Are You Equipped to Handle Low-Ball Offers in this Real Estate Market? Part II of II

As a local Realtor with Coldwell Banker and a Certified Negotiation Expert (CNE), last week I shared a few tips in a blog post titled “”.  

This week, I am back posting Part II and sharing some more helpful tips on how to deal with a possible low-ball offer on your property in this real estate market.

Tip #3 Do not ignore an offer, counter regardless how low

Some negotiators suggest not responding when an offer seems out of line in order to make the point that the offer must be increased considerably.  The risk you take, however, is that the buyer may become confused about the sellers motivation and walk away.

The goal is to keep the lines of communication open, so it is important to come back with something, anything.   It doesn’t cost anything to make a counteroffer.  If the house is listed for $550,000 and the offer is $500,000, the seller may want to counteroffer at $545,000, just to see what the buyer is going to do. You may be surprised by how many buyers come up considerably the second or third go around – you just need to get them there. 

Tip #4 Pay attention to the next move, it will be revealing

In the example above, the next move can be revealing.  One of the signs in negotiations is how much of a move the other party makes. In general, the smaller the move, the closer that person is to their goal. 

Take the aforementioned counteroffer of $545,000.

• If the buyer responds with $505,000, it can be interpreted as the buyer not having much price flexibility.
• If the buyer responds with $520,000, that's a big move. If the countering continues but the buyer goes up only to $522,000, they are likely near their limit.

Tip #5 Be willing to have the buyer’s Realtor present the offer in person

Sellers sometimes prefer to have the offers presented by their listing agent. However, if the buyers’ agent tells me that they are going to present an offer on my listing that's significantly below the asking price, I usually require that the other agent present that offer in person to my clients.

If it's a true “low-ball” offer where the buyer is just fishing for a price and the agent knows it, it might speed things along if the agent's presence is required rather than just faxing the offer. The buyers’ agent will likely say, 'let me get back to my buyers’.  It's called a problem transfer.  We take the problem – the low-ball offer -- and transfer it to the buyers’ agent.  Often times, that $500,000 offer has turned into a $520,000 offer by that evening without even starting negotiations. This does work.

Since taking this course of action, I enter negotiations better equipped and achieve better results for my clients. As a Certified Negotiation Expert (CNE), I have a valuable competitive advantage that helps to differentiate my services in the real estate marketplace. 

My prediction for 2012: CNE agents will be the most in-demand Realtors in their local markets.

To read Part I of this blog, posted last week, click .