For Sale by Owner News and Articles
Broker's Low-Ball Offers
By Robert Irwin
You've spent a lot of effort writing ads, placing listings on the Internet, getting a sign, waiting at home, showing the property and more. And now, an offer finally comes in. Time to celebrate!
But wait. The offer comes from an agent who is representing a client. The first thing that agent wants is for you to sign a one-day listing that says you'll pay a commission, if you accept.
You think about it. The agent wants 2.5 percent of the selling price, half the full commission of about 5 percent that's common in your area. You might agree, figuring it's worth it to move the home. So you sign... and the agent presents the offer. Only it's for tens of thousands less than you're asking. What do you do now?
GETTING THE AGENT ON YOUR SIDE
Unlike dealing directly with a buyer, the agent, presumably, has lots of experience in presenting offers and knows how to size up sellers. She is looking for signs of desperation, that you feel you must sell at any cost. Thus, rather than admit that you really need to get this house sold because you've got a job change coming up (or whatever), you instead calmly explain to the agent why you can't accept this low offer. You might say:
The recent comps (other similar home sales) justify your asking price, assuming they do. Remind the agent that she knows (or should know) this.
The home is in great shape and in an exceptional area of low crime and good schools (if it is). Again remind the agent that she should know this.
Finally, point out that you do want to sell and are willing to compromise somewhat on the price (if you are). Point out that the agent also wants a sale, else there's no commission. Thus, it's to the advantage of both of you to come up with a price that's fair to both you and the buyer - obviously a higher price than what's offered.
ENTER THE COUNTER-OFFER
At this juncture, if you're convincing, the agent will decide that you're not going to accept the low-ball and will probably start working on a counter-offer, one that you'll make to the buyers. (Assuming they really are interested in your house and aren't simply trying to "steal" it.)
Work with the agent, but remember that though you're paying her, she probably still represents the buyers (she'll declare who she represents), so don't give away any secrets. Also remember that the agent may have a very good idea of how high the buyers might go. She may, in fact, simply tell you this! You'll have to decide if it's high enough for you. If it's not, your counter-offer will be higher still... and it will be the agent's job to get it accepted. She, in effect, now will be pushing your price!
Don't expect to win... or lose, on the first round. Countering may go on for some time before both there's agreement on the price, if there is. Just remember to keep your own counsel and try to avoid selling your home for less than you want.
Robert Irwin is the most prolific real estate writer in America having produced over 100 published books in the field. His TIPS & TRAPS McGraw-Hill series has sold well over a million copies and his FOR SALE BY OWNER KIT and FIND IT, BUY IT, FIX IT and other books have been strong sellers for Dearborn.
In addition Irwin writes a regular real estate column for The Wall Street Journal online and is introducing a new weekly column forOwners.com.
Irwin has sold his own property "by owner" and during over 30 years in the business has been a broker and consultant to lenders, agents, buyers and sellers.
He can be reached through his website RobertIrwin.com.