by Neil Jenman
Reading Time: 3.5 mins
When you are selling your home, you may receive offers. Indeed, offers are almost part of the pre-sale process.
But there is one common type of offer that you must always refuse.
Most agents – especially incompetent negotiators (which is most agents) – encourage buyers to make offers. These agents think the fastest way to sell a home is to cut its price. It’s not their money, what does it matter.
When you’re selling your home, the price matters a lot.
Being a home-seller can be lonely. It feels like everyone wants your home cheaply. Agents telling you to lower your price. Buyers give you low offers.
And, of course, both – agents and buyers –want the secret you should never reveal: The lowest price you’ll accept.
Protect your lowest price like the password to your savings account. Don’t hand it out.
But be careful.
Agents and buyers have another way of discovering your lowest price.
It’s done with offers; in fact, one common offer. And this is the offer you must always refuse to consider.
Many names could be given to this type of offer. At worst, it could be called the dummy offer, the fake offer, the ‘try-on’ offer. At best, from well-meaning buyers, it could be called the not-too-serious offer.
Whatever you call it, this offer has one way to recognise it: NO MONEY.
It’s nothing more than buyers saying, almost off-the-cuff, “Tell them I will give them $X.”
No offer should be considered by home-sellers unless it is serious.
And serious offers come with money. The more money, the more serious the offer. Of course, the opposite it true – low or no money means a less serious offer.
Here’s the danger for sellers: If an agent tells you that buyers want to make an offer, your first question should be, “How much money have they put with their offer?”
Most agents will say the buyers have paid no money.
In which case you should say, “We will not consider any offers unless they are accompanied by a large deposit – and perhaps even a signed offer (on the contract).”
The agents (especially weak negotiators) may reply: “If you accept the offer, the buyers will pay a deposit.”
No way. That’s the danger. It’s a trap.
Here’s how it happens, so many times.
Let’s say you want to sell for $1.5 million.
The agent says a buyer has made an offer of $1.1 million.
Being inexperienced, you don’t ask about the seriousness of the buyers. You just think an offer is an offer.
And if you think about this offer and agree to accept it, here’s what often happens.
The agent tells the buyers their offer has been accepted. The buyers reply, “Okay, well now we know they will accept $1.1 million, we have more homes to see, so we’ll call you if we are interested.”
Suddenly, everyone in the district knows that your home – for which you want $1.5 million – can be bought for $1.1 million. Or less.
Now yes, buyers may still change their minds if they pay a deposit with an offer. After all, nothing is certain in real estate until contracts are signed by everyone.
But which buyer is more serious – one who makes an off-the-cuff offer with no money or one who gives a cheque for ten per cent of the offered price as a deposit?
And for those agents who might be reading this, here’s how to obtain a deposit with an offer – and, at the same time, qualify your buyers. Tell buyers that you like to have a large deposit with offers. If the buyers say they will pay a deposit if their offer is accepted, you say: “Mr and Mrs Buyer, which way will make the sellers more likely to accept your offer: A large deposit or no deposit?”
Serious buyers will quickly see the sense of paying money with an offer.
And agents, one thing’s for sure: When buyers give you money, they’ll be back.
Do not consider any offers unless such offers are accompanied by money.
Do not let agents and buyers discover your lowest price with their “joke-offers”.
Here’s something else that often happens: When buyers enquire about a home, many ask: “Will the owners take an offer?”
Of course, a good agent – one who’s learned to negotiate – will say: “Why discuss offers on homes you haven’t seen? If you see it and like it, then we can talk about price.”
Finally, another good point for sellers: If an agent brings you offers with a deposit, not only will you know the buyers are serious, but they are also more likely to increase their offer. You see, once someone pays money, a psychological factor kicks in – they feel like owners.
What we are really talking about here is what many modern agents have forgotten or never learned. It’s called “Selling skills”.
Good salespeople are good negotiators.
When good negotiators bring you an offer, they bring a serious offer. They bring you money.
If not, then use that famous negotiating line from the movie (Jerry Maguire) where the athlete tells his agent: “SHOW ME THE MONEY!”
So that’s it: Another golden rule to protect your home’s price: “Offers without money are offers you must refuse.”
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