Oftentimes I hear purchasers stating that they are going to low-ball an owner, hoping to buy a property cheap. Is this a worthwhile negotiating technique ?
Such thinking presupposes that the owner is hard pressed and will accept nearly anything. This is generally not the case. If the list price is within reason and you offer 50 -70 % of the list price you will almost certainly antagonize the owner and the listing agent who represents the owner and may have had something to do with establishing the price. When and if the seller and or the listing agent become upset with your tactics you may find that they are virtually unwilling to negotiate with you on price or terms because they may consider your “low-ball†offer offensive. You may be giving the owner and his agent the impression that you think that they are totally uninformed about property values, or that the owner is desperate. As a general rule you will do far more harm than good operating in this fashion. Some of you may feel that despite this advice you will continue utilizing such tactics in the hope that you will occasionally steal a property and that is your choice. You should analyze several factors before submission of excessively low offers. Is the list price within reason ? Why is the seller selling-is there extreme urgency ? Do you feel that the seller is fully informed as to the value of the property ? Is the listing agent well versed in values and negotiating tactics ? If and only if you want to buy only at the low-ball price then fire away with your low offer and see what happens. More than likely you will receive a quick rejection, no counter offer and you will have engendered hostile feelings. Thereafter, if you change your mind and wish to submit a more reasonable offer you will find a seller who will be far less accommodating as a result of what he considers to be your offensive negotiating ploys. Many times I have heard sellers say that an offer is insulting, even though it may not have been. Sellers are human beings as are listing agents and they are influenced positively or negatively by the manner in which you operate. If low-balling is your chosen technique you will miss many good opportunities to purchase valuable properties at fair prices and professionals in real estate brokerage may make an effort to avoid doing business with you. Remember, if you really want to buy the property, do not alienate the seller or his agent with lightweight offers. If it matters little-low-ball away ! The choice is yours.
The preceding article is subjective and represents the professional opinion of author/ real estate broker, Larry Trunk
