Your Buyers Agent Can Help You Get the Best Deal While Avoiding Pitfalls of a Low Ball Offer
We have been talking alot about negotiations, seller patterns and what to expect during negotiations. A common misconception is that during a down economy, sellers will accept really low offers. With the help of your buyer’s agent, you can make the lowest reasonable offer, get a great deal on your home, and avoid the pitfalls of a lowball offer.
Negotiation Strategy: Too High or Too Low?
I enjoy playing the occassional game of poker, and I think its a good real life example of the strategy of negotiation. In practise, we negotiate every day without thinking about it (in our house, any time I ask my husband to do me a favor can feel like a negotiation process. Unless we settle it wiht a game of pool.) When it’s your turn to bet, there is always the same dilemma- if you bet too low, you risk earning a smaller pot than you could have. But, if you bet too high, you risk losing everything by scaring away the other players.
It is similar with home negotiations, though the stakes are much higher. (I guess that depends on what kind of poker player you are…) If you make an offer that is much lower than the asking price, or unattractive for other reasons, you just might lose the house altogether.
Here are some things to consider before making a lowball offer.
The seller won’t think you are serious.
It is typical during negotiations to submit an offer, receive a counteroffer, and hopefully come to an agreement that works for everyone. But, if you submit an offer that is unusually low, the seller may determine that you are not a serious possibility and ignore your offer, deciding it is not worth pursuing an agreement. When you have found a home that you really love, this can be devastating.
The seller receives a better offer.
Another potential pitfall at submitting an unusually low offer is that another potential buyer submits a better offer. This can be very common if the home is particularly attractive to buyers- either because it is a very desiribale location, or maybe it is priced low to sell quickly.
Carefully consider your buyer’s agents advice duirng negotiations.
As professionals, your buyer’s agent has incredibly useful experience and knowledge. They are able to recognize unusually good deals, and inform you that a particular home is going to be attractive to other buyers. If you are serious about the home, take your agents advice to make a timely and reasonable or attractive offer, or risk losing the home altogether. Your agent will be able to examine comparable home sales to determine the current market value of a home in order to help you make informed decisions during negotiations.