Real Estate Investing Basics

How to Overcome the Awkwardness of Making a Low Offer

Expertise: Mortgages & Creative Financing, Business Management, Landlording & Rental Properties, Commercial Real Estate, Real Estate Deal Analysis & Advice, Real Estate Investing Basics, Personal Development
198 Articles Written

When I was a Junior in college, my dad decided to start a real estate internship and brought on 10 college students for a summer of real estate investing madness. Each intern rotated between work in the field (property management, maintenance and construction) and work in the office (marketing to sellers, analyzing deals, etc.). My dad also brought in professionals such as real estate agents and attorneys every Friday to speak to the group. At the end of the internship, he brought on a few to work full time.

Want more articles like this?

Create an account today to get BiggerPocket's best blog articles delivered to your inbox

Sign up for free

One memory in particular sticks out to me. We were looking at a house in town called Elmira just outside of Eugene, OR, and he decided to bring the entire crew along. My dad and 10 interns showed up to look at and evaluate this house as the seller sat back and waited to hear my dad’s response (while, of course, commenting on the oddity of the 10 of us interns being there).

The seller wanted $240,000. After looking over the property, my dad offered him $200,000. And thus began the negotiation. I sat there witnessing this display of hyper-awkwardness, as 10 interns watched my dad and this seller go back and forth.

The seller came down to $225,000. My dad countered at $210,000. The seller said maybe $220,000, but my dad held firm at $210,000, and the seller eventually met him there.

Related: Negotiating 101: Yes, You SHOULD Make the First Offer. Here’s Why.

Mastering Awkwardness

As you may have guessed, my father is basically the master of awkwardness. And I mean that in a good, albeit uncomfortable, way. You know those moments after something somewhat crazy has been requested when you tense up, scrunch your neck and grab your left shoulder with your right hand while looking down? Yeah, I’ve had to bear more than a few of those when I’ve been with him on a negotiation.

He must have been born without the self-consciousness gene because he has the ability to ask for just about anything. And that can be awkward. And that can also win you some great deals.

One time, my dad and a seller were $10,000 apart on a deal. However, earlier in the conversation the seller had mentioned that her son needed a new cellphone. As fate happened, my dad had just bought a cellphone (that was originally supposed to go to me by the way). He wasn’t willing to go any higher on the price so he just threw out something utterly ridiculous:

“What if I added this cellphone I have? Could you come down another $10,000?”

Now, I was luckily not there for the monumentally awkward pause that must have followed this almost absurd offer. Ten thousand dollars for a cell phone. But then again, the deal was dead if he didn't throw something else out there. So why not?

And she agreed.

A friend of mine offered $7,250 for a house (admittedly in very bad shape) in a neighborhood where the houses were going for over $100,000. He got it (and later flipped it for $49,000). Another friend of mine offered $11,000 for a five-plex in relatively decent condition in an OK neighborhood. He got it as well.

Sometimes, all you have to do is ask.

Learning How Far to Push

On one larger deal, my dad arranged a meeting with the seller after already having met with him three times before. And we just happened to have no idea what to talk to him about since our previous offer had been rejected and we couldn’t go any higher on price. It seemed destined to become one of those conversations where both of you quietly sit across from each other desperate to find something to talk about. Then someone finally says something, gets a one sentence response and the room goes back to a distressingly silent standoff.

But it didn’t happen. Instead, we found a creative solution to make the deal happen.

Yes, of course you can go too far with this. Michael Scott is not who you should be trying to emulate. But negotiations can be bastions of uncomfortable awkwardness. It’s important to learn to appreciate and even enjoy these situations. The worst thing a seller can do is say no. Indeed, the worst thing anyone can do is say no.

Related: The Top 5 Ways to Negotiate Major Discounts On Your Next Property

Practice Makes Perfect

Now, most of us are not so lucky as to be born without the self-consciousness gene. But practice makes perfect, or at least better. I, for one, have not come close to mastering this. But I have improved and believe there are two critical steps to do so:

The first is to simply ask for what you want and stick to it. Make sure to have a strike price going in and don’t deviate from it. Don’t think of getting a property under contract as “winning.” Only getting a good deal under contract should be considered a victory.

But there’s another side to asking for what you want. In many cases, the asking price is just nowhere near good enough for you. Try not to just pass on these deals, but instead go ahead and make an offer. If you’re afraid you might offend the seller or damage a relationship, just say, “I’m sorry, this isn’t the type of deal I’m looking for. The most I can offer is X.” But it’s probably better to just say, “I can give you X for the property” (with X being really, really low).

The second point is just repetition. Everything is hard at first, but it gets easier with practice. If you’re just starting out, understand that this is a process, and you don’t need to be perfect right away. You just need to do it. As time goes on, rejection will become less and less relevant.

