Low-Ball Offers
Picture this scenario: a person is trying to sell their home after they had made the necessary renovations needed to increase its market value. The real estate market is moderately more advantageous for buyers. However, homes in the person's neighborhood have been selling well and with relative ease for the last six months, so the home seller is not worried. Finally, the home seller has found a prospective homebuyer who seems to want to buy the home. A rapport is made between the two and the home seller is convinced that this home sale will be relatively easy. However, once the negotiation begins, the home seller receives the homebuyer's offer, an offer that is significantly lower than the asking price. The home seller is understandably upset and thus begins a tense negotiation period.
Why Make A Low Ball Offer?
Unfortunately, this scenario is a common one. While negotiating a price for any product, the natural goal is to obtain a price that is advantageous to you. For homebuyers or anybody purchasing a product through negotiation, the easiest way to make this objective clear is by making a low-ball offer. Relating to real estate, a low-ball offer is simply a description of an offer for a home that is substantially less than the asking price.
For some individuals, this strategy is an effective way to purchase a product for a product that is advantageous for them. However, in many situations, a low-ball offer can sour a prospective sale and dissuade the home seller from negotiating with the prospective homebuyer. It is important for home sellers that receive a low-ball offer to take it in stride. For the most part, this low-ball offer will be rejected and usually the homebuyer is aware that this would be the case. By refusing the low-ball offer in a calm manner, you will be able to filter out prospective homebuyers whose main concerns are about price and not about the quality of the home.
When Is It Right?
However, there are instances where a low-ball offer is justified. This is in situations where a home seller has drastically overpriced the value of their home. These circumstances can be avoided if the home seller makes the necessary research in comparing prices in their neighborhood and therefore determine a suitable asking price. In cases where the home seller is offering an extravagant asking price, they should be prepared to receive many low-ball offers and deal with prospective homebuyers showing very little interest if these offers are dismissed.
