💰It’s Okay to Make Lowball Offers Sometimes
Happy Monday!
Here is an Idea, an Action, and a Question to consider this week.
Idea
Making aggressive offers can be a concern for some agents, who worry about offending the listing agent or seller. That’s just an excuse to operate outside of their comfort zone.
Most people understand that a low offer is just part of the business and do not take it personally. They can choose to either accept, reject, counter, or simply just not respond at all.
This is why I have no problem making aggressive offers, but it's important to have a strategy in place to support your offer.
First, you need to build relationships with other local agents as much as possible. The better relationships you have, the more they’ll listen when you make an offer even if it’s low.
Second, even if you don’t have a relationship, you should always try to justify your low offer. Otherwise, the likelihood of your offer being accepted is almost zero.
For example, I helped one client purchase a triplex a handful of years ago. The asking price was $240K. Our offer was significantly lower at $170K. However, I approached the negotiation humbly, explaining to the seller why our offer was so low. I pointed out the work that needed to be done and provided a detailed estimate of the costs involved. I also noted the rents they were advertising and highlighted how they simply didn't justify the investment at their asking price.
The seller came to understand our perspective, and we were able to negotiate a mutually agreeable price. During the formal inspection, we found unexpected damage from incorrect siding installations and water penetration. I took the lead and informed the listing agent that we had to renegotiate and bring the price down to $120K. Because I backed up my request with solid reasoning, the seller was able to see things from our perspective once again, and we successfully closed the deal. ($120K closing on a $240K asking price!)
You don’t get great deals by simply making a super low offer. You truly add value by also having strong relationships with other agents and being able to discuss your thought process on pricing and any potential creative solutions to get a deal done.
Action
The next time you make an aggressive offer, provide strong reasoning to support it. Clearly outline the reasons behind your offer. Just like a lawyer defends their client, backup your price with detailed facts and figures.
Question
Do you shy away from aggressive offers?
See you next week,
Matt “Roar” Gardner
Real estate investor-agent, Author of Supersonic Real Estate: Light Your Afterburner to Accelerate Your Investor-Agent Career (Coming Soon!), and keynote speaker.
PS: A real estate agent who doesn't invest is like a pilot who never flies. Don't be that agent! I'm living proof that you can start from scratch and build a strong investment portfolio that earns money even while you sleep. Just a few years ago, I was a pilot in the Air Force with no real estate experience. Today, I have a robust portfolio that supports my family and my retirement. And if I can do it, YOU can do it.
