Special offer

LowBall offers....how do you handle them?

By
Real Estate Broker/Owner with BLRGUY(Beach & Luxury Realty Inc)

You have just spent a lovely Saturday afternoon showing Mr & Mrs Buyer lovely 3 bedroom 2 bath pool homes in the $200,000 range.

Mr & Mrs Buyer tell you,they would like to make an offer on the 25th home you showed them today!You are probably excited that your day of being tour guide might actually turn in to a payday! You get back to your office and get a contract package out....you start to fill out the agreement and everything is going swimmingly.You then get to....Ok,how much would you like to offer on this $200,000 home?Mr Buyer tells you $75,000!! You think you misunderstood and ask $175,000?Of which Mr Buyer replies....no $75,000! After you pick yourself up off the floor,other than chasing Mr & Mrs Buyer around the office swinging your gucci purse at them uncontrollably ...what do you do?

Now,imagine you are the listing agent of this $200,000 home and Sally realtor calls all perky....I have an offer for you...where can I fax it to?

After you have broken most speed records to get to the nearest fax machine to receive this hard to come by offer thing that you have heard about from other agents but hadn't experienced one lately....after seeing it..... and hoping some of the print didn't come through on the offer part of the fax....how do you present this offer to your sellers without bodily harm coming to yourself?

Since lowball offers are a big thing nowadays...how are you handling them?

DON"T pull your hair out....a balding realtor does not sell more property than a nicely coiffed realtor!

But I am looking for your response!

Comments (36)

Cris Burlew
Beach & Luxury Realty, Inc. - Saint Pete Beach, FL
Broker ~ St Pete Beach FL Real Estate

You should still present it to the seller, but may want to start with "the buyer felt this was where they wanted to start in the negotiating process..." and then let the seller suggest a counter offer.

As a listing agent, I have in the past and current market, written in the listing agreement that the seller authorized me to not present any offer below a certain price. I could just tell the buyer's agent that the offer is too low to present per my seller's request in our listing agreement. In this market, as long as the home is priced correctly, it may be a good idea to do this.

Oct 15, 2007 11:28 AM
Kim Wilbourn
Kim Wilbourn Realty - Scottsboro, AL
Your Local Alabama REALTOR

I had a lowball offer from another Realtor. They said that the market was real slow and they wanted to get the best for their money and with the way the mortgage industry was going. They were putting in offers on different properties thinking the sellers would accept it especially if it was on the market for several months. My seller didn't accept. I couldn't believe it from another Realtor.

Oct 15, 2007 11:38 AM
Heather the Realtor Orlando, Lake Mary
LemonTree Realty - Orlando, FL
First Time Home Buyers, Bank Owned Homes
Well first off if I have the buyer I try my best to educate them as to what the home is worth, why a seriously low ball offer is bad and if they seriously want the house how this could turn the seller off who will refuse to deal with you, etc. now I have been on the other side of the fence and had a low ball offer. My seller said oh forget that and didnt even want to counter so after some talking he willing gave a verbal which wasnt much lower off the price, but was no use the buyers wants to stick to his lowball, so good luck to him.

So how do I deal with them, one step at a time and try not to take it personally and work through it, but education is key. Sometimes it ends up working out.
Oct 15, 2007 11:39 AM
Beth Anderson
Goedert Real Estate - Tecumseh, MI
Realtor - Tecumseh / Lenawee County

I always warn my sellers at the listing table that most offers being written today are low balls.  That the buyers have all read the hundreds of news reports telling them they have all the power, the sellers are all desperate and they are coming in for the kill.  I tell them once we know they have enough interest to write, it's our job to educate them with a realistic counter offer.  I warn them not to take it as personally, to be glad to have a starting place to work from and look at it as pure cold business. I know that is easier said than done, but having them prepped helps.  Then, if you are lucky enough to get a decent offer, they are thrilled.  

On the buyers side I always explain that a buyer's market means that the prices are lower and the selection is greater than it was for buyers in the past.  I tell them that many buyers misinterpet buyer's markets to mean they can get a huge discount in the listing price when in reality, home sellers have less negotiating room now due to having to price so competitively that they often are at or near their bottom line.  I run comps to show the numbers and hope they take it from there.  And, lots of the time, with all this greasing of the wheel in hopes of getting them to write an offer that won't crash and burn, many of them still just have to do it.  Human nature. 

