Best retort to "send your best offer"?

Developer · Newport Beach, CA · Member since 2016 · 71 posts · 25 votes

Seems like every time I put an offer on a property that is less than asking price (or even when it is asking price), they come back with "send your best offer". I get it from their perspective, it's a smart response, but what's the best way to respond to this? If I just give them the best offer then it completely eliminates any negotiating ability, so is there a way to respond that opens up the discussion for negotiating back-and-forth?

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Roy N.Pro Member

Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes

10y

@Ben Ballinger

We had a realtor come back to us last week with the same line ... so I resubmitted our offer 10K less than the first time.

The realtor called back both a little confused and a little perturbed and asked why we would send a lower offer. My response was that he did not indicate "best for whom" when he asked for our best offer.

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Steve Vaughan
Rental Property Investor · East Wenatchee, WA · Member since 2014 · 10k+ posts · 16k+ votes
10y
I help counter that in the beginning by making my offers a very specific dollar amount. At least appear like you did a detailed analysis. No large round PFA offers with a lot of zeros. Looks like a balloon waiting to be countered.
The great negotiator, Roger Dawson, says the counter to the "you'll have to do better than that" response is "how much better do I have to do?"
Dealing with sellers directly will improve your chances as well. Listing agents on the MLS may say this to everybody in a hot market. Good luck @Ben Ballinger!
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Denise B.
PA · Member since 2008 · 29 posts · 11 votes
10y
If my offer was fair, my response often is 'That was my best offer'.
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Roy N.Pro Member
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
10y
@Ben Ballinger
We had a realtor come back to us last week with the same line ... so I resubmitted our offer 10K less than the first time.
The realtor called back both a little confused and a little perturbed and asked why we would send a lower offer. My response was that he did not indicate "best for whom" when he asked for our best offer.
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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
10y
Roy, that is extremely funny...however if that agent ever receives an offer frome you again he will probably throw it in the trash...at least that's what I would do. I keep a running list of buyers and agents I don't take offers from for various reasons.
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Jean BolgerPro Member
Aurora, CO · Member since 2012 · 2k+ posts · 1k+ votes
10y
@Russell Brazil - really? what if it's the best offer for your client? I'm sure you don't say "that guy pissed me off a few years ago so I'm not going to show you his offer"
Of course, if it's your own property I could see doing that. You have to figure in the "hassle value" as well as the monetary value.
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Roy N.Pro Member
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
10y
Originally posted by @Russell Brazil:
Roy, that is extremely funny...however if that agent ever receives an offer frome you again he will probably throw it in the trash...at least that's what I would do. I keep a running list of buyers and agents I don't take offers from for various reasons.
Russell:
If he does refuse to present any future offers from us, it would put him in breach of his professional obligations.
We do not make many offers in a year and we make no offers without investing significant effort into our underwriting ... even for a residential property. We are also very clear that we will not negotiate against ourselves - if we do not receive a counter offer or material information indicating our valuation may be in error, do not ask us to change our offer.
This agent had contacted me several times via e-mail, despite our indicating that we were comfortable with our offer, and asked that we submit our best offer ... so I did.
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Justin Fox
Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
10y
If the property isn't worth that much to you, move on to the next. If I make an offer lower than the asking price (and it will be much lower), I expect a counter met in the middle. I'm not looking for a dream home and I'm not paying market price for an investment property.
I feel like you're working against yourself hassling with a selling agent that won't even consider an asking price offer. I have better things to do, like practice guitar while listening to the office play in the background.
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Arpad Racz
Mountain View, CA · Member since 2016 · 85 posts · 10 votes
10y
Hi Ben,
When I get this response to our offer, I pull out the comparables and start reviewing a few with the listing agent, and try to get a feel for where they are headed with their price, and what comparables they are using to arrive at that conclusion. I offer to email over a few of the comparables we are focusing on, with detailed notes on condition differences or other offsets that they can share with the seller on how we arrived at our numbers.
Kind regards,
Arpad
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Russell BrazilBusiness Member
Moderator
Real Estate Agent · Washington, D.C. · Member since 2012 · 17k+ posts · 30k+ votes
10y
Originally posted by @Jean Bolger:

