What to do about a low offer?

Low offers are great to have. No this isn’t a typo, I genuinely mean it – however hear me out.

You see by embracing low offers or indeed any offer, it puts you in an incredibly strong position. When a new enquiry comes in and your estate agent gets asked ‘how’s it going’ and ‘any interest or offers so far’ – your agent is legally bound to be open and honest.

What do you mean?

By having a confirmed offer(s) on the table they can be much more forthright about your sale. ‘Yes Mr Jones we are in a really good position. We have had a couple of offers, which we have turned down and are happy to show you round’. By contrast, if you have had no interest or offers, then the conversation goes the opposite way. The interested party then thinks ‘what’s the problem’, even though there may not be anything.

This goes one step further when you receive a low-ball offer. Now most vendors often go off the deep end when an interested party does this. However I would always say to hold back and embrace the fact you have received an offer, regardless of the level involved.

Rule of three?

As I think of it, there is usually the rule of three when it comes to offers. Firstly, the interested party makes an opening offer. It is rarely about the offer amount and more about the basis of their offer – how reliable and secure are they. At this initial stage, they are simply waving their hand in the air and wanting to start a conversation. The key is exactly this and to keep the dialogue going. Secondly, they then make a step in the right direction and lastly it is fine-tuning.

Estate agent skills

Now let’s be honest for a moment, there will always be people out there who try it on and let them. Guess what, your estate agent will be the first person to tell you to decline it and you as the vendor, are always in the driving seat. It is now down to the skills of your estate agent to get them to make an improved offer. As an aside, I always say to my clients that if an agent can’t initially negotiate their own fee, how well do you think they will negotiate an offer on your home?

Good offers received?

Your estate agent is now in the position where they legally have a formal offer confirmed on the table. You both know that you will never accept such a derisory amount, however it is how one uses what could be construed as a negative into a positive. The agent is allowed to say that they have received an offer, but they are not allowed to say the amount. For example, the agent conversation would now go – ‘Mr Jones thank you for your enquiry. I just wanted to let you know that we have just taken an offer. I am trying to reach one of the vendors and I need to get you round. It’s a great property and it doesn’t surprise we have had interest’.

The estate agent has framed the fact they have an offer and made it into a negotiation tactic. Please remember of course that estate agents act for the vendor and to act in their best interests. They are on the other side of the fence to the buyer.

If you now overlay a commission rate for the agent that they would love to get, then the jigsaw all starts to make more sense.

Estate agency is all about psychology and the best agents will have the strategy and experience to drive the sale, whilst others still rely on slinging it online and hoping for the best.