When Negotiating a Home Sale –
Should you always start with a really low bid?
Well, that depends… How much do you care whether or not you get this particular home?
The most successful sales are WIN-Win.
- The buyer gets the home he wants at a fair price that he can afford, and
- The seller gets the price he needs to walk away whole.
If, based on the current market in a particular neighborhood, you and your agent know the home you like is priced right, and if you really do want this home, then don’t play around. Write a fair offer and try to get the home off the market before someone else does.
The wrong thing to do is offer 10%-15% below list price as a matter of one-upmanship… because you want to see if you can get it at a ‘steal of a deal’.
I once knew a man (not my client) who bragged that he’d made close to fifteen offers with four different agents before he finally got a ‘steal of a deal’. Fact is, the first three agents just got tired of participating in his game and dropped him. And the house he finally bought, wasn’t really such a steal – it had a lot of problems and was actually only worth slightly more than what he bought it for.
So what did he gain? Nothing. He got what he paid for. And in fact, he lost out on some really nice homes because of his greed.
What so often happens when a buyer makes a cut-throat offer is, the seller digs in his heals and refuses to negotiate at all. He either rejects the offer outright, or counter offers $100 below his original list price. The buyer gained nothing by insulting the seller, and the possibility of negotiating a win/win contract was handicapped with the presentation of the initial offer.
On the other hand, if the buyer and his agent run the comps and can demonstrate that the asking price really is way too high, then it is incumbent on the buyer’s agent to prepare a list of comps that he can provide the listing agent to support the lower offer. At least that gives legitimacy to the lower amount – not just another buyer wanting a ‘steal of a deal’ at the expense of the seller.
Frankly, there are a few times when a seller refuses to accept reality, and insists on setting a price higher than market value. In that case, as a listing agent, I’d welcome another professional’s comps that support the buyer’s offer… and in this case I’ll work with my seller to reconsider the true market value of his property.
But here’s the thing. If the seller has decided to list his home that is worth $240,000 (based on sold comps) for $230,000 in order to get a quick sale, then receives an offer of $210,000… that is a total insult to both the seller and his agent. Don’t do it. It indicates there is not a good-faith intent to buy the home at a fair price. The seller will most likely flat-out reject that offer.
Buying a home is all about negotiating fairly and in good faith. So drop me a note. I will help you negotiate a contract that will put you and your family in the home of your dreams.