How to Deal with Clients Who Make Lowball Offers: Part 2

Last week we shared the first 5 ways to deal with clients making lowball offers from an Inman News article by Ted Wiggin. Here are the rest of the 10 ways to deal with this issue we all face from time to time:

6. Discuss the offer with listing agent

If a buyer’s agent can figure out whether a seller has already rejected an offer that’s higher than the price his buyer is after, the agent may be able to use that information to persuade a buyer to strengthen an offer, according to Steve Weiss, a San Luis Obispo, California-based broker-owner. “Most of the [listing] agents will be forthcoming with that information, especially if they know me,” Weiss said in the Facebook group Inman Coast to Coast.

“I just used this practice this past weekend and we’re still verbally negotiating today and currently $25,000 apart,” he added. “We were $75,000.” But Weiss cautioned this tactic isn’t a “one-size-fits-all.”

Phil Faranda, a Briarcliff Manor, New York broker-owner, says a buyer’s agent who decides to discuss an offer verbally tosses away the ability to provide documentation that shows that “while price may not be their strong point, terms could be.” “The biggest mistake I see with buyer’s agents making a lowball offer is they do not treat them with the same care and discretion as strong offers, making the offers all the more weak,” Faranda said.

7. Let the buyer lose

Some buyers need to lose out on a home to understand that they will have to pony up more to win one, some agents say. Los Angeles-based Realtor Andi Grant tells buyers early on that she’s willing to let them “get one lowball offer out of their system.” As suggested above, Brandon Doyle, a Minnesota-based Realtor, shows the local average list-to-sales price ratio if a buyer’s proposed offer seems to ignore market conditions. “If they still want to come in low, we let them lose one,” he said. And if that experience doesn’t teach a buyer to be more realistic, then “we have a serious conversation about their motivation and determine if it’s worth continuing the relationship.”

8. Probe a buyer’s commitment

Indeed, if buyers persistently brush aside evidence that suggests their offers are non-starters, that might indicate that they aren’t serious about securing a property anytime soon.

Probing this possibility can help agents decide whether they should consider moving on. But it may also impart enough of a sense of urgency to finally spark an attitude shift in a buyer.

“I feel like you are more interested in home shopping than homebuying…am I wrong?” Daniel McCoy, a Parker, Colorado-based agent may ask some buyers. He is only interested in helping buyers purchase a home, he will add. Andy Brown, a Tulsa, Oklahoma-based Realtor, frames the home search for a buyer as either “shopping for bargains” or “looking for a move-in ready home that matches all your wants and needs.” “If you are bargain-hunting, I can help you find a project that you can get at that price,” he said, implying that otherwise the buyer will have to offer more.

9. Fire them? 

If all else fails, agents may need to cut a client loose.

“I am only interested in helping you actually close on a home, so if you do not want my experienced advice, I am afraid I cannot be of service to you,” McCoy has told a buyer.

Seattle, Washington-based Realtor Kim Mulligan said she recently told a buyer, “If you don’t trust me or my advice, this isn’t going to work and you should find someone you do trust.”

The buyer took offense and the two parted ways, but Mulligan said she felt a great sense of relief. “The best way to succeed in this business is to cut your losses and to know when to cut them,” said South Hadley, Massachusetts, Realtor Stacy Ashton.

10. Send the buyer to a colleague for a referral fee 

Rather than merely dropping stubborn buyers, agents may be able to ultimately get some money for their time by directing them to another agent in exchange for a potential referral fee. Newer agents who are trying to build a critical mass of clients or those who have time on their hands are good candidates for these referrals, agents say.

Mt. Juliet, Tennessee-based Realtor Juanita Anderton advises gauging upfront whether buyers are willing to make reasonable offers. “If not, refer them to another less-busy agent and hope they eventually close so that you make some $$,” she said.

So there you have it! Five more great approaches to try when you have one of those lowball clients.

David M. Hassler

VP, Professional Development