For Sale by Owner News and Articles
Improving Low-Ball Offers
By Robert Irwin
What those who sell "by owner" want most is an offer on their property. All that effort writing adds, placing listings on the Internet, getting a sign, waiting at home, showing the property and more has as its goal to get a legitimate offer to purchase from a qualified buyer.
Yet, when an offer does come in, it sometimes can be disappointing. Instead of meeting your (the seller's) price, the buyers have low-balled you. They offer significantly less than you're asking.
What can you do? You don't want to agree to what you consider a ridiculously low price. Yet you don't want to lose this real buyer. How do you get a low-baller to better the offer?
I've found that the best way of improving a low-ball offer is to meet the buyers face-on and have an open and, if possible, reasonable discussion with them. The idea here is to carefully explain why your price is realistic and justified and why the amount they are offering is simply too low. Buyers are unlikely to be swayed by emotional outbursts. But, they can be convinced by logic and facts.
WHAT NOT TO SAY TO BUYERS
Don't tell buyers you want more because of all the money you've put into your house. Perhaps you've overbuilt for your neighborhood and nobody will pay you what you've put in. Remember, your house is only worth what the market will bear.
Don't complain that you have a big mortgage and you need more out of your equity in order to get into your next house. That's your problem and buyers could care less.
Don't tell them how much you love the house, why it's so dear and precious to you. Buyers may feel the same way about their cat, but it's not likely to get you more for your home.
WHAT YOU SHOULD SAY TO BUYERS
Do show them the comps for recent sales of similar homes in your area. If your house is priced right in there, it's the most reasonable argument you've got for sustaining that price.
Do explain the amenities of your neighborhood such as good schools, low crime, close to shopping, friendly neighborhood and so on. These are extras that buyers are looking for.
Do mention the exceptional features or extras of your home such as vaulted ceilings, new air conditioner, granite countertops in kitchen and bath, new carpeting and so forth. These pluses may make a difference.
MAINTAIN A DIALOGUE
Be reasonable, think of it as a business deal, which it is. When buyers see your logic, they may also see the value of your property and reevaluate upward their offering.
However, be prepared for hardnosed buyers. Some may simply admit they're trying to "steal" your home and won't pay a penny more. You'll have to decide whether to let them, or to walk away and look for a better buyer.
Others may simply not be able to afford to come up with more cash or a bigger mortgage. If they truly want your home, but can't quite squeeze into it, consider financing part of the purchase yourself with a second mortgage. (See earlier articles on seconds.)
Don't be overeager. On the other hand, don't be afraid to ask the would-be buyers to come up with more money. Also, when you come up against a "no," be sure you ask "why?" You can often find a solution that will satisfy everyone, once you know the buyers' true reasoning and motivation.
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.