Folks, it happens on almost every call. You walk a house, you do your homework, you sit down at the kitchen table and you give the man or woman across from you an honest number. And they look at you like you just insulted their mother.
"That's too low."
I've heard it a thousand times in twenty-some years of doing this here in Illinois. New investors dread that moment. They think it means the deal is dead. It doesn't. Most of the time it means the conversation is just getting started. What you say in the next sixty seconds decides whether you walk out with a challenge you can solve or a door closing behind you.
I want to walk you through what I actually do, because it is almost the opposite of what most people's gut tells them.
Don't defend the number. Walk it together.
The natural reaction when somebody says your offer is too low is to defend it. You start listing off repairs. You start talking about the market. You get a little louder. And now you and the seller are on opposite sides of the table arguing about a number.
I don't do that anymore. When somebody tells me the offer is too low, the first thing out of my mouth is a question, not a defense.
"Okay. Help me understand where you were hoping to land."
That's it. I'm not agreeing, I'm not caving, I'm just asking. Because here is the thing I've learned the hard way: the numbers are sacred, but the number in the seller's head almost never comes from the numbers. It comes from what their neighbor's house supposedly sold for, or what they owe, or what they need to walk away with to move on with their life. Until I know which one it is, I'm negotiating blind.
So I ask. And then I get quiet and I let them talk. Nine times out of ten they tell me exactly what the real challenge is, and it usually isn't the price at all.
If you've read my piece on how to talk to motivated sellers without feeling pushy, this is the same idea wearing a different hat. We're not there to win an argument. We're there to decide with the owner against their challenge. We don't buy houses, we solve challenges.
Put the numbers on the table where they can see them
Once I know what they were hoping for, I don't tell them they're wrong. I show them.
I'll say something like, "Let me show you how I got to my number, and if I've got something wrong, I want to know." Then I walk it with them, out loud, in plain dollars. Not percentages. Nobody sits at their kitchen table and thinks in percentages.
Say it's a house that would sell for around $200,000 fixed up. I'll say, "It needs a roof, that's real money. It needs a kitchen, the furnace is on its last legs, and the bathroom upstairs isn't right. By the time I'm done that's somewhere around $45,000 in work, and I've got to pay for the money I borrow to do it, pay the taxes and insurance while I'm holding it, and pay to sell it on the other end. When I add all that up and leave enough room that I don't go broke if the roof costs more than I think — and it always does — I land right around where my offer is."
I'm not lecturing. I'm letting the man see the arithmetic for himself. When numbers are on the table, folks stop arguing with me and start arguing with the numbers, and the numbers don't lie. People lie about numbers all the time, but the numbers themselves don't.
Sometimes when I do this the seller goes quiet, and then says, "I didn't realize the roof was that bad." And now we're not fighting anymore. We're two people looking at the same problem.
The offer might be right and the seller might still not be ready
Here's the part nobody wants to hear. Sometimes you walk the numbers, you're honest, you're kind, and the seller still says no. The number is what the number is, and it's not what they need.
That is not a failure. That is information.
I never leave that kitchen table angry, and I never leave it burning the bridge. Because no for now is not no forever. I've bought houses eight months, a year, sometimes two years after the seller first told me my offer was too low. What changed wasn't my number. What changed was their situation. The tax bill came due. The tenant tore the place up. The out-of-state kid stopped answering the phone about helping. And when that day came, they called the fella who treated them decent and showed them the real numbers, not the six people who lowballed them and vanished.
So when I get a no, I ask if I can check back in a few months. I write down the date. I actually call. That follow-up is where a huge share of my deals come from, and it costs me nothing but a note on the calendar and a little discipline. If you're just getting started as a real estate investor, understand that the follow-up list is worth more than any single offer you'll make this month.
Give them options, not one take-it-or-leave-it number
One more thing, and this is the one that changed my business the most. When a seller says the cash offer is too low, sometimes they're right — for a cash offer. But cash isn't the only tool in the bag.
If I can't make the cash number work but I can pay more over time, or take over the payments, or structure it so they get some now and some later, I say so. Those creative structures are also, by the way, a big part of how folks get started when they think they need a pile of cash to do their first deal — I wrote about that in whether you can invest in real estate with no money. My friend Tim Wilkinson down in Texas teaches a version of this he calls the Four Offers method — you go in with more than one way to solve the challenge instead of a single lowball. Different market than mine, but the principle travels: when a seller says the offer is too low, the honest answer is often "the cash offer is, but here's another way we might get you closer to your number."
Now the conversation isn't "yes or no on this one price." It's "which of these ways works best for you." That's a completely different room to be in. The seller feels like the decision maker again, because they are. What we decide to put together is what we put together, and they get to choose.
I'll be honest with you about the limits here, too. Some of these structures — taking over payments, seller financing, anything with the existing loan — have real legal and tax wrinkles that change by situation and by state. I'm not a lawyer or a tax man and neither are you. Get the deal papered by somebody who is before you rely on any of it. I'd rather you slow down and do it right than move fast and hurt a seller who trusted you.
The bottom line
"Your offer is too low" is not the end of the conversation. It's the seller telling you that you haven't shown them enough yet — either enough of the real numbers, or enough of the ways you can help.
So don't defend. Ask. Walk the numbers together in plain dollars. Give them more than one way to say yes. And if it's still no today, write down the date and check back, because no for now is not no forever.
I'm just an old grumpy grandpa-looking guy who's made every mistake in this book at least twice. But I can tell you this much for certain: the investors who last are the ones who learn to hear "too low" as the beginning of a real conversation instead of the sound of a door closing. It's not always comfortable. It is almost always worth it.
This article is educational and reflects one investor's experience. It is not legal, tax, or financial advice. Real estate laws and deal structures vary by state and situation — consult a licensed attorney, accountant, or qualified professional before acting on any strategy discussed here.
Disclaimer: This post is for informational and educational purposes only and is not financial, legal, or investment advice. Real estate carries risk, and individual results will vary depending on your market, your resources, and your effort. Do your own due diligence and consult a qualified professional before making any decisions.
