This weekend in Manchester NH their was a raging debate raging... Simply put... Can a listing agent submit an offer that is "TOO LOW" to the seller? Is there any case where the listing agent should not be submitting offers becuase they are too low?  

Unless the seller directs the listing agent in writing to "not submit" offers under a specific amount, ALL offers submitted in writing and accompanied by the required addendums, prequailification letter and deposit, no matter what they are, need to be submitted to the seller.

Recently we have debated 'Low Ball " offers and how sellers react to them. Some offers that some may consider low ball offers may actually be what the true market value is. ARE BUYER WAGING WAR AGAINST SELLERS?

The number one rule of value is that something is only worth what someone else is willing to pay for it.

Some sellers have unexpected expectations what a value is, sometimes it is their fault and other times such as in bank owned homes. The asset manager is often one to two thousand miles away and have never seen the house other than in pictures.  It is the job of the appraiser or agents they hire to complete an Appraisal or BPO to set the value on the home. Often these days the appraisals and BPO's are being assigned to those who will work for less or are even out of town. The result is the values are coming in higher than what is considered market value in that area. 

As a listing agent of alot of bank owned homes i have been facing this problem quite a bit over the last year. To add to the problem most of these homes are in such bad condition that a buyer needs cash to purchase as no bank would loan money on the home. Often they are not habitable, water does not work, pipes all stolen, roof leaking, septic failed, broken windows and no flooring. It would cost more to fix to make it able to get a mortgage than the bank would recover if they spent the money on any repairs.



When a home can only be sold to cash buyers the value is lower than that of a home where all buyers could purchase. Cash buyers do not pay retail, they pay what is considered the cash value, some say wholesale, but that is not always correct as wholesale usually implies bulk sales.

The point of this blog is that a management company that works on listing bank owned homes, has stated that agents who submit offers that are too low will not receive listings any longer. As a listing agent it is my job to extensively market every property, i invite every investor, builder, developer, flipper and buyer who are on my lists, to see the home upon getting a price and encourage every one to make offers in writing. Investors seeing other investors know time is of the essence, that they should put together their best offer and submit it promptly. All offers are uploaded to the asset manager for their decision. 

Most of the time we have enough offers that one can be picked as the best and the property is put under contract without days of negotiations as i already had everyone put in their highest and best offer.. In some of the homes that are of poorer condition, it takes an investor with higher resources and cash to make the needed repairs. Therefore offers are often lower. In cases like this a low offer is often a starting point that begin negotiations. With no offer, there are no negotiations whoch mean no sale.

So what do you think about submitting low offers to sellers?



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Scott Godzyk is the Owner/Broker of The Godzyk Real Estate Services located in Manchester NH. With 25 years of Real Estate experience Scott specializes in Listing and Selling Bank Owned Homes, Short Ssles, Residential Properties, Condominiums, New Construction and Investment Properties. Scott services the counties of Hillsborough, Merrimack, Rockingham and Belknap. To contact Scott Godzyk please call 603-661-2121 or email sctprop@aol.com. his website is www.ScottSellsNH.com.



 

 

 


 

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15 Comments on Can a listing agent submit an offer that is "TOO LOW" to the seller? The follow up to "Are Buyers waging war on sellers?"

NOV
07
2011

As part of taking a listing we need and must prepare the seller that offers may come in that may seem un realistic but with every bit of feedback that we recieve, an offer being a type of feedback we learn more about the market.  Every bit of feedback is valuable. 
10:20am • #1

I think in properties such as what you describe there is no such thing as too low. Many investors even won't want to take on those types of headaches and overwhelming repairs unless the property is a steal. For nice owner occupied houses though - I think a lot of time can be wasted based on buyer fantasy of getting a good deal and offering 100k below actual market value. (this can be caused by reading the news reports of a falling real estate market nationwide but not happening in their area)  But whenever I've sold one of my houses I always figure they are free to offer whatever they want just as I am free to counter much higher or politely decline... I always counter though and quickly discover whether they are willing to play ball or just the people out making ridiculous offers in hopes of finding someone really really desperate.
10:21am • #2
702,618 Points 55 Featured Posts Outside Blog Called Shot Master