Thought of one more thing, it's also another reason why we need those pre-approval letters and a chat with the lender before heading out.  It's one thing to have people looking in the 200,000s  who are approved for that price range and may come to reason.  It's another to have people approved for around 75.000 who are hoping that eventually they will find someone to come down to their level, yikes!  Beth

Oct 15, 2007 11:57 AM
Karen Rice Keller Williams Real Est
Keller Williams Real Estate - Hawley, PA
Northeast PA & Lake Wallenpaupack Home Sales

Tell the seller not to shoot the messenger.  LOL

A lady in my office told me that her friend had her house listed at $350K.  And offer came in for $225K, so they countered with $395k.  I love it.  LOL 

Oct 15, 2007 02:20 PM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
Cris,that is a great idea and saves alot of hassle!
Oct 15, 2007 10:42 PM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
KIm,the thing is,some sellers do take these ridiculous offers hence investors will continue to write them up.(and even realtor/investors)
Oct 15, 2007 10:43 PM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
Thanks Heather!Some sellers get so insulted though..they won't look at any other offers from that buyer again.
Oct 15, 2007 10:45 PM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
Beth..good idea..always nice to have them prepared!
Oct 15, 2007 10:47 PM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
I agree with you Karen..you shouldn't need to wear a bullet proof vest when presenting...LOL
Oct 15, 2007 10:48 PM
M. Suzi Woods (Gravenstuk)
NOW Sharing the life and spice of the GC one day at a time - Grand Canyon, AZ
Suzi Woods, Prior Independent REBroker in MS

I always pull comps before discussing the amount of the offer. It takes a little longer but I figure if they are seriously interested in the home, reviewing a few comps (if there are any) is worth their time. As a listing agent, if recent comps are available, I will leave those in the tour packet that stays with property.

I also show clients closed MLS listings in the price range in which they want to make the offer (if any are available:-) (I always have my tablet with me and usually wireless connection through Verizon). I let them know that I will submit the offer as they wish and discuss every possible scenario that could result (plus I verify if that they are truly interested in that property and that we are looking in the right price range for them).

Have you seen Broker Bryant's response to lowballs?

Oct 17, 2007 06:06 AM
Michelle Coker
Real Estate Mart of Tennessee, Inc. - Memphis, TN
Affiliate Broker
Buyers want the world and Sellers don't want to give a penny. Classic scenerio.
Oct 17, 2007 07:36 AM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
Suzi,no I haven't seen Broker Bryants response..I will have to check it out!Thanks for letting me know!
Oct 17, 2007 10:15 AM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
You are right Michelle....we need to show them the light;)
Oct 17, 2007 10:16 AM
Paul Slaybaugh
Homesmart - Scottsdale, AZ
Scottsdale, AZ Real Estate

How about this? Circle the price, write "Return to sender" and fax it back. Better yet, just use this counter:

http://activerain.com/blogsview/211926/Best-Counter-Offer-Ever

Oct 17, 2007 11:47 AM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
Paul I had forgotten about that counter offer...LOL That was the greatest! I also like your idea as well!
Oct 18, 2007 05:42 AM
Mary Strang
Viroqua, WI

This is a good technique for determining who is a low ballers... Let the buyer know before going out to look at homes, if it will be OK for you to ask for their frank opinion on if they liked the home or not and what their opinion is on the value to the list price is of each home. Tell them it is OK to not like the home, and you expect them to not like many of them, because they only need to really like one of them, right?

Arrange showing with home that you think the buyer would not likely want to buy first. After the showing of the first house, ask the buyer immediately, would you buy this home?  Because you expect them to say no, ask a follow up question. Since you do not like this house, I am curious as to what is your opinion of value, compared to the asking price. What do you think the selling price would most likely be? Don't let them be glib, ask them to be serious. Hopefully they will be fair in their value. Give them your opinion based on comps you have prepared in advance. Continue doing this after each home on your tour, I bet you will quickly know what kind of buyer you have in your car. This is a good way to avoid showing someone 25 houses. If they seriously low ball all of them, then you need a reality check on if you can continue to work with them. 

Oct 21, 2007 09:21 AM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
That is a pretty good idea Mary!You can at least get a feel of how serious they may be.Thanks for sharing!
Oct 21, 2007 09:27 AM
Mary Strang
Viroqua, WI
Thanks it works for me, it is a chance for them to be the appraiser, where they will start telling you the answers before you get to ask the question. By keeping it a real buying decision from the start, you will learn a lot about how the buyer views list price to offer price. Hopefully, long before you get to the one they would buy, you will know what you will have to deal with and if they are realistic on values.
Oct 21, 2007 09:43 AM
BLR Guy
BLRGUY(Beach & Luxury Realty Inc) - Saint Pete Beach, FL
I agree Mary,plus if you find them too unrealistic,you can drop them before you go through that tank of gas
Oct 21, 2007 10:08 AM