So your home is for sale, and it needs work, and you are having a hard time selling it… Weeks, Months, years go by, and you haven’t had an offer, and then it comes… HOKIE SMOKES!! This guy just insulted you by offering some insanely low amount!! No wait, he didnt insult just you… He insulted your entire family all the way down to your great great grand-mama who jumped off the boat(Noah’s ark to be exact!), who had pocket change worth more than this offer…
HOW DARE HE!!!!!
Now you lay into your Agent for bringing you the offer, you get irked at the wife and kids, heck you even go off on the poor ole dog, just cause he prolly looked at the offeror wrong during the showing!!
Your first inclination is to outright reject the offer.. Heck, if tar and feathering were still options, you would consider that as well! It is WELL within your rights to reject that offer, and go on with your life, or you can take a deep breath and counter offer… Keep in mind, the offer that just came in, is better than the offer you had yesterday isn’t it?!?
Sometimes the only people that can buy your home are investors.. Most of the time, The investors out there are generally working with formulas that tell them how much they can offer. It’s called a MAO(Maximum Allowable Offer). Now they will start out lower than that MAO, but they will get to a point and just have to stop. It’s not worth your or their time to continue on. If your agent doesnt know whether they are an investor or not, you’ll get a feel for their stand after your counter offer. If you want 100k, and they offer 72k, and you counter at 98k, and they counter at 74k, then chances are you either need to meet near their price, or just discontinue the negotiations.. They are thinking the same thing!
Now that doesn’t mean that their aren’t people out there just making ludicrous offers just to see who bites. I personally have seen the first offer from a buyer come in at 60k on a 105k house, and then the buyers second offer comes in at 101k… HUH?!?! What just happened there… Needless to say, my seller took a deep breath and countered that first 60k offer, and the buyer changed their tune once they saw where the seller was at.. I gather the buyer figured the first offer would get the seller to drop close to his/her bottom dollar pretty quickly, and then when they didnt come much off the price, they decided to come up.
Most of the time, your agent should be able to figure out whether this is a retail buyer or an investor. Investors mean you no disservice by their offers. They arent trying to insult you, they are just working through their numbers… There is about a 1 in 20 acceptance rate on their offers, and they dont get emotionally attached to any of them. Although, I have on occasion spent hours trying to make a deal work, cause I was emotionally attached to a house…
If you are dealing with an investor, there is some things that might raise their price above the MAO.. I’ll save those for another thread…
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