Making A "Low Offer" Could Hinder Your Negotiations

Every headline you read or article that seems to be posted right now focuses on how it is a buyer's market. Sellers are desparate to sell or banks are letting home go for pennies on the dollar. Thus, when you are looking at a home you should be offering substantially less than the asking price of the home. But, is that reality and reasonable to do?

I have been dealing a lot lately with buyers looking at homes. Especially bank owned properties and short sales. Homes that are priced aggressively in this market are getting showings and people are tending to view these homes. However; just becasue it is on the market for X amount of dollars why do you feel you should offer 20% to 40% less? Because the headlines tell you they will accept it?

i cannot speak for other parts of the country but in the Charlotte market the banks are NOT even entetaining offers that low. I have the opportunity to work with a few agents who list quite a few bank owned properties. In conversation they have mentioned that the banks right now are not even countering "low offers" . If they feel people are trying to make an offer that is substantially lower than the value of the home; even in it's present condition they will not even offer a counter to them.

i have sellers who will not counter offers that are not even justifiable in this market for what comparable homes have sold for. Then when you come back with a higher offer there is a bad taste in their mouths becuase you have insulted them with your inital offer and that can make negotiations even harder for you. The perception is you are trying to get a great deal; not just a good deal and you may not be willing to come to a fair value for the prorperty. So, why should they counter you with a reasonable price? You are going to try and get the home for subsantially less than they are willign to sell it for?

I had a seller who was so infuratied with an inital offer that he countered higher than the asking price. After a week of negotiations he said NO.... Two weeks later we received another offer on the home. They started a substantially more reasonable starting price. We agreed on numbers at LESS than we offered as a final and best offer for the previous offer. His reasonign was simple. They wanted soemthing for nothing and he felt that they were not negotiating in good faith trying to buy a home. They were trying to get a great deal that was not justified.

When you are considering puttign an offer in on a home; think about what you are offering. Is your offer price substantiated by the market conditions right now? Are the comaprables that have sold justifying your asking price? Or are you only looking to buy this home if you can get it for pennies on the dollar? Becasue if you are, you may lose out on a good deal. You also may not get the home you want.....

Dave dicecco
Realtor/Broker
www.davedicecco.com