Property Seller Wants An Offer Before Giving An Asking Price
Keron's question: The seller wants an offer before giving and asking price.
That's fine. Anytime I give an offer, I do price anchoring. It's really important to give a super low number. Now, it doesn't basically have to be a number that's going to kill the deal. So if you low ball a seller, a lot of the times emotions get involved and they just get very angry and you just ended up shooting your foot off. But it is good to get in an extreme, extreme low number in there, even if it's kind of in an innocuous way. Basically just say, "Well, the last probably we purchased, we bought for this amount of money." But that would be your price anchor or extreme low anchor, and then you would give your actual offer.
I generally initiate 70% of what my offer will eventually be. So, definitely get in, and you do want to frame people in between at least two numbers, ideally three. You want to price anchor them with a very low, low ball number, even if that's not your offer. Inform them that you saw a property like there's sold for this amount of money, that would be your extreme anchor to kind of attach them in there. And the concept is, is that folks do kind of get trapped between the numbers you give them. They basically just kind of get absorbed into it and they just don't really think, Well, my property is worth this amount of money. They're stuck between these numbers.
***Give them the extreme anchor, and then give them a whoa offer, and this would be your eventual offer.***
The other thing I like to do is I don't like to give them a specific number. I don't like to offer them $150,000 for their home. You know, I like to offer them a hundred in $49,772. I want to be super, super specific. That way they know, I mean, if I told you I'm going to give you $150,000 for your home, well, I'm just pulling that number out of the air and that's just a number that I'm comfortable with. I don't have any actual specific reasons, but if I told you I was going to buy it for $149,772, that's super specific. You would think I actually have a reason that I actually calculated these numbers and that's the number I came up with. The other one's just arbitrary and you know it.
So, I want to hesitate to go ahead and give the seller an offer. I would try to price anchor them. You can also just price anchor them without giving them the other numbers and say, "Well, I see this other property sold for this amount of money, this super low number, what do you think about that?" This seller's going to respond, "Well, I don't think much about that. And that's a crazy offer." But now they've been anchored with that extreme low number. At that point, and hopefully you didn't alienate the seller. You don't want to do that. And then you can come in with a more reasonable offer, your next offer and kind of go in there.
I think his name is Chris Voss who wrote a book on negotiating, and I can't remember what it is. But he actually has a method, and it's actually called the Ackerman Method. Look up the Ackerman Method, and it's very effective, and it'll give you the hierarchy of when it's good to give offers and how. I do follow the Ackerman Method and that's what I would recommend. Don't worry about the seller forcing you to name your price first, as long as you do it accurately, and you do so in a way that you're not going to end up burning the deal. Good luck!!!