The Valuable Low Offer
Okay — I’ll admit it. Sometimes I really, really hate when I receive a low offer.
The first thing that comes to mind is: What were they thinking?
Sometimes I even get angry (sellers are sometimes insulted). But then, I quickly give myself a reality check and am reminded of how sometimes — well, most times — a low offer can be extremely valuable. Here are six reasons why:
1. Any offer will make a seller or landlord think harder about selling or renting (a little extra focus is good). Sellers and landlords like offers — not necessarily low offers as they often want to dismiss them as insulting — but ONE offer is still better than no offers.
2. Low offers are often negotiated up. I’ve once had a super low offer at 35% below the asking price that eventually closed within 5% of the asking price. This happens more than people think.
3. An offer — even a really low offer — may give you better insight to true valuation.
4. I’ve said it before (in this blog post) and I’ll say it again. A low offer is still an offer. And considering it allows you to send a message to other prospective buyers and renters that there is some serious interest. Something that markets often miss is a sense of urgency. Knowing that you may lose out on a property is the single most important driver of decision making.
5. Low offer after low offer may send the message that a property is overpriced.
6. Numerous low offers can lead you to ask all bidders to submit their best and highest bid — auction style. This could ultimately be the strategy that dictates what the market is willing to pay.
So, if you’re a seller and you receive a low offer — don't fret! Strategize. And share that strategy with your agent (hopefully me) and try to use that low offer as the catalyst toward making a deal.
It might just work!