Check Your Emotions at the Door when entering the Atlanta Real Estate Market

by jwest on 07. Oct, 2008 in Real Estate Updates

It’s Not Personal, It’s just Business

There are many cities around the country where there is a considerable amount of residential inventory for a potential investment buyer to sift through. The metro Atlanta area is certainly no exception to this rule. When investors are pursuing opportunities in Atlanta real estate, they will often make an offer that is way below what the seller had anticipated. It is the adverse play that car salesmen use when quoting prices on a car. The term “peel them off the ceiling” is used in the car business when a salesman initially quotes a substantially higher price than what a buyer should be willing to pay. The desired effect is the prospective buyer gets so mad they “hit the ceiling”. After the buyer calms down, a reduction in the price tends to look more reasonable than the initial quoted price. The “low ball” offer is designed to “pick them off the floor” a increase in the offer price tends to look more reasonable after the seller calms down. In some cases a true “low ball” offer is used to quickly establish a floor in the price that is acceptable to the seller. It is easy to understand that some property owners and their agents could be offended or at least mildly perturbed when they receive  a offer is so low that its “offensive”.

Low Offers Are Opportunities

Some sellers and their agents refuse to counter a low offer. I have heard  people say “we did not like that offer, will the buyer submit another one?” or “we are so far apart that we could never come to acceptable terms”. In my opinion this is not the best way to handle this situation. It takes just a few minutes to fill out the paperwork that is required to counter an offer. What do you have to lose? If you do not take the time and effort to counter the offer, the prospective buyer will likely move on to the next property and you may never get another chance to negotiate with them again. Sellers need to realize that many investment buyers have as much emotional attachment to their money as the sellers do to their property. Set the emotions aside and simply counter the offer. At least you won’t stay awake at night wondering if they would have paid more to purchase the property than was initially offered.

Call me today to begin your search for Atlanta real estate.

Related posts:

  1. Negotiating in Today’s Real Estate Market (or any other for that matter)
  2. 3 Questions Atlanta Real Estate Buyers Ask
  3. 3 Questions Atlanta Real Estate Buyers Should Ask

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  • We've seen the same in the Baltimore market, though I suspect the same thing is going on around the country too. Recently had a client who offered less than 75% of asking. We advised them that the offer was not going to be accepted and that it may be so low as to turn the seller off entirely. After getting an earful from the listing agent (who apparently had NOT checked his emotions at the door!) the seller did, in fact, counter, coming down .6% (yes, POINT six percent) from the list price. At least there was a counter, but it was clear that it was intended to tell our client "come back with a real offer...we don't have to sell this house and we certainly aren't going to let you steal it." Now, that's a lot for a simple number to say, but we got the message load and clear (not that we didn't know what the message would be).
  • Emotional buyers and sellers are going to be frustrated and dissapoibted in the current market.

    ------------
    Brad Nix
    Managing Broker
    Maxsell Real Estate
    770-653-6155
    http://maxsell.net

    Typed with two thumbs
  • Could'nt agree more. Sellers realizing that Buyers are making low offers due to the overall financial climate of our economy mandated by a miriad of fiscally irresponsible decisions made by the gross negligence of Congress will
    simple counter at an acceptable price. Taking the emotions out of any business decision, and yes, selling the largest asset many of us will ever have, is a business decision, will reap greater profits for Sellers. Calm, decisive,
    analysis of the components of the offer will benefit parties on both sides of the negotiating process.
  • A couple of very good points, people know that property owners may have strong emotional attachments to their property and may want more than is reasonable, but often investors are emotionally attached to their money! Of course they are going to try and get the best price they can. However I agree that making an offer so low that it seems almost offensive is probably not the best way to get started in a negotiation.
  • James West
    There is an old adage in pricing items that are for sale, "I can always come down on the price but I can't raise it once I find a buyer". The same principle is true for an investor placing a low bid on a property. They can always raise their offer but it is unlikely that they will be able to lower it after its been submitted.
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