@Russell Brazil - really? what if it's the best offer for your client? I'm sure you don't say "that guy pissed me off a few years ago so I'm not going to show you his offer"
Of course, if it's your own property I could see doing that. You have to figure in the "hassle value" as well as the monetary value.
If someone has done something bad enough to warrant to decide not to sell to them, then it is in my clients best interest to pass on that offer.
What is the best offer? It isnt necessarily the highest price. Say Agent X has in the past gotten out of 3 contracts with you based on home inspections, where the issues are completely minor. So they get added to my list because I know they cant close the deal. So do you think it is in my clients best interest to take an offer from Agent X at $405k who wont close the deal, or from Agent Y at $400k, but closes the deal every time.
The market knowledge of how an agent operates...or an investor, as that is the only buyer you might be dealing with multiple times is as important as the specifics of an offer. Knowing who negotiates in good faith and who is an a**hole, knowing who can close and who wont (This extends to accepting offers with financing from certain lenders) all lends weight and credibility to the offer, or detracts from the offer.
@Roy N. pointed out the agents ethical obligation to present offers. That is absolutely true.....and I see that so often on these forums. However I think people do not really fully understand what is happening the majority of the time with an offer "presentation". Sometimes I have 5 offers and I explain the pluses and minuses of the offers, including the pluses or minuses of who is making the offer whether agent or investor if Ive dealt with the investor before, and the lender used etc. 99% of the time the seller then asks me, which one would you take, and that is the one they go with. It is almost always the agent who decides which offer wins.
Also I hear people here complain about the presentation of the offer on a low ball offer. This is how low ball offer presentations go. I make a phone call to seller and say "I just got a lowball offer who is not a serious buyer, do you want to take it or even respond." Seller: "Ill pass", or "tell them to go f themselves" or "dont evevn dignify it with a response".
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Roy N.Pro Member
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
10y
@Russell Brazil
While there are no doubt investors who use an inordinate amount of an agent's bandwidth with no real prospect of a deal, there also many residential real estate agents, who's bread-n-butter is selling pretty houses to Dick & Jayne, that are in way over their head when dealing with anything more than 1-2 units.
In this instance, our offer went in with no strings attached (financing was already in-place) and a generous EMD (15%). My hypothesis is this agent misread our offer as "we were emotionally eager" to acquire the property and thought he might be able to draw more from the well if he created the atmosphere of a competition.
In the grand scheme of things the 10K was immaterial - both our original and revised offers were very fair - it was the message that needed to be heard ... and maybe it was. The property is still on the market and we are still waiting a response (to be fair, we gave them a week).
However, in general I hear and agree with your message. Similarly, there is residential agent here in the City with whom we will not do business because of his actions during a deal three years ago.
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Ben Ballinger
OP
Developer · Newport Beach, CA · Member since 2016 · 71 posts · 25 votes
10y
John Anderson who said my offers were low ball or not fair? I get the desire to make a snarky comment but it's not helpful at all. If you read my original post it pretty clearly states even when offering LISTING PRICE people still respond this way. So is that "low ball/unfair" to you?
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Ben Ballinger
OP
Developer · Newport Beach, CA · Member since 2016 · 71 posts · 25 votes
10y
Justin Fox I'm confused, are you suggesting that if the agent replies with "what is your highest/best offer?" To just move to the next property? If so, I'll be moving on to the next property almost 100% of the time. Out of 10 offers I've made in last two weeks, 9 have come back with that response.
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Dan Schwartz
Real Estate Investor · Tempe, AZ · Member since 2012 · 874 posts · 648 votes
10y
It goes both ways. I lined up commercial financing to purchase 6+4 units from a seller. Offered what they were worth to me, which was much lower than his asking price. Even though the properties had been on the market for months, the response was "we just accepted an offer yesterday, sorry." Properties sat on the market for many more months and ultimately sold for less than we had offered. I was surprised/not surprised that we didn't get a call back to refresh our as the property just sat there.....
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Justin Fox
Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
10y
@Ben Ballinger
If you offer your best price based on numbers that will make you money and they reply with that then unless you have wiggle room, yes, move on. Buying homes at or over current market rates will not provide you significant income, if any (maybe appreciation down the road but certainly not income if that's what you're seeking).
If your area's homes are selling at or over asking price maybe consider looking for distressed properties off the MLS?
