research because the agent doesn't have to narrow down a market value to prepare what is obviously, to everyone involved, an unreasonable offer (or value). How will that help you in the next stages of negotiations (if you get that far)? It won't. It will usually hurt your position and your ability to negotiate the best price and terms.
A reasonable offer (or list price) takes more time to research and prepare and usually achieves a more favorable result. A reasonable offer (or list price) is easily supported by data, facts, trends and acknowledgements of a home's strenghths and weaknesses.
We rarely write "low-ball" offers because we have educated our clients as to how to achieve the best outcome in negotiations and they usually choose not to begin by submitting ridiculously low offers (in spite of a, perhaps, ridiculously high asking price). Still, as agents for our client, we will submit any offer they ask us to prepare. And we will do our absolute best to sell every offer to the seller and/or their agent. There may be specific situations that create arguments for submitting a ridiculous low-ball offer, but I suggest they are very rare.
Enough about ridiculous low-ball offers. Everybody knows what those are. And yes, they can be offensive. Let's talk about ridiculously high asking prices. Most sellers seem oblivious that such asking prices are equally offensive.
I'm here to suggest that most offers from competent buyer agents professionally trained in negotiations will not be ridiculously low. They may be low, but they approach fairness, skewed to their client's favor.
In like manner, most list prices from competent listing agents professionally trained in negotiations will not be ridiculously high. They may be high, but they approach fairness, skewed to their client's favor. This is as it should be.
I find it extremely comical (but not productive) when a buyer makes a reasonable offer on an overpriced home and the seller (or their agent) throws a tantrum.
Most homes in our area are significantly overpriced for the reality of today's market. Some are ridiculously above the highest possible figure a home will appraise for (no comps anywhere near the asking price) yet sellers or their agents take offense when a buyer makes a "reasonable", and sometimes even "more than fair" offer.
If our client likes a home, regardless of the seller's ridiculously high asking price, we will attempt to negotiate. We'll give the seller a chance to be reasonable. We usually go in with a "reasonable" offer. A fair offer. Skewed in our client's favor? Likely. But not so much that a seller should flip out, nor their agent (if they have one) who should have a good idea of fair market value. A competent agent usually understands. If we can convince the agent, they will even go to bat for us with our data. Sometimes we come to terms. But if a seller or their agent chooses not to be reasonable, Sorry. They get to keep the home.
If a home is priced well to begin with, we go in with... a "reasonable" offer. In these cases, however, nobody calls it a "low-ball" offer. Not because the reasonableness of the buyer has changed, but because we are dealing with a more reasonable seller.
Believe me, sellers and listing agents: Buyers and their agents are just as offended by your ridiculously high asking prices. But most of you don't get the chance to see our reaction because we're busy making a deal on a home that will sell for a reasonable price.
Skewed in our client's favor? That's our plan!
- Do you have excellent credit?
- Are you looking to purchase a $300,000-$800,000 home within 90 days?
- Are you making a substantial down payment (5% of the purchase price or more) or paying cash for your next home?
If so, don't buy a home without an agent on YOUR side of the transaction! Make sure you hire an Exclusive Buyer's Agent! (EBA)
We'll help you navigate the sea of overpriced listings until we successfully negotiate a fair price (if not skewed in YOUR favor) on a wonderful home!
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