Beaufort Home News: Lowball Offers are Wild Pitches in Real Estate Negotiations

A blog about buying and selling Beaufort SC real estate by Scott Bingham of BeaufortHomeTeam.com. It's just good clean fun helping people with one of the largest transactions of their life! Let me know what you think about the posts and how I can help you. Thanks!

Lowball Offers are Wild Pitches in Real Estate Negotiations

This was just such a great analogy, especially after I stayed up watching Game 6 of the World Series last night Epic game, even if the wrong team won.  Read on, and thanks and a tip o the hat Annie Holdreith!

imamanhassetrealtrLet's say you are a buyer and you have found a house that meets your needs and its listing price is in your financial comfort zone.  You have reviewed recent comparable sales for like properties.  You have established what you think the value of the home is.  You are armed with a pre-approval if you are going to seek financing or have copies of statements verifying liquid funds if you are paying cash.  You are ready to make an offer and open good-faith negotiations for the house.

Okay, so stop for a moment and think of yourself as a pitcher...a baseball pitcher.  Think of the seller as the batter at the plate.  The catcher's mitt is like the comps - the target you are aiming for.  Are you with me?

imamanhassetrealtr

Pitchers have more than one pitch.  Each pitch is used for a different strategy.  Offers are the same.  You can make a full-price offer with super strong terms - a fast ball pitch down the middle of the plate.  If a house is priced at market value and there is strong competition from other buyers, your fast ball is the best option.  And you may have to go over the ask...that is put a little extra on that pitch!

You can make an offer somewhere at the bottom of the zone of established value.  That is like throwing a slider or a breaking ball low and inside...if it is interesting enough (strong terms like a high percentage down, no mortgage contingency, waiving of inspections), the seller will take a look at that pitch and may swing (a decent counter offer comes back to you) or a check swing (no or low counter offer).

Or, you can combo up some strong terms with a sensible value price...that's like throwing a knuckleball in the strike zone and let the seller make contact.  Get the ball in play and see if you can reach agreeable terms and price for both sides.

imamanhassetrealtor

Lately, I am seeing too much of the dangerous pitch choice...the wild pitch.  Lowball offers are like wild pitches.  Wild pitches are so far out of the zone, the catcher doesn't see it coming, can't catch it and the batter is puzzled and trying not to get injured.  Same thing with lowball offers.  They insult the seller, confuse the agents about your motivation and there is no basis in anything concrete to support the offer.  Pitchers who pitch wild pitches get pulled.  The seller reacts the same way by making no counter offer and saying "NEXT!" and some other choice words I cannot type here.  Your wild pitch of an offer has set a tone for the negotiation and vicariously painted a picture of yourself as being opportunistic, or unrealistic or not serious.  If the seller is able to remain calm and let you make an improvement, you are lucky.  But the damage has been done.  You have left the door wide open for another buyer to come in and give the seller incentive to listen more closely to them as direct response to your lowball offer.

So, when you are ready to make an offer think of yourself as a pitcher with a choice of pitches.  AVOID WILD PITCHES.  Study your target.  Get that offer over the plate and give the batter something to look at and consider swinging at!  If you can put the ball in play, you are on your way to buying a house.

 

Scott Bingham

BeaufortHomeTeam.com

Ballenger Realty

Beaufort, South Carolina

843 321 9867

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Comment balloon 2 commentsScott Bingham • October 28 2011 11:20AM

Comments

Scott:  A great post, but I disagree with the author of the post on a few points.  It was mentioned by her that a low ball offer insults the seller and confuses the agents.  Yikes... sounds like this seller needs a different agent... one who knows what to do with one of those "nasty" low-ball offers.

A good agent will not let the low-ball offer insult the seller.  There are good ways to present it, and sloppy ways... which WILL insult the seller.  An agent like this needs some really intensive training on what to do with, and how to present a low-ball offer.

And... if this agent is also "confused" by a low-ball offer... perhaps more training, or perhaps even a different profession might be in order.

Sorry to be so critical of a fun post, but a good, experienced agent should NOT have a problem with a low-ball offer.

Posted by Karen Anne Stone, Fort Worth Real Estate (New Home Hunters of Fort Worth and Tarrant County) almost 6 years ago

Yikes!!  I think it was a light hearted analogy during the last games of the World Series, but your point is well taken.  Thanks Karen Anne

Posted by Scott Bingham, www.BeaufortHomeNews.com (BeaufortHomeTeam / Ballenger Realty) almost 6 years ago

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