Real Estate Marketing Specialists

Dear Buyer: How NOT to Make An Offer on A Home

Dear Buyer: How NOT to Make An Offer on A Home

Subtitle:  How To Antagonize A Seller in One Easy Step

Step 1:  Submit a lowball offer.

  • After your Buyer’s Agent has advised you, “All the comparables indicate that this is a great price.”
  • After the seller has reduced the price by $30,000. (10%)
  • In a seller’s market
  • When there is great interest in the house
  • When prices are appreciating

This is what will likely happen when you submit a lowball offer:

  • The seller will more than likely be insulted
  • The seller will probably be antagonized
  • The seller may choose to not hold back on colorful language when venting to their agent. (which is ok, we can take it!)
  • The seller will most likely ignore your offer.
  • You should probably consider this the “scorched earth” method of making an offer, and move on.

I understand your reasons… at least I understand what you are thinking:

  1. I can’t afford to pay the list price and also do all the upgrades that the house “needs”.
  2. I’m at the top of my budget.
  3. I just don’t think the house is worth that much.
  4. I read somewhere (someone’s blog?) that I should be able to get a home for X.

The above scenario is a true story. The truth is also that none of the above reasons have anything to do with market realities.

How To Determine True Value

determine the true value of a houseWhen you are evaluating a home to purchase, the market value is very important. That value is determined by what buyers are willing to pay, based on comparable homes in the same market. If you want to do updates to make the home suit your tastes, or if you want to add a deck or a fence or other upgrades, that is a very subjective issue and does not affect the market value. You must determine if you have the funds to pay for those upgrades yourself.

The Seller’s Mindset

If the seller has reduced the list price, it is already an indication of their mindset and motivation. When a seller lists their home, they often are trying to find the true value of their home within a range, and making price adjustments based on feedback from buyers and other agents, with the help of their listing agent. If they’ve already made adjustments to the list price and their home is placed correctly in the market, then a lowball offer is insulting.

Emotional Stamina

If a buyer is at the top of their budget, then they need to look at houses in their price range. By looking in higher price ranges, you run the risk of being outbid, or of writing more lowball offers. You will waste time and energy, not to mention emotional stamina. And you will probably antagonize people, truth be told.

Don’t make the mistake of underestimating the effect of the emotional state of a seller in a real estate sale. Nor should you ignore your own emotional stamina as a buyer. This is where an experienced buyers agent and listing agent will be valuable, taking much of the emotional stress off of your shoulders. Remember, agents negotiate every day, 365/7.

“You can decide to use your agent as a trusted adviser, or as just a useful idiot.” 

How to Make Sure Your Offer Succeeds

In the interest of a positive end to the subject, here is another true story about a successful purchase:

After much looking, our buyer has found the home she loves. It’s probably the only one which meets her criteria. The home is priced at $225,000, after a price reduction. This is a fair market value, based on the comps and the market. As the market is tight, with low inventory, prices are on the rise. This home will not sit for long.

Our buyer’s maximum budget is $222,000, with closing cost help. Instead of starting at $217,000, giving herself “negotiating room”, we advised her to offer her maximum, letting the seller know it was her maximum. There is a possibility that she will be outbid. There is also a possibility that the seller might hold out for a better offer.

If our buyer had come with a lowball offer, she wouldn’t even stand a chance of consideration in the current market. The current market conditions are critical to a buyer’s strategy. 

Given that sellers are getting an average 95% of list price in the community, this offer, with closing cost help, is a good offer. With the subsidy, which is average for the recent comps, it comes in at 96% of list price.

To Sum It Up… 

Use your agent as a trusted adviser. As your buyers agent, we are negotiating with your best interest in mind. We are steeped in local market conditions day in and day out. We study statistics, we know the trends and we are your advocate, skilled and motivated to get you the highest and best.

Contact Chris Highland and ask about Buyer Representation: 301-401-5119


how to antagonize a seller
How To Antagonize A Seller


Dear Buyer: How NOT to Make an Offer on a Home
Article Name
Dear Buyer: How NOT to Make an Offer on a Home
Subtitle: How to antagonize a seller and end up not getting what you want anyway. What happens when you submit a lowball offer?
The Highland Group

4 Responses to Dear Buyer: How NOT to Make An Offer on A Home

  1. Fantastic article! Sometimes I wonder if some buyers want to buy the property or piss the seller off. Antagonizing the seller is NOT a smart step in the negotiation process in my experience.

  2. Thanks Mark. It does seem like the intent is a “scorched earth” policy, doesn’t it. It never does anyone any good.

  3. […] The inventory should increase in 2015, giving buyers more choices. We expect a balanced market, so sellers are not going to be desperate. We don’t advise any lowball offers, unless there are rare circumstances. For further reading: Dear Buyers: How NOT to Make an Offer on a Home […]

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