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An emotional attachment can make it more difficult for a seller to set a realistic value for the property and for a buyer to negotiate a lower price, said Carol M. Frohlinger, a negotiation expert based in New York. "They fall in love with a property, then it makes it impossible for them to walk away," she said.
The trick to a successful lowball offer may also be in the presentation. "The way to phrase it is: 'We really love the house, but we couldn't afford it at that price. This is what we could afford. We know it's way below what you're asking, but would you consider it?' " Frohlinger said.
That will leave the seller with a different impression than if the potential buyer complains about odd color choice, outdated fixtures or an inconvenient floor plan. "It is the way you make a lowball offer as much as the number itself," Frohlinger said.
Agent Daniel Odio said he encourages clients to make aggressive offers, for several properties in quick succession, looking for a seller who is willing to negotiate. "You never know how a seller is going to react to an offer until it's in front of them," said Odio, founder of DROdio Real Estate in Alexandria. "Listing prices are fictional, especially in this market."
Yet some real agents argue that thrifty shoppers may have already missed their opportunity for a deal or may have unrealistic expectations. Prices in some neighborhoods have remained stable despite the national downturn, while deep discounts have disappeared in other neighborhoods, they said.
If there is competition for the property or it is already listed at a discount for the neighborhood, buyers risk losing a desirable home with a lowball strategy, said Danilo Bogdanovic, an agent with Market Advantage Real Estate in Loudoun County. "Buyers are more concerned with getting the best deal than they were before," he said. But "it's not a blanket policy," he said. "You can't go out and lowball every property."
Home shoppers should develop a strategy that entices sellers to enter negotiations, giving them time to gather information about the seller: Is there a deadline to sell the home because of a job transfer? Has the seller already purchased another home and must sell this one to complete the deal? Have there been other offers?
"I would recommend that you never make an initial offer that the other party accepts," said Steven Briggs, a management professor at DePaul University who teaches a course on negotiation skills. "If they do, you have paid too much. You want the process to go back and forth."
A savvy buyer could also include other potential sticking points that will give both sides more than the price to negotiate, Briggs said. Buyers could request a home insurance policy for appliances or that someone selling a condo provide six months of the association's board minutes. Those are issues on which the buyer could be flexible during negotiations, he said.
"Don't get yourself into a situation where you are only arguing over price," Briggs said. "Make sure there are a lot of issues, so you have other things to haggle over."
After a buyer makes an initial offer, the seller can reject the bid completely or make a counteroffer. When responding to a counteroffer, buyers may give away hints about the flexibility of their price range if they are not careful, said Linda Babcock, a professor of economics at Carnegie Mellon University.
"If you bid $400,000 for something and your next bid is $450,000, that says one thing. But if you go from $400,000 to $405,000, that tells the seller something else," Babcock said. "Remember, the seller is trying to read you, too."