There are two very different things here.  The first is price to value.  The percentage of the final price to the list price is of no consequence when determining a "good deal."  If I list a house for $1m in a $250k neighborhood, and the buyer pays 50% of list... they did NOT get a good deal.  Conversely, had the property listed for $150k in that neighborhood, and a bidding wart ensued with the result being that the winning buyer paid $225k for the house... it might have been a good deal. 

The second thing is that I don't think you will find many successful agents that don't think a buyer should be able to lowball.  But, the seller has just as much right to tell the buyer to come back with something realistic as well.  I have had buyers offer 70% of the listed price, when the recent comps supported the listed price.  And those buyers lost out on the property because they thought there was some sort of firesale going on.

I prefer to talk with my buyers about value and reality rather than price and perception.  I may also fire buyers that don't want to offer realistic prices.  They might hit the right seller at the right time, and that is their goal... but I'm not writing score of offers on the off chance that lightning will strike.  BTDT

Yes but there is a difference between people negotiating a good deal and people thinking they will get every home for 25% less. You have to teach them what is reasonable.

Ross Quintana - Spokane Real Estate Expert 

Hi Bob

Interesting topic. Real Estate is local. So every region may have a different opinion. In an already depressed region, there is no hardline. Sellers are discounting severely and most are already at the bottom line. So coming in 25-30% means they simply cannot accept your offer. It would not pay the liens against it.

Once a property reaches a certain level, there is not much if ANY room there.  At least that is what we are seeing in this neck of the woods.  Also, in the highest demand range, while one low ball offer comes in a better one is received, which often leaves the lesser offer unanswered and the next thing they know..it is under contract. 

Strange market, tough times, and no definite right or wrong.

Lane:  You're right on target there with your explanation of value.  Regarding the 70% offers, I'm cool with that as long as the buyer's realize, that as you pointed out, that they are running the chance of losing that house (either by pissing the seller off to the point where they won't deal with them or by being out bid).  

If they start to whine because they lost the house, that's when they are in danger of getting FIRED!  ;-)  Thanks  for the comment.

Ross:  As Lane pointed out, sometimes 25% off the list price is the place to start if the house is over-priced.  My big thing is that the buyers are honest with me about their intentions and willing to accept the consequences of making the low ball offers.  Also, I drill into their heads that them low balling is more work for me, so that if they do it, I expect LOTS of referrals! ;-)

And you're right, sometimes it is a matter of teaching people what is reasonable.  This goes for sellers too!

Oh, one other thing....it pisses me off less to have somebody low ball, than it does when people dig their heels in over $500.00....just thought I would throw that in.

Bob Mitchell

ValueList Real Estate Services, Inc. 

Allison: Sorry about missing you there....I guess that your comment came in as I was writing my response to those other guys.  In response to you comment, you're absolutely right.  Many times the sellers simply CANT take less and in this case, if the buyer's want a bargain they are going to have to move on to another property.  

In Kathy and I's case, I did the homework and knew that there wasn't a lien against the property.  Not that it would have changed what we offered, but it was nice to know.  

Thanks for the comment.

Bob Mitchell

ValueList Real Estate Services, Inc. 

Bob, My sellers welcome any and all offers. We may not be able to come to terms buy we do try. As Allison mentioned the biggest problem my sellers have is their debt. Many of my sellers would be happy to sell at tany price but they just can't do it. So we wait.

Bryant:  What you just said is, to me, the mark of a good agent.  I've had buyers make decent offers only to have the agent tell me, "They won't even consider it!".  I've even had agents tell me that they weren't "even going to present the offer" which in Missouri is illegal.

I wonder how many more homes these agents would sell if they took a more business like approach to the business?  thanks for the comment.

Bob Mitchell

ValueList Real Estate Services, Inc. 

Bob, A few weeks ago we received an offer of 190,000 on a listing priced at $239,000. We negotiated for more than 2 weeks and finally had to let it go. At that time the buyer was at $199,000 and my seller was at $210,000!! We almost made it but the buyer was stuck on a figure in his head. The seller couldn't go any lower without asking for a short sale as they had no many to bring to closing. They wouldn't have qualified for a short. Comparable properties are selling at $235,000!!! It would have been a good deal at $210,000 but the buyer just didn't see it. But we tried and we tried hard. I've done deals that took 2 months to negotiate. I NEVER give up!!

Bryant:  Sometimes buyers don't know a good deal when they see it, but I guess that it's their right.  The fact that you have the "make it work if we can" attitude works to your client's benefit because deals close that if you had taken a more casual approach, the parties wouldn't have come together. 

I've had agents willing to call it quits when the parties were only a couple of grand apart.  I'm like, whoaaaa!  Let's work this out.  The sad thing is that when this happens, I sometimes get the feeling that the resistance is coming from the agent, not the client!

Thanks for the comment!

Bob Mitchell

ValueList Real Estate Services, Inc. 

Bob, I don't particularly like bottom feeders. I won't work with them. Too bad you aren't in my market. I could refer them all to you.

Bill Roberts

Bill....are you calling me a bottom feeder because I too went looking for a bargain?  Honestly, I don't have a problem with people looking for a bargain as long as they are serious about finding one.  What steams my oats is when you come across a bargain and the people who have been saying that they are looking for one, won't jump.

Also, the people have to be realistic in the sense that the chances of finding a bargain that is also everything that they desire in a property is pretty freaking remote.  On our "bargain" we spent 5 months updating it and are only about 1/2 way done.  thanks for the comment.

Bob Mitchell

ValueList Real Estate Services, Inc.