How Low-Ball Offers Can Backfire
As a property agent in Singapore, I’ve seen my fair share of negotiation tactics. Buyers want to buy low, while sellers want to sell high. Today, I want to share a story that highlights the potential pitfalls of using low-ball offers when trying to secure your dream home.
THE ALLURE OF LOW-BALL OFFERS
In any negotiation, it’s tempting to start with a low offer in hopes of getting a better deal. Many home buyers adopt this strategy, believing that it gives them room to negotiate and ultimately save money.
However, when it comes to buying a home – a place where you and your family will create lasting memories – this approach can sometimes do more harm than good.
A MISGUIDED STRATEGY
Let me tell you about a couple who learned this lesson the hard way. After nine months of searching, they finally found their perfect home—a landed house in district 10. The house had everything they wanted, and at $6.6m, it was within their budget, too.
The seller’s agent mentioned that the seller was genuine. Hence, the price they listed the house at. Any offer near to the asking price would secure the deal.
The couple was the first to view the house and could seize the moment. The couple’s agent advised them that the house was indeed fairly priced. Since the house met their needs and was well within what they were prepared to spend, their agent advised them to start with an offer of $6.5m to show their sincerity. It would be a very reasonable offer that wasn’t far from $6.6m. They could quickly adjust upwards if needed.
The house was well within their grasp.
Against the advice of their agent, the husband decided to start low. With the property market moving sideways then, he felt the seller would be open to offers. This would be a good opportunity for the couple to turn a good deal into a fantastic deal. And if he failed, he could always offer higher along the way.
Excitedly, they instructed their agent to follow their instructions and present a $6.3m offer.
As agents, we can only advise our clients. The client always has the final say. So, the couple’s agent went ahead and presented the $6.3m offer.
FACING UP TO CONSEQUENCES
The seller’s agent was stunned when the $6.3m offer was presented. Seeing how interested the couple was, he had expected them to come back with an offer that was much closer to $6.6m.
And what did the seller think of the offer?
The seller was furious with the $6.3m offer. He felt insulted. He was genuine, but he wasn’t desperate. His pride took over.
I’m not going to sell to this couple.
Anyone but them.
District 10 seller
The couple realised their mistake and repeated multiple requests to meet the seller. They were even prepared to pay $6.6m, but they were turned down. They had effectively closed the door to buying their dream home.
The eventual price the house was sold for?
$6.5m. To a lucky buyer.
The couple was devastated.
THE LESSON LEARNED
The couple’s story reminds us that when it comes to buying a home, the focus should be on finding the right place for you and your family.
If you find a property that meets your needs and is fairly priced, don’t let the desire to win the negotiation overshadow your ultimate goal.
Make a fair offer that shows the seller you’re serious about the purchase and value their property.
Remember, your dream home is a place where you’ll build a life, not just a negotiation victory. Approach the process with respect and fairness, and you’ll be one step closer to turning that dream into a reality.
How do you normally negotiate?
P.S. This couple’s agent is my associate. I witnessed firsthand the emotional turmoil she went through as she tried her best to guide her clients. It was a painful lesson for everyone involved, but it underscores the importance of approaching home buying with respect, fairness, and a focus on what truly matters – finding a place to call home. The couple eventually bought their new home two years later.
WHAT BRINGS YOU HERE TODAY?
Are you wondering what to do in today’s market?
Perhaps you already have a clear mind of what you want to do?
In my blog, I often share stories of the challenges, triumphs, and lessons learned in my work as a real estate agent in Singapore.
Regardless of your situation, you can use me as a sounding board. I’ll provide perspective and clarity from my experience.