Low Ball Pitfall

Everyone wants a deal. As a consumer, you want to know that you have gotten the best possible price for the best possible product within your budget. It's easy to think that the lower you offer in the beginning, the lower the final price will be after it's all said and done. In real estate this is not necessarily the case.

Before going into any negotiation, the consumer must fully understand things like market value, current trends, historical data, neighbourhood statistics... Thinking that a low-ball offer is going to fly without this information is like boarding a rubber dingy in a storm without a life jacket or paddles. Education and experience is key.

When determining what to offer initially, you have to take into account many factors. The most common thing I hear is that "I only want to spend XX amount". While it's good to keep within your budget, a homes value is not dependent on that. Also, looking at properties outside your budget, hoping for a deal is setting yourself up for frustration.

Initial offers that are too low start the negotiation process off on the wrong foot and may insult the sellers. When you insult the sellers, they in turn don't want to negotiate with you. Therefore rather than being reasonable in their counter offer, they send back a number reflecting their bruised emotions. Remember that most sellers have sentimental feelings about their property and will react emotionally to what they feel is an insult.

On the other hand, if you come in a bit higher right off the bat, the sellers are excited for a reasonable outcome and are far more willing to 'play nice' with you, in turn countering more reasonably and the buyer gets a better price. In order to determine where that fine line between insult and excitement, the buyer needs to be educated and prepared. That's where I come in!

Although this is a pared down recap of the process, I have found it to be very reliable in most situations. Depending on the specific property, many other factors can come into play that need to be considered before drafting an offer. Call me anytime to discuss the specifics of what you want as a buyer and we can tailor a plan of action just for you! 902-680-2736