Not long ago, I submitted an offer on behalf of some very good buyers I represent. These are dream clients-very well qualified, fun, and sincere. We’ve been looking for longer than usual, but that happens sometimes. The area they like has some nice stuff, but much of it is overpriced. None of the houses they have seriously considered but ultimately passed on have sold yet. All they want is a house they love in good condition at a price they feel is justified. It is a big buyers market here right now.
On the home they made the offer on, we went back for a second look and ran market activity in the area prior to making the offer. Based on our research, we decided to make a respectable, but not full priced offer: over 91% of asking price. In a market where it is not unusual for buyers to offer far less, we expected a counter offer. Instead, the listing agent (I should add that the owner is an agent also) responded that the owner would not make a counter unless we raised the offer.
This was unwise, and I told the agent that it would send a wrong message to my cash buyers to not at least give us a counter offer when we were above 91% of the asking price. After some back and forth, they got the owner to get us a counter offer. After a short negotiation, we had a meeting of the minds at 96% of asking. This will be the 3rd or 4th deal in the past 6 months where the seller initially wanted to simply refuse the initial offer that tuned into a deal, and in all the cases the brokers were able to convince the seller to make a counter instead of a refusal. In all of those cases, the counter offer prevented the deals from being stillborn.
It costs nothing to make a counter offer to what may be perceived as a low offer from qualified buyers. You have everything to gain and nothing to lose by making a counter offer, even if the initial offer seems insulting. Buyers don’t want to have their offers taken personally. They want to do business. Even if a seller feels slighted by a “lowball” offer, they should still keep a stiff upper lip and negotiate. Personal feelings can kill deals. Moreover, if you insult a buyer in this market, you run the risk of having to wait a long time to sell. I have seen several cases where that initial “insult” offer seems like a dream 6 months and three price reductions later.
Often, the first offer is the best offer. It may not be to your liking, but all buyers should be taken seriously in the time we live in. You never know what possibilities exist if you kill the deal in it’s infancy. Always answer with a number- never refuse.