I don't know about you but I don't want to pay or make nothing for being a landlord. I don't have the income or market to support strictly appreciation investments either.
Good luck on the next 10 offers!
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Ben Ballinger
OP
Developer · Newport Beach, CA · Member since 2016 · 71 posts · 25 votes
10y
I agree, but in negotiations you don't typically start with your highest and best offer. Otherwise, there's no negotiation. You offer what you feel is fair (albeit, more advantageous to you), but within acceptable realm, and then they counter, back and forth till you reach a mutually-agreed upon number/terms that is still within your acceptable price limit (e.g. I will pay no more than 100k for a property, but will start at 95k and work up if needed, etc--maybe I will get it at 95k or maybe at 100, but anywhere in there is acceptable to me).
At least, that's how I understand negotiation in other areas. Granted I am new at this but still, since when are you not supposed to try to maximize your profits, it is a business after all.
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Allende Hernandez
Miami, FL · Member since 2011 · 296 posts · 72 votes
10y
@Ben Ballinger I believe that's standard procedure for many agents. I've even noticed that some have it in an auto-responder when the offer is submitted.
I see it as a way to make you compete against your own offer. I suppose that the point is not to fall in love with the property and have your numbers well set.
If they comeback with a counter then it's YOUR decision at that point to compete with others. True, you will end up loosing some properties that you could have offer more and still be good deals...but that's the game.
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Justin Fox
Software Developer · Vidor, TX · Member since 2015 · 922 posts · 639 votes
10y
Yet these agents were asking for your highest and best offer initially and would probably meet half way between your highest offer and asking price, which is... Even higher than your highest offer. And from the sounds of it, they rejected it until it was asking price or sometimes even if it was asking price.
There's no negotiation in your favor, why waste time?
Hopefully you have better luck on the next 20 offers!
1 Reply
Aly W.
Investor · Middletown, NJ · Member since 2008 · 2k+ posts · 1k+ votes
10y
Same here....our agent said the listing agent was asking for highest and best after we'd submitted an offer on a property. I told her the same thing - we won't bid against ourselves, and without a counter, they already had our highest and best. 2 days later, they accepted our first, and only, offer.
1 Reply
Roy N.Pro Member
Rental Property Investor · Fredericton, New Brunswick · Member since 2013 · 7k+ posts · 4k+ votes
10y
@Russell Brazil et al.
The property on which we submitted a "lower best offer" back in the spring <see above> is still on the market. The real estate agent stopped by one of our job sites today and asked if we were still interested in the property. I promised to get back to him by week's end.
Since the spring I've been paying attention to the property, particularly during and just post some of the heavier thundershowers this summer. I think I may have underestimated the drainage issues on the property, so my numbers will get revisited again.
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Heather Roy
Investor · Tomball, TX · Member since 2015 · 15 posts · 3 votes
10y
Ha, Right on Roy N.! Sorry, was lurking from afar on the conversation... Love the retorts!
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John Thedford
Real Estate Broker · Naples, FL · Member since 2013 · 9k+ posts · 6k+ votes
10y
@Roy N.
I agree. I just had one go to "highest and best" and left it alone. If it doesn't make sense to pay more then why raise the price? I won't bid against myself either.
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Account Closed
Investor · Denver, CO · Member since 2016 · 736 posts · 582 votes
10y
If they have an asking price, my offer on their asking price is the best offer. I approached a real estate agent about a month ago on an advertised apartment building (8 units) with an asking price and "owner willing to finance" advertised. I asked what the owner finance terms were. She said make an offer. I asked again, give me a rate, down payment, and term...real estate agent stated she wasn't allowed to negotiate. I walked - I'm not doing this to play silly games. If people aren't willing to ask for what they want, then I question how serious they are about selling the place.
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Shekeira Ward
Attorney · Austin, TX · Member since 2015 · 40 posts · 5 votes
9y
^^^
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Shekeira Ward
Attorney · Austin, TX · Member since 2015 · 40 posts · 5 votes
9y
Originally posted by @Account Closed:

When an investor put in an offer, they should show the agent their bank statement, they have the cash funds to close and the seller might take you serious.
I just did this exact thing. all cash, 7 day close, and 2,500 earnest and STILL got rejected. SMH.
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Chris Rodriguez
Investor · Papillion, NE · Member since 2016 · 22 posts · 31 votes
9y
@Ben Ballinger - typically I'll show the seller my calculations (income approach, sales comparison, cost and final value reconciliation) and reiterate the previous discussion that I'm an investor and if the numbers don't work, its nothing personal.
Working with a realtor/agent can make this conversation more difficult, in my opinion.
@Steve Vaughan - great advice. Thank you for sharing
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