DROdio Real Estate

We had a buyer looking for a $800k - $1MM house in the VA area recently. We used our lowball offer technique to put a property listed at $849,000 under contract for $720,000… a $130,000 discount off the list price. How did we do it? Read on!First, when we made the offer, we used a cover letter (as we do for every offer) summarizing the terms (click image at left to enlarge). We also typed the offer up. It might sound very basic, but you’d be surprised at how many illiegible, hand-written offers we see. Offering a professional presentation goes a long way towards making the seller feel comfortable that the entire transaction will proceed smoothly. The offer had strong terms for a property in this price range - especially a $20k earnest money deposit. With lowball offers, we strive to craft the “perfect offer” with just one little issue - the price! That allows us to focus our energy on negotiating the price vs. other tangential terms.Next, when we sent the offer, we put incredible pressure on the seller to accept it. Here’s what we wrote:

—–Original Message—–From: Daniel R. Odio - 202.250.3846 [mailto:Daniel@drodio.com]Sent: Tuesday, February 13, 2007 12:56 AMTo: ØØØØØØØØØSubject: ØØØØØØ - Offer on your propertyØØØØØØØØ,I’ll fax this offer to you as well tomorrow morning (I don’t want to fax it now since it’s late and I imagine you have a home fax).Please find attached our offer on your property.? Please note that this offer expires at 9pm EST tomorrow (Tuesday) night.? My buyer likes your property but has several others to choose from as well, and if you decide not to accept his offer, or if you counter, he will most likely move on to the next property.I can assure you a fast, smooth closing and an easy transaction.? If you have any questions please let me know.

The key line here was that the buyer had “several others to choose from”. The seller responded with:

This offer is $23,000.00 below the assessed value of the property. Is this in line with the activity in the current real estate market? I had seen houses go for 30% or more than assessed value in past years and expectded this to drop significantly, but did not think it would go negative. Is this what you are routinely seeing in today’s market?

The seller was doing a FSBO (For Sale By Owner) and did not have a professional Realtor representing him, so he was asking us - the buyer’s agent - for advice on the market. We wrote back:

ØØØØØØ,We’re in a crazy market. I’ve seen assessments on many properties dropping by 3% to 7%. At the end of the day, our offer price was based on three factors: 1) ØØØØØØ doesn’t want to be left holding the bag if/when property values continue to fall, 2) The max price ØØØØØØ could afford, and 3) there are so many properties for sale, he has a lot of options.

The seller was faced with a situation where he had a contract in front of him for $130k below what he was asking (and what other properties in the neighborhood had sold for). But at the same time, he really wanted to sell the house. After hemming and hawing for a few days, he wrote back:

You are a very good buyer’s agent. Your client is getting a really good deal.

And he ratified the contract. We can do the same for you - contact us at right to discuss your specific situation with us.

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This entry was posted on Saturday, October 13th, 2007 at 10:07 pm and was filed under All the questions you were afraid to ask, Negotiation Techniques, The Buying Process. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.