Great point Tim, When you have a owner occupied sale, educating the sellers is the best thing you can do. In this case the seller was a bank, all the preparing in the world is not always listened to.  
10:29am • #3
702,618 Points 55 Featured Posts Outside Blog Called Shot Master

Sara you have a great outlook on this situation, it is important to counter every offer as it is a starting point of negotiations. With a counter offer you can quickly determeine if the buyer is genuine or just looking for half off.
10:30am • #4
1,516,505 Points 112 Featured Posts Localism Sponsor Outside Blog Called Shot Master

Wow.  Just when you think banks couldn't reach a new low...they do!  The listing agent doesn't control what a buyer is willing to pay.  All a bank has to do is say NO.  They seem to have mastered that phrase in other areas....loan mod, short sale.  So what's the big deal about saying no to a low ball offer?
10:51am • #5
145,732 Points Called Shot Master

The agent should always submit all offers to the owner,unless directed othewish by the seller.
10:53am • #6
702,618 Points 55 Featured Posts Outside Blog Called Shot Master

Chris Ann it is unbelievable, the asset managers have told me that they love the amount of offers i generate on a property, it shows the hard work i am putting forth. For the senior management to say the offers too low,  they can counter them or they can say no, they are not forced to accept anything and often dont.... but dont shoot the messenger.
10:57am • #7
702,618 Points 55 Featured Posts Outside Blog Called Shot Master

Thank you for the comment James, i agree, and the law says all offers have to be submitted, i can not pick and choose... i simply submit everything that is in writing and accompanied by what was a required, in most cases it is a prequailification letter, or proof of funds and a copy of the deposit check.
10:59am • #8
643,431 Points 111 Featured Posts Outside Blog Called Shot Master

The short and simple answer to the is question is NO, they cannot NOT submit an offer that is too low.  Banks don't know the rules of real estate law and yet they continue to control the market and anyone who says that they don't........well they are a bit misguided.
12:02pm • #9
702,618 Points 55 Featured Posts Outside Blog Called Shot Master

Charita so true, they outline their own rules that often diregard state or federal laws.
12:25pm • #10
1,334,461 Points 128 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Scott,  What I think about submitting offers that are "too low"...bring them on!

I just left you a voice message.

Margaret

 
7:59pm • #11
NOV
08
2011
685,820 Points 22 Featured Posts Localism Sponsor Outside Blog Attended Rain Camp Called Shot Master

Homes in serious disrepair are a tough sell unless the price is well below market making it worth the work and risk a buyer will be undertaking. 
10:20am • #12
702,618 Points 55 Featured Posts Outside Blog Called Shot Master

Margaret thank you for the comment, sorry i missed your call last night, i was at basketball tryouts. I do not mind them, but one of teh banks i sell for sure has a problem. I just dont get it
12:09pm • #13
702,618 Points 55 Featured Posts Outside Blog Called Shot Master

Great point Al, homes have to be priced correctly to sell in this market, when they are, they sure are selling
12:10pm • #14
DEC
26
2011
1 Featured Post Hit Router

It is our fiduciary responsibility to submit all offers to the seller. No offer is too low. Its your job as the professional to let each side know what the market says.
9:48am • #15


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Scott Godzyk, One of Manchester NH's Leading Agents

Manchester, NH

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Godzyk Real Estate Services

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Scott Godzyk is the Owner/Broker of The Godzyk Real Estate Services located in Manchester NH. With 25 years of Real Estate experience Scott specializes in Listing and Selling Bank Owned Homes, Short Sales, Residential Properties, Condominiums, New Construction and Investment Properties. Scott services the counties of Hillsborough, Merrimack, Rockingham and Belknap. To contact Scott Godzyk please call 603-661-2121 or email sctprop@aol.com. his website is www.ScottSellsNH.com.


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