Buyers want to feel like they are getting a deal and have negotiated the best price possible. Many buyers want to offer so low that there is a strong possibility that the seller will be offended and refuse to negotiate.
No matter how much counseling we do with a buyer, some want to do it their way and insist they know best. I first ask the buyer if they really like the house. I ask that if the seller refused to work with them on the offer and even slammed the door on negotiations would the buyer be sad.
When offering on new homes, builders want to protect their pricing and many refuse to budge. It is just business. They may negotiate by giving an amenity in the house like better flooring or appliances or adding a fence in the backyard. Effectively this is negotiating with the builder but protects his values and his future building.
It takes educating the buyer on what is happening in the market. In very hot markets prices are going over the list price and there are no concessions being offered by the seller. It is our responsibility to prepare the buyer while we are showing property and to not lead them to believe they can bottom out the offer price.
I have seen sellers greatly offended and refuse to even counteroffer. They are thinking the buyer is taking advantage or does not value their home. This is a very dangerous course for the buyer to take. Even some of the best-negotiating agents cannot bring a severely offended seller back to the negotiation table.
Showing the buyer the market stats lays the groundwork for a good offer. If they still feel like they have to offer a little low, caution them that someone else may beat their price. Tell them they may only have one opportunity to bid and show the seller how much they like the home.
A lowball offer can backfire and fizzle out with no counteroffer. The real risk is that the buyer may lose the house entirely or have to pay even more than the seller may have been willing to take before the insult. It is a risky business. Remember there are no trophies for seeing how low you can go.
Will a Lowball Offer Offend the Seller?
If the buyer wants to buy the house then let them offer show how much. Contact