As rejection becomes less relevant, awkwardness becomes easier to handle. And as awkwardness becomes easier to handle, making low offers (when necessary) becomes much easier. Real estate is a numbers game. The more such offers you make, the more and better deals you will get.

Andrew Syrios has been investing in real estate for over a decade and is a partner with Stewardship Investments, LLC along with his brother Phillip ...
Read more
    Angel Rosado from Bronx, New York
    Replied about 5 years ago
    Great article, Andrew. In my short career in Real estate I’ve noticed success comes down to two basic principles negotiating and networking. As the money is always made at the buy, getting a good deal is imperative. I did want to ask how do you get a deal as a first time buyer? Do you get preapproved for certain amount and make that the max strike price and make your initial offer far below the amount you’ve been preapproved?
    Chad Carson Investor from Clemson, SC
    Replied about 5 years ago
    Angel, you’re right that money is made on the buy. Very good principle to remember. Andrew can jump in on your question too, but I would caution you against making your strike price based on how much you can qualify for with financing. That has nothing to do with whether the deal is good or not. A deal is good because it meets investment criteria – like a certain amount of cash flow or a certain amount of equity between your purchase price and the market value. THOSE are the cold, hard criteria you stick to with your low offers, and that number will hopefully be far below what you can qualify for.
    Chad Carson Investor from Clemson, SC
    Replied about 5 years ago
    Andrew, I think this is a well written article on an important topic. Like you, I have had a lot of successful negotiations, but the awkward pause has never come naturally. But that pause is so important. Most of us tend to blurt something out or not let the silence do its work. That’s also why I love making offers face to face. I want to see what happens after that silence, and if it’s bad or if there are objections, I can quickly steer the conversation to a more productive place if possible. I don’t know about you, but in addition to the low offer I also like bringing some justification. I’ll do a presentation of the potential full value, likely repair costs, their likely sales and holding costs, and then arrive at a likely net price even if they sold it for full price with a realtor. My offer is still well below that number, but the difference isn’t as big as before. I sell the benefits of my quick, easy close at the lower price. Thanks again for the article!
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied about 5 years ago
    Making offers face to face is definitely important, even if uncomfortable (which is the point of course). It also allows you to build more rapport and frame your offer better (justify it before you make it) which can help them consider even really low offers they normally might have rejected out of hand.
    David Tambellini from Crystal Lake, Illinois
    Replied about 5 years ago
    How about when using the MLS? Do you have any recommendations when making low-ball offers when they are going through each party’s real estate agents? Thanks.
    Andrew Syrios Residential Real Estate Investor from Kansas City, MO
    Replied about 5 years ago
    The way I approach MLS properties is just a volume thing. It’s hard to get through the agent unless it’s a big deal that merits a discussion with the seller and the listing agent (which, if you can do, is a good idea). But for the most part, with the MLS, it’s just make a lot of offers and see where the cards fall.
    Danny N. Real Estate Investor from Worcester, Massachusetts
    Replied about 5 years ago
    Good Points !
    Al Williamson Rental Property Investor from Sacramento, CA
    Replied about 5 years ago
    Nice work! Great reminder on the importance of awkwardness.
    Terrence Arth Investor from Scottsdale, Arizona
    Replied about 5 years ago
    Nice Topic Andrew. I’ll add another dose of awkwardness to the mix. After the sales pitch, supporting rationale and finally the actual offer… stop talking. Don’t say a word. Wait for the other guy to exhaust his comments, observations and disagreements. Then you can quickly mentally sort thru the points he made and hopefully understand his true position. Then you can better present your next step or counter-counter offer. As we all know, sweat equity and pride of ownership don’t carry a lot of real value even though the seller thinks they do. It’s like negotiating “goodwill” during the purchase of a business–they think it holds value, you.. not so much.
    Anya Zola from Erie, PA
    Replied about 5 years ago
    It’s great that a local businessman was offering internships to the college students. It appears to have been a win-win situation where students acquired real-life experience and the businessman acquired some new talent to expand and grow his business. It would be interesting to hear how the businessman in this article works the other side of the deal (selling). Fore-armed with all the tricks of the trade in buying, how well does he do selling? I decided to sell my house on my own via the internet (no experience). These low-baller’s came out of the woodwork. I kept reiterating it was not a stress sale. A number of them approached me with a promise to sell my property for a 1%-2% commission – the only problem was they would offer to sell it way below market value (probably wholesalers). One agent insisted I couldn’t get more than “x” for my house and I told him I’d already received an offer at $100k above what he was insisting it would sell for. He as much as told me I was making that up. Bottom line, I got my price by sticking to my guns and ignoring the sales pitch/+. Your strategy works if the seller, for whatever reason, is anxious to sell.
    Brendan M. New to Real Estate from Colorado Springs, CO
    Replied about 5 years ago
    Really enjoyed this article – it’s good content and I appreciate the anecdotes. Thanks for sharing!