Lowballing, if you don't know the term, means to make an offer way, way below the advertised price of a property. I'm not talking 5% here.
And look, I get it. Getting your site cheaper has benefits. The problem is that if you consistently lowball every offer you make, you'll soon end up with a lot of pissed off agents who want to run a mile when they see you coming.
Some might even refuse to take your offer to the vendor. What do you do then?
Lowballing is a strategy regularly touted in the property world as a great idea. It's based on numbers - put in 100 lowball offers, get one, for example.
Personally I'm not a huge fan, although I'm not against getting a discount when purchasing a development site. The problem is more that it tends to ignore the fact that terms are often as important as price - and sometimes even more important.
But I digress! Back to what I was talking about - what do you do if an agent refuses to take your offer to a vendor? And although that's most likely to happen because they think your price is too low, it can also happen if you're trying to get some uncommon terms, such as delayed settlement with early access.
Or they could just be uncooperative and lazy! Okay, I'll be nice. Chances are they don't want to do it because they know the vendor will say no, and they don't want to get an earbashing for wasting the vendor's time with an offer outside their parameters.
Communicate
First up, make sure you communicate clearly with the agent. Start by expressing your concerns directly to them. Ask them why there's a problem with presenting the offer. Clearly outline what you need from them in terms of communication, updates, and support throughout the process.
Remember, too, that this is a two-way street. If they've made it clear they have a meeting with the vendor on Monday and will be presenting all offers received at that time, then by asking them to present your offer the previous Friday you're breaking the "rules". Sure, you'd like to get in early and clinch the deal, but be reasonable if they say no. The bottom line is they're employed to do what the vendor wants.
Negotiate
Take a step back and consider whether your offer is reasonable given the market conditions, the property's value, and any recent comparable sales in the area. Consider adjusting your offer to a more competitive level.
If you feel your offer is reasonable, then try to negotiate with the agent to find common ground. Ask if there's room for negotiation and then ask them to present a revised offer to the vendor. Be prepared to provide justification for your offer and to potentially increase it if necessary.
Remember, even if the agent isn't saying much, they've spent time with the vendor and have a clear idea what the vendor wants, even if it's unreasonable. While you might want to push forward with an offer that suits you, the agent may be trying to help you by giving you a feel for what's likely to be successful.
As an example, if the agent knows the vendor has already bought another property and needs a quick settlement, then your offer of a 12 month settlement just won't give the vendor what's needed. It's a waste of everybody's time.
What If The Agent Is The Problem?
If you think the agent's the problem, another option would be to consider a different approach. This could involve reaching out to the vendor directly (if possible), seeking assistance from another agent within the same agency, or engaging a buyer's agent to represent your interests.
You could also look at escalating the issue to their supervisor or the agency's management. Explain the situation and provide documentation to support your concerns. This would include keeping records of all interactions with the agent, including emails, phone calls, and in-person meetings. Make note of any promises made or actions agreed upon, as well as any instances of unprofessional behaviour or lack of cooperation. Most reputable agencies take client feedback seriously and will work to address any issues with their agents.
But what if you genuinely think there's something shady going on?
If you believe the agent's refusal to present your offer is unjustified or if you suspect any unethical behaviour, you may want to seek legal advice. Real estate regulations vary by location, so it's essential to understand your rights and what options there are to address the situation.
Remember to approach the situation with professionalism and patience, as maintaining a good relationship with the real estate agent can be beneficial for future transactions. It's also possible that the vendor is difficult to deal with, so despite your suspicions it may not be the agent to blame for what's going on. Always keep an open mind.
Ultimately, though, if you're unable to reach an agreement with the agent or if you feel uncomfortable with the situation, it may be best to move on and focus on other properties. There are plenty of opportunities in the real estate market, and you don't want to waste time and energy on a transaction that isn't progressing positively.
And look, I get it. Getting your site cheaper has benefits. The problem is that if you consistently lowball every offer you make, you'll soon end up with a lot of pissed off agents who want to run a mile when they see you coming.
Some might even refuse to take your offer to the vendor. What do you do then?
Lowballing is a strategy regularly touted in the property world as a great idea. It's based on numbers - put in 100 lowball offers, get one, for example.
Personally I'm not a huge fan, although I'm not against getting a discount when purchasing a development site. The problem is more that it tends to ignore the fact that terms are often as important as price - and sometimes even more important.
But I digress! Back to what I was talking about - what do you do if an agent refuses to take your offer to a vendor? And although that's most likely to happen because they think your price is too low, it can also happen if you're trying to get some uncommon terms, such as delayed settlement with early access.
Or they could just be uncooperative and lazy! Okay, I'll be nice. Chances are they don't want to do it because they know the vendor will say no, and they don't want to get an earbashing for wasting the vendor's time with an offer outside their parameters.Communicate
First up, make sure you communicate clearly with the agent. Start by expressing your concerns directly to them. Ask them why there's a problem with presenting the offer. Clearly outline what you need from them in terms of communication, updates, and support throughout the process.
Remember, too, that this is a two-way street. If they've made it clear they have a meeting with the vendor on Monday and will be presenting all offers received at that time, then by asking them to present your offer the previous Friday you're breaking the "rules". Sure, you'd like to get in early and clinch the deal, but be reasonable if they say no. The bottom line is they're employed to do what the vendor wants.
Negotiate
Take a step back and consider whether your offer is reasonable given the market conditions, the property's value, and any recent comparable sales in the area. Consider adjusting your offer to a more competitive level.
If you feel your offer is reasonable, then try to negotiate with the agent to find common ground. Ask if there's room for negotiation and then ask them to present a revised offer to the vendor. Be prepared to provide justification for your offer and to potentially increase it if necessary.
Remember, even if the agent isn't saying much, they've spent time with the vendor and have a clear idea what the vendor wants, even if it's unreasonable. While you might want to push forward with an offer that suits you, the agent may be trying to help you by giving you a feel for what's likely to be successful.
As an example, if the agent knows the vendor has already bought another property and needs a quick settlement, then your offer of a 12 month settlement just won't give the vendor what's needed. It's a waste of everybody's time.What If The Agent Is The Problem?
If you think the agent's the problem, another option would be to consider a different approach. This could involve reaching out to the vendor directly (if possible), seeking assistance from another agent within the same agency, or engaging a buyer's agent to represent your interests.
You could also look at escalating the issue to their supervisor or the agency's management. Explain the situation and provide documentation to support your concerns. This would include keeping records of all interactions with the agent, including emails, phone calls, and in-person meetings. Make note of any promises made or actions agreed upon, as well as any instances of unprofessional behaviour or lack of cooperation. Most reputable agencies take client feedback seriously and will work to address any issues with their agents.
But what if you genuinely think there's something shady going on?
If you believe the agent's refusal to present your offer is unjustified or if you suspect any unethical behaviour, you may want to seek legal advice. Real estate regulations vary by location, so it's essential to understand your rights and what options there are to address the situation.
Remember to approach the situation with professionalism and patience, as maintaining a good relationship with the real estate agent can be beneficial for future transactions. It's also possible that the vendor is difficult to deal with, so despite your suspicions it may not be the agent to blame for what's going on. Always keep an open mind.
Ultimately, though, if you're unable to reach an agreement with the agent or if you feel uncomfortable with the situation, it may be best to move on and focus on other properties. There are plenty of opportunities in the real estate market, and you don't want to waste time and energy on a transaction that isn't progressing positively.
