Why are agents who complain about low-ball offers the ones who write all the low-ball offers?

How low is low? Most times though we don't care where the offer starts, (we are just happy it brings us to the negiotating table), we are only concerned where the Buyer thinks it will end!  Just today, we 'adjusted' the asking price on a few of our listings, and two of the owners asked us why nobody 'low balled' them....we laughed and said if they did, you would have been insulted anyway!!  

Consider that a lowball offer on a Short Sale or a REO listed on the MLS is a whole different animal.  The value of the property offered as a Short Sale is directly controlled by the Short Sale Lender's Valuations.  If you as the listing agent have BPO tmeplates then you can provide an additional BPO to help provide an additional explaination for your listing price value if the Short Sale lender's  values come in higher.  But to play Cal Worthington and his dog Spot with buyers on a Short Sale offer is in my oppinion not best serving a client.

The biggest problem in our industry right now is very few know how to properly set Buyer and Seller expectations - especially with distressed properties.  The Banks on a Short Sale or REO don't give-a-filp about the well constructed pleas as to why the buyer can justify a lower value on the property.  The banks have no accounting rules that say they can't sit on a property ad infinitum.  My Job as the listing agent on an REO or a Short Sale is to get the highest price for my seller even if they are an institution. Short Sale Lenders and REOs spend a great deal of money on multiple BPOs and Appraisal for the market value of the home in it's current condition. I have not seen any deep discounts given on distressed properties around here that are listed on the MLS.

AMEN!

I explain that on short sales, it's going to be a matter of what the value or BPO is, that real low offers don't get you anywhere. I try to get the buyers to not offer too low a price, but it is an offer and the goal is to get the ball rolling.  In this market, sellers should not be offended by any prices, they should just put their feelings aside and think about the transaction and their goals and try to make it work. 

In my opinion this is why they need to have a good representative advising them throughout the process. If you don't sell that property someone else will. If no one sells then I don't get a home inspection so goes the circle until the process is complete.

I agree 100% Jim. The problem is the Seller(s) tend to get to attached emotionally and take everything as an attack on them personally. Then you have the Agents who sometimes focus on how the offer will affect their commissions to the point they sabotage the deal. I always explain to my sellers the importance of not getting to attached emotionally to the process. I mention what they can expect from the prospective buyers and their potential offers. I also make it a point to present every offer without prejudice including each point good or bad. Only then can the seller make the best decision for them and their family.  

Do you thing some people play by differnent rules depending on which side they are on?  Surely not!!

Maybe we need to also define lowball.  Our clients looked at a property that is at least 10% overpriced.  We just made an offer at the highest (and truly best comp), but we are only coming in at 90% of the asking price.  Is that a lowball?  btw, the next highest comp is 13% below that one.

Robert Boyer
WJB Home Loan
Investment Property Search
San Diego Real Estate Homes for Sale

I NEVER get upset personally of any offer. Whether I am representing the buyer or seller. I don't dictate offer's. Yes, I can give a buyer the comps and explain to them a proper price, but if they want to go against my advice anyway, that is not my fault. I have never understood why agents take these offers personally.

On the flip side if I am representing a seller, why does the agent get mad. It is not their money or investment. And the seller saying they won't even respond. WHAT??? Why not, you have nothing to lose to put in a counter offer. I think it's all a game that can be avoided. I know it's an emotional process buying and selling a home, but it doesn't have to be.

and another thing in response to #44. Most homes are still over priced based on the current market. So yes, we must define low ball. That should be the question.

Hi Jim - I agree completely.  It can be hard to keep sellers from getting angry or insulted by a low offer, but the only way to settle them down is to remind them that it is a start of negotiations.  Before the offer came in there was no one to negotiate with.

Terry Watson has a funny idea.   When he gets a ridiculously low offer ( llike $100,000) on a nice home that is worth about $300,000, he gets the seller to counter back at 10 million dollars.  When the buyer's agent calls him up and asks, "You call that a serious counteroffer?"  He responds with, "Oh - you mean your offer was serious?  I thought you were just kidding around."

Jim, you have great approach. Also, I'd say that only buyers or sellers have the right to get mad and angry about a low offer  or contingencies, NOT the agent. it is the agent's job to explain to the clients, how the low offer can start the negotiation, what a counter offer can be etc. We will sympathize, and offer support, but we really shouldn't get mad, because low offers - no matter how ridiculous - are part of the business, we all know they exist,  we accept them or don't accept them depending on client's wishes, so why get offended?   

Hi, Jim:

I avoid even using the term "lowball" with my clients. I don't want them to get upset right away, since negotiations will go downhill from there. But yes, I am all in favor of "reasonable" offers, supported by the sales comparables.

(I also have to say that is an ominous photo of Zoey the Cool Cat. She has a guilty look on her face!)

Cheers,

Robin

When I get a "low ball" offer from on a house I have listed I tell the seller I have good news, we have an offer of $100K on your $200K house. When he says what so good about that I tell him that it is better than the offer we had yesterday. When he says we didn't get an offer yesterday, I say, exactly. Soem deals won't work but if someone puts anything in writing in my hands, I got a shot at it, and I have been able to do this.

Jim that is too funny. At the end of the day we simply have to work with what we have! As you rightly put it an offer is still an offer and something to work from.

The only time I don't want to submit a low-ball offer is when it's predictable that my buyers' low-ball offer won't be accepted. For example: The comps show the REO's value is about $280,000, the listing agent informs me the lender has three BPO's and believes the value is $275,000... and the listing agent also informs me they have five other offers (that came in that day) with the highest being $295,000... And that the lender is deciding which offer to accept tomorrow. When my buyers said they wanted to offer $279,000, I explained that this offer has a very low chance of being accepted, and that since they absolutely loved this house (and they really did), that they should consider offering $305,000 to improve the odds of their offer being accepted. They went against my advice, so I submitted their offer at $279,000, and the next day I was told the lender accepted another offer... for $295,000. It's these type of situations, where I did my homework and had a very good idea of what it would take to get the offer accepted, and then my advice/insight is ignored, that I find so disheartening. My buyers really, really wanted that home... and someone else is now living in it.

While I agree that you need the offer to get the ball rolling, often times as a listing agent you are well aware of how your sellers feel about their home. You know how they will react, and you know what will offend them. That doesn't mean they should be offended, it just means you know how they'll respond.
So in a situation like that, why make another agent waste their valuable time writing and submitting an offer that will be immediately rejected? Let them use their time to submit a low ball offer on a property they at least have a shot of obtaining.