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How to create an ultra-compelling counter offer

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Your responsibility includes securing the most advantageous price possible for your client. Causal counter offers may get the deal to close, but are they really getting your client’s the best possible price?

Reframe the transactional task of the counter offer, see it for all it can be, discover its power — make it a valuation dispute.

To crank out high production numbers, we rely on tools that expedite the sales process. An MLS’s organic CMA system coupled with a little knowledge of the market means you just grab the obvious comparables, pop in the commonly accepted value adjustments — and presto, you’re ready for the negotiation phase of the deal, right?

Well, not exactly.

Using a generic process to create a CMA to negotiate with doesn’t add up to counter offers that compel the other parties to adjust their perspective and ultimately their price point.

A property with strong comps offers you less room to make a case for price adjustments. That doesn’t change the fact that your client deserves for you to make the best possible case for the best possible price.

Working properties that aren’t cookie-cutter is an opportunity to really shine. At the wheel of the deal, I’ve seen adjustments as large as half the asking price be agreed to! This is what you’re getting paid for people! Roll up your sleeves, and put in the work.

Using the standardized list of adjustment elements (age, size, location, room counts, construction type, etc.) is necessary, but it doesn’t make you agent extraordinaire. Go beyond what’s necessary, and do what’s powerful. Here’s how:

  • Make a list of the property’s other unique characteristics: Go beyond the CMA consider design elements (stain glass windows), landscape rehabilitation needs (brush overgrowth), income producing features (the apartment above the garage), future zoning changes (a city’s comprehensive plan impacts), etc.
  • Do the cold hard math: Establish data to support the value. You are not bound by the same restrictions of the three methods an appraiser uses. Is the landscaping cost really just a few hundred dollars or tens of thousands? How will the value change in two years when the city’s comprehensive plan designates the area for commercial zoning?(Commercial sale value could be substantially higher than the current value or perhaps much lower due to the expenses associated with converting it to a commercial property, don’t make assumptions, get the quotes.) If the garage apartment generates enough income to pay the mortgage, figure out exactly what the potential income for the time the new owner will stay in the property is, and show cause for a value adjustment.
  • Present your findings in a simple, indisputable manner: Start with the property’s value, and show each adjustment. Here’s the slam dunk: Provide the data, not assumptions, to substantiate the adjustment. Assumptions are disputable and likely the extent of what the other agent in the deal is armed with. Provide the actual quotes, and use calculations based on similar disparities in like-kind markets if sub market comps are not available. I’m not saying this is easy, but once you get a little practice in, it’s simple.

I entered the real estate industry during the recession. My sub market was rich with decaying properties, fire sales and owners struggling to accept the decimated value of their property.

I still closed transactions, even in a stagnant market. No matter a person’s position or perspective indisputable data articulating a property value will challenge their thinking.

Counter offers can be a suggestion to change price points based on assumptions or compel people to change price points with indisputable factual data. Which version of service do your clients want?

Tyler Meyer is a speaker, author, mentor and Realtor with Shorewest Realtors in Lake Geneva, Wisconsin. Follow him on Facebook and Instagram.

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