“Some buyers are putting in really stupid offers”, moaned the agent as he showed me an apartment yesterday.
“What do you mean?”, I asked.
“I received an offer last week that was 32% below the guide price. Nothing has sold in that street for that price per square foot since about 2008. It’s insulting.”
This brief conversation reveals a whole host of issues that can arise in negotiations, but I just want to discuss a couple of them here.
The first is the “insulting offer”. I am stunned by how many people do not put forward offers because they think they are insulting or won’t be taken seriously. If you don’t believe this is the case, then why is it that price reductions of just 5% on a property often cause multiple buyers to make an offer within 1%-10% of the new price?
Surely, if you like a property that is valued at £3m and you think the fair value is £2.55m, then you should simply negotiate on that basis? And it’s best to do so when the property is overvalued because you will be negotiating when very few buyers will be interested.
But no. Most buyers wait for the price to be reduced to £2.85m or less before even considering making an offer. This is a mistake, because the price reduction will generate more interest and very often you will end up having to pay more than if you had simply put forward a “low” offer earlier when there was less interest.
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“Jeremy’s initial offer was much lower than I would have made despite the fact I handle negotiations as a regular part of my job. Indeed, the strategy he devised meant that I acquired the property at a favourable price and for less than the maximum price we had targeted, once again showing that he had my best interests at heart.” (Mr M Stoleson – Belgravia)
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Insulting Offers
One of people’s concerns is that they don’t want to insult the buyer or the agent. But as I pointed out to the agent yesterday, if I was insulted by every asking price that was moronic, I probably wouldn’t get out of bed most days.
Your offer is merely a number and if someone is insulted by a number then they have serious issues. It is very simple – they can either reject or accept the offer. And this is what happens 99.9% of the time.
I have negotiated on hundreds of properties and only once have I ever been accused of making an insulting offer… but they still continued to negotiate with us. Maybe one day someone will refuse to deal with me, but so be it.
This is one of the reasons why I am able to achieve prices that my clients didn’t think would be possible. And my clients aren’t vacuous halfwits who just throw money around (as the popular media suggest the rich behave). The vast majority of my clients are entrepreneurs, financiers and partners at law firms, all of whom negotiate hard in their businesses.
How to make an “insulting offer” work
One of the keys to any successful property negotiation is to frame your offers in a way that resonates with the seller. To do this you need to find out as much about the seller as you can before making your offer.
Unfortunately, most buyers get this completely wrong and think that to resonate with the seller, you should show them the logic behind your offer – for example, providing a list of pound per square foot comparators to show them why their guide price is too high and backing that up with market data to show that they are in a weak position.
And while that is part of the negotiation process, relying solely on logic alone will give you a significantly smaller chance of achieving the lowest price possible. After all, if someone tries to back you into a corner, how do you tend to react?
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“We didn’t think Jeremy would succeed in reaching an agreement at a price that would work for us because the sellers, especially one of them, were completely unrealistic. However, he found a solution and agreed a price that the agents didn’t think would be possible and which was very favourable for us.” Mr & Mrs Cole (Chelsea)
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So, if you are planning to acquire a property in London, would you be open to discovering more sophisticated strategies and tactics for making offers which have been proven and tested to work?
If so, simply request Your FREE Copy of my book, The Insider’s Guide To Acquiring £1m to £100m Property in London, and you’ll discover not only 30+ pages of proven negotiation techniques, but also advice on how to find the best property your money can buy including the finest off-market opportunities.
Learn the #1 strategies that I use to find “Best in Breed” opportunities for my clients. This isn’t just theory — it’s real, actionable guidance based on my 23+ years of acquiring properties in prime central London.
Click Here Now To Request Your FREE Book or call 02034578855 (+442034578855 from outside the UK).
Remember, you can follow the herd and rely on websites and standard negotiation tactics to achieve average results. Or you can take a more sophisticated approach to become a “Dominant Buyer” and have first refusal on the best properties while avoiding the wasted time, money and stress suffered by the typical buyer. Which would you prefer?
