Recently I saw a blog on Active Rain title ‘An Offer is Not An Insult’. I tend to agree with that.
When buyers especially submit an offer in writing, and customarily also submit their proof of funds for the down payment, and a pre-qualification letter, it’s usually very serious that they want to start negotiations on a home. Just like you I watch all the HGTV/Bravo shows (many of the agents on there I know professionally or have met, and speaking from experience what you see on TV ain’t necessarily real life here…) I see all the hullybaloo over all the people who are grossly offended by what they consider ‘low’ offers and urge their (TV) agents to go back and ‘play hard ball’ with the buyers. But let’s stop and think….and let me share with you sage advice my Dad always told me….”It’s only worth what someone will pay you for it.”
Most often its a start to negotiations-in my past I have had clients go back & forth so much to sweat out some small minituae of detail to feel like they have ‘won’ over the other side. But truly in negotiation you have to realize that both parties have to feel they won in the deal, and as I got older I learned alot of this was just plain old EGO getting in the way. I wished I had learned that lesson early on…but still grateful that I did learn it. The negotiations don’t stop there….there can be further negotiations over repairs and even appraisals. I once got a $40,000 reduction in price when a large ranch property was determined to have needed a brand new septic system-a very costly expense a buyer isn’t likely to want to spend. Carpet paint and all the things that are tangible are easier for a buyer to swallow then a subterrean problem or a system replacement.
Years ago when I worked with a REO agent (a broker who is hired by the banks to sell Bank Owned foreclosed properties) we often encouraged the buyer’s agents to submit ANY offer; we felt that if the banks (sometimes) had over priced the home in our market we could use those as collateral to get a price reduction. This was often true. Again, the buyer’s are willing to pay for something they feel is fair market value….its only worth what someone will pay you for it!
Tripp Jones Real Estate for Santa Clarita and San Fernando Valleys, Call 661-733-4555 or 818-527-6292