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101 Comments on Are Buyers waging WAR against Sellers???
Great post! I try to prepare my sellers for lowball offers. I tell them any offer is better than no offer and is just a starting point for negotiations. I also caution buyers against lowball offers and offer them a strategy to get the best possible (but fair) price.
Scott,
Sellers receiving a "low-ball" offer, is of itself, a misconception. A buyer is only willing to make an offer for what he thinks a property is worth. Why is it today, that some properties, whose price/value ratio is so high, they sell in a matter of days while other properties languish on the market "forever"? The answer is simple, buyers are looking for value, plain and simple. If they find it - it's a done deal. Real estate agents today must deal with a significant number of seller's, who upon receiving a "low-ball" offer, become argumentative, defensive and/or combative. These seller's are not living in today's world, for the most part, they continue to perceive circumstances have remained unchanged from the "good times" we experienced a few years ago as it relates to the housing market. For some, the thought of selling their property for less than what they paid for it conjures up visions of "theft by taking". Most realtor's must tactfully address the perception of a low-ball offer which has just been received. Going "toe to toe" with a client over an offer of this nature is usually not in the best interest of either party. Continuing the education of clients and customers regarding the new paradigms we must deal with when buying and selling real estate, will go a long way to dispel the misconceptions, half truths and perceptions which for most of us, determines our level of success in negotiating the sale.
Excellent post!
Interesting, yet how do you define a low ball offer? Everybody has an opinion but nobody illustrates how to recognize a low ball offer. Is it a fixed percentage of the asking price, comparable sold price or what?
HEY SCOTT
GREAT POST
LOTS OF USEFUL INFOS THAT ANYONE CAN GET BENEFIT FROM
AGAIN THANKS FOR SHARING ......KEEP DOING THE GOOD WORK
JIMMY PHAN
Scott, this is a great post! It is hard for Sellers to receive low ball offers especially if they are emotionally tied to the property. I find the hard part is getting the Buyers to look at recent comparables and offer accordingly and not what the lady on the Today Show said or what Joe Bob was able to purchase in another town. Hopefully, these days will be behind us soon. Thanks for a wonderful post! --Krystal
Real Estate brokers representing sellers of "traditional" properties in today's glut of Short Sales, Foreclosures, and REO/bank owned properties should educate and create a strong awareness to the Seller/Owner that if they really NEED to sell their property. Also, Sellers should expect to radically reduce their expectations on how quick the property will be sold and the time on market in the MLS. It will take at least another 3-4 years before (and if) this nation's economy will start creating real jobs to beef up the housing industry once again.
Very good post and I like the way you lay it out. I also agree it never hurts to counter.
I am a buyer's agent and cringe at some of the offer's I'm asked to write. It's true, buyer's think all sellers are in trouble and they are willing to pay the buyer to take the house off their hands.
GREG that is a fantastic approach. Agents who interact and guide their buyers or sellers are generally more informed which leads to better offers which leads to more sales.
SHARON sellers who over price their listings is a whole other blog i wrote. I blame that on agents who do not properly educate their sellers using BPO's or appraisals to show them what true market value is. Despite that some agents still take over priced listings or worse price them high on purpose to get the listing. This blog is for buyers who intentionally offer less no matter what a house is priced at, the problem i am seeing is on houses that are priced at or even under maret value yet buyers are still offering 20%-50% less and end up losing the house saying they would have paid more, they just wante dto try less first.
KIMO a lowball offer is when a buyer intentionally offers less than asking price, often 20-50% less than current market despite if the house is listed at or already listed below market value. There are serial low ballers that make an offer on every new listing until someone finally accepts one, in most cases no one does and they run their agent ragged.
JIMMY thank yo for noticing the hard work. In this market you have to work harder and smarter to get ahead and stay ahead.
KRYSTAL i am glad someone else watches those shows besides me, i like to hear what they say so i know what i am up against. I work extra hard to educate my sellers what a lowball offer is and how to handle it WHEN they receive one.
ROBERT all areas are not in as bad a shape as that. yes some are still in decline but others have stabilzed and some are actually increasing. Here in NH we have one of the lowest unemployment rates, our inventory is down 30% and our sale were up 18% which shows the market is on the upswing. A house that is clean and needs little to no work and priced at or below market value is selling within 30 days.
Great post Scott, I have never sold a house to a buyer without an offer first, so even a lowball offer is a place to start, if they are a genuine buyer then let's get on with the negotiation and try and buy the house.
Scott, often the "lowball" offer is much closer to actual "market" value than the list price. Just because a seller and an agent price a property at $XXX, doesn't make it worth that price!
Great post. I work with a lot of buyers and they ARE looking for that best deal. And as the market has deflated, some sellers are holding on to what their house *was* worth a few years ago. Some of those sellers should be glad for the offers they get, because too many homes aren't even getting shown. I like what you said about always making a counter. A qualified buyer is nothing to scoff at these days! Try to work it out!
This situation reminds me of a conversation I have with every buyer before we even look at homes. I tell them, "Think of a good deal in relation to value not list price". It gets them away from the whole idea of "low balling" and heads them towards looking for a home that is agressively priced...
It is funny how personal a seller will take a low ball offer :)
well...we have lerned not to listen to the media...they routinely indocate that we are in a housing recovery!!
Hi Scott, I agree, I think the media is largely responsible for lowball offers.
GEOFF it would be near impossible to sell a property without an offer first, even paying full price comes in the form of an offer... on the other end of the spectrum making a low offer is at least offer, the key is making it a clean and well wrotten offer.
STEVEN there are offer that are low that can be at or near true market value, but to be a lowball offer, it is usually 20-50% below market price despite whether the home is listed at or already below market value.
EMILIE good point, the only way to start a sale is with an offer, hopfully the listing agent has goven the sellers a BPO so tehy know what the house is worth , and teh seller camake an informed counter offer to keep negitiations alive.
TOLIN that makes you a great buyer broker. Informing your buyers is the best step in the process. Some buyers have to lose out on a house they loved with a bad offer to understand. Buyers who are informed and listen to the advice, often can avoid these pitfalls of buying.
JENNIFER and they do take it personal, no matter how much preparing and educating them about market conditions, some get very offended.
PADDY the main stream media declared a recession 2 years after we knew we were already in one, butdont worry, they will declare it over a good year after most of us see recovery.
BOB it is these TV shows that teach buyers tactics that just do not work in most markets, in 2007-2009 theyworked great, but know as alot of markets are recovering and building, listening to your buyer broker is most important to learn local market conditions.
I agree I encourage my sellers to counter every offer its just the beginning
Great points! Both buyers & sellers need to be reminded that the ultimate sale price of a home is something that needs to be "negotiated" & that strong emotions can play bad tricks on the process. Waging war never leads to a satisfactory conclusion!
It's hard for a seller not to feel attacked by some of the offers presented. Keeping it in perspective, and countering to keep the conversation going is important. You never know where that other side will go, so it's worth at least responding.