by Stuart Neal
on Friday, September 25th, 2020 at 12:21pm.
Covid 19 has impacted our market in many ways. Since March when the COVID 19 pandemic entered our lives, we have seen many potential home buyers commit what is perhaps the most fundamental mistake.
They make low ball offers. The media has been buzzing about the economy here in Edmonton and it must have convinced some home buyers that they have much more leverage to negotiate than they actually do. Fact is, home values here in Edmonton are climbing. Sales values dropped markedly in March and April. Since that time, home prices have risen steadily and are now selling for 2% MORE than this time last year.
Here are 3 potential outcomes you risk creating when you low ball:
1. It destroys seller goodwill
Getting the seller to like your offer is part of the battle. If you are buying a home rather than an investment, chances are that it is, or was recently the seller’s home too. They might secretly still want to live there or have many fond memories of the home. Insulting the seller with a low offer is the quickest way to destroy any goodwill between you and them. Which brings me onto my next point.
2. It leaves the door open for other buyers
Sellers rarely get what they want. However, if your offer is way off the mark, you simply lay the groundwork for another buyer that may be hovering around the same house as you. The difference is that the second buyer did not upset them. The second buyers offer may only be marginally better than yours, but as it did not come from you, the seller may be more willing to compromise.
3. Counters may come back much harder
Let us suppose for a second that there is no second offer. Because the seller received your offer so badly (in almost all cases) if you are lucky enough to get a counter, it will likely be much higher and perhaps even at list price. On the other hand, if your offer had been more realistic and respectful, they may have been willing to be reasonable.
If you are sure that the home you want is overpriced, what should you do?
You have 3 options:
1. Do plenty of research and make sure that the research accompanies your offer