The first step toward taking the sting out of a low offer is to assure your client that the offer is financial, not personal. Most likely the prospective buyers don't know your sellers or your sellers’ family. They might not even know the rationale behind the number they presented. They may have relied on poor counsel, too much counsel, or an unskilled agent, in which case a well-presented counter offer is in order.
On the flip side, the sellers’ house may be overpriced, either because the sellers insisted on a high price or because the market environment changed between when the home was listed and when the offer arrived. If a home is radically overpriced then a fair offer can look insulting when it really isn't.
If your sellers’ home is overpriced, you must get them to focus on the gap between the low offer and fair market value, not the difference between fair market value and their inflated listing price. Likely you'll remove tens of thousands of dollars of “insult" through this calculation alone. If that doesn't work, ask the cooperating agent to share the burden by helping to explain the rationale behind the offer.
A good agent won't write an insulting offer. I was asked many times to write ridiculously low offers. I consistently refused to represent those on the equivalent of a fishing expedition. One client chastised me, saying I was required by law to write whatever she wanted to offer. I corrected her misinterpretation of my responsibility. Agents are required by law in most states to present all offers they write, but nothing forces agents to write garbage that is embarrassing to present and wasteful of their time, and costly to their reputations.
Getting beyond emotion
People get emotional during the closing for a number of reasons. For one thing, money is at stake. For another, both parties are anxious to get the deal done and time is ticking away. For a third, home inspections and low-price offers reveal opinions about a home's value that can feel jarring to sellers who have viewed the home with pride and joy for a number of years.
The only antidote to an emotional uprising is a pragmatic focus on the goals the parties are trying to achieve and a renewed commitment to find common ground and get the deal done.
A few years ago, my father sold the family home I grew up in. My mother had died six months earlier and he wanted to start a new life.
Fortunately, I didn't represent him in the sale, but he did call to discuss an offer he'd received. I took his call one night and we talked for 45 minutes while I was driving through mountain passes on my way to a speaking engagement in Vail, Colorado. (FYI, I would never talk with anyone but my dad for 45 minutes about a contract. )
He was such a typical seller! His big issue was the sales price. I asked him the question I often pose to get to the core of what's affecting a sale negotiation: “Dad, is the reason you want this price for the house based on your ego or do you really need the money?" There was silence on the other end of the phone. Of course, I knew he didn't need the $20,000 he was so emotional about.
From that point, he was able to find common ground with the buyer and get the home sold.
When you hit a buyer-seller impasse, find a way to ask: Is this about ego or income? Do they want the bragging rights that come with a high price, or do they need the money? Usually, you'll bring your client back down to earth in a hurry. You're asking, in essence, what are you really fighting for?
Dirk Zeller is an Agent, an Investor, and the President & CEO of Real Estate Champions. His company trains more than 250,000 Agents worldwide each year through live events, online training, self-study programs, and newsletters. He's the widely published author of Your First Year in Real Estate, Success as a Real Estate Agent for Dummies®, The Champion Real Estate Agent, The Champion Agent Team, Telephone Sales for Dummies®, and over 300 articles in print.
Real Estate Champions is a premier coaching company. Training covers a wide spectrum from new agents, to seasoned, as well as those interested in real estate marketing or real estate investing.
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