Tuesday, December 2, 2008

The Low Ball Offer

Reposting an oldie but a goodie. And given the current market, this advice is even more topical than when I originally posted it.

You love your house. But you must sell. You primp it, paint it, stage it, hire a brilliant Realtor and list it for sale at a price you think is fair. And then IT happens.

angry-boy.jpgYou receive an offer that's SO LOW that you can't remember the last time you felt so INSULTED!   (#$&*^%#!!!

Stop. The most important thing to remember in a strong buyer's market like the Valley's in right now is this --- you MUST counter every offer received (if you can't accept it outright.) Do NOT reject that insultingly lowball offer out of hand.

The second most important thing to remember is that your Realtor is bound by law to present every offer s/he receives on your behalf. Even the insulting ones. Do not shoot the messenger.

Whatever you need to do to get over being insulted, hurt and angry, go do it. Please! I'm begging you! Go beat up a tree. Scream into your pillow until your throat resembles roadkill. Run a marathon. Take Michael Flatley Lord of the Dance dancing lessons until you finally lose those last pesky 10 pounds. If you must scream at your Realtor, do it.

Whatever it takes, get over your anger. Then, sleep on it, and do what one of my teachers Michael Valenti calls "the head on the pillow" moment. When you lay down that night with your head on the pillow, and it's just you and your conscience (or possibly a spouse or beloved pet) think about what number will actually give you peace of mind. The lowest number which you could look back on and feel good about 5 or 10 years from now. Imagine the number that will allow you to move on with your life, happily decamping to your new home. Because quality of life is infinitely more important than holding out for the last few dollars on your sale. And 10 or 20 years from now, you will not remember exactly how many dollars you held out for. You'll only remember the miserable extra months you had to stay in a home which you no longer wanted.

One more important point while your head is on the pillow. STOP thinking about what your neighbor sold for. STOP thinking about what the other neighbor is now asking. STOP thinking about the advice well meaning friends and colleagues have given. STOP thinking about anybody but you and your family and what sale price would allow you to move on with your life and future plans. What your neighbors did or might do, and what your extended family, friends and coworkers think you should do are actually quite immaterial here. This is a moment for you and you alone. Relish the you-ness of it.

The next morning, call your Realtor and apologize for those names you called him/her. Then calmly take pen to paper and write out a counteroffer with the number you imagined last night.

This won't work every time. Investors look at houses differently than most of us. They have zero emotion tied up in a purchase. Your counter will meet the investor's bottom line or it won't. Best case scenario - you've got a deal and can go begin the serene new life you imagined last night. Worst case scenario - well, it's still OK. You've imagined the worst that could happen - accepting the lowest offer you can afford, and you still emerged on the other side with a happy image of moving on.

If there's no deal -- I suggest calling your Realtor again. Ask him/her to readjust your list price to a whole lot closer to your newly imagined bottom line. You'll be calling the movers before you can say "negotiation".happy-boy.jpg

Related Post--Chris wrote about this very topic earlier this year, maybe his take on it will sit better with you if you're in this situation