How to start negotiations after a low-ball offer

So you found the perfect investment property.

You’ve summoned up all your courage and made a cheeky low-ball offer, in the hopes of snapping up a bargain – and it didn’t work out. Negotiations2

What’s next?

Do you walk away, assuming that your relationship with the vendors is unsalvageable?

Or do you use this opportunity as a springboard for negotiations that could still see you score the property for a great price?

If the property is a good one, with all the fundamentals in place for future price growth, then you have every reason to fight for it.

When you’re determined to make it yours, despite an unsuccessful low-ball offer, here’s how to do it:

Step 1: Keep it friendly 

It’s possible the sellers have been quite taken aback, even offended, by your offer, so it’s vital that you maintain a respectful relationship with them here on out.

To you, the property is all about facts and figures, the opportunity to build your wealth.

But to them, it is their home – possibly where they have raised their family, or said goodbye to a much-loved pet.

It’s understandable that their emotions are tied up in the bricks and mortar, so the last thing you want to do is insult the place they hold so close to their heart.

Step 2: Do your research

Find out the current stats on vendor discounting, days on market and median sales price in the area.

If homes are selling for less than they’ve been advertised for, or spending months languishing on the market with no interest, this could work in your favour.

Likewise, if the median price has tapered off or dropped a little, your offer might not seem so low after all.

Present these facts to the agent, to justify your low offer and explain why you don’t believe another buyer is going to materialise with a wad of cash anytime soon.

Fear is an excellent motivator, and a seller faced with a looming price slump will be putty in your hands at the negotiation table.

Step 3: Be prepared to bend on other terms of the sale


Going forward with negotiations after a low-ball offer is treading in dangerous waters, but you smooth the sailing a little if you’re willing to compromise on other aspects of the contract.

For example, you might be happy to accommodate the vendor’s settlement terms, offering them the possibility of a quicker sale or more time to move on, whichever is applicable.

Not all sellers are motivated by price alone, and being flexible on the terms of the contract could be what sets you apart from the other buyers vying for the home.

Step 4: Make an effort to understand the seller

If you can get to the bottom of why the house is on the market, you can use this to your benefit when negotiating after a low-ball offer.

If the vendors are getting a divorce, or selling for financial reasons, they may be more motivated to drop their price to get the whole ugly process over and done with. Understand

Personality matters too – if they’re cocky and confident, they probably won’t budge, but if your low offer has shaken their faith in the value of the home, it could be enough for them to waver.

Put yourself in their shoes, and offer a price and conditions that are sympathetic to their circumstances.

At the end of the day, a negotiation is just that – a negotiation.

The vendor expects to go back and forth with you, so a shaky first start doesn’t always mean the deal is dead.

Be respectful, do your research, and be prepared to give the vendors something they want – and you could be well on your way to settling your next property.


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Brett Warren


Brett Warren is Director of Metropole Properties Brisbane and uses his 13 plus years property investment experience to advise clients how to grow, protect and pass on their build their wealth through property. Visit: Metropole Brisbane

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