Very low offers lead to sellers withdrawing from sales rather than appeasing buyers. Whilst the current market could be seen as a buyer’s market most sellers do not seem to surrender. Both buyers and sellers are frustrated. The lack of supply for buyers and the time it is taking to sell is not reported by the media and it is a very important part of the current real estate dynamic. Property prices are declining but not unilaterally and some property prices are static.
Sellers are holding for an average of up to 120 days before properties are lifted from the market in many parts of Victoria. This is partly because finance is taking longer too. The buyers cannot say the owner wants too much if all the sellers are holding for long periods. In fact, many sellers would rather not sell at all – indicating they are not financially driven to sell which is the only reason they would have dropped their price. Moreover, because the property is taking so long to sell, sellers are not looking to buy till theirs is sold meaning they are not stressed to sell.
Some buyers are wrongly assuming that the seller wants too much – because the media says prices are declining. In fact, in middle-class areas, most sellers are holding on to their prices. Indeed, many properties are selling close to what the vendor originally asked – especially houses. The lack of stock and the resistance from sellers is forcing many buyers to revisit properties they initially rejected when they realise that the new stock is not any cheaper.
The lack of stock and inelastic prices is leading to buyer frustration. Unfortunately, some buyers feel insulting the seller with a very low offer will help the seller be more realistic. This is counterproductive and is a mostly useless negotiation tactic – especially if there is no financial need to sell.
Buyers need to consider that there is a difference between being offensive about the seller’s expectations versus stating objective and factual information about the home’s condition. Rather than offering a lower price for a home based on your opinion of the home, a lower price offer only works if you can make a case. You need to provide evidence that the house needs updating and repairs or does not have what other properties have. Let’s face it would you accept an insulting offer?
The best way to get your offer accepted is to offer the seller proper comparisons. Bedrooms, garages versus car spaces, land size, location, and amenities are what a seller will listen to. Your opinion means nothing to them because they don’t know you and if anything could make them hostile to your bid. Many buyers have found out a house has sold for more than they would have offered and it often comes down to negotiation tactics.
Buying a property is stressful and often frustrating but it is a high-involvement transaction and needs a sophisticated approach. As a buyer be objective, appeal to the sellers’ interests as appealing to their sensibilities is ironically how you will get want you want.