Several of the realtors that have referred prospective buyers to me have voiced concern and frustration due to lowball offers. These are professionals who have done their best to advise clients that such offers will not be accepted, and, maybe not even countered. Yet the perception persists that a property can be 'stolen' due to market conditions. A young buyer I qualified lost out on a HUD home for that very reason. The realtor told him there was much interest in the property. Yet he chose to go in low on a home that was tailor-made for him. It had location, proximity to his shop, a large yard backing up to woods, and a work garage with a brezeway connection into the mudroom. Perfect for a construction worker. He lost the bid, as I'm sure you guessed. The home had been listed at $135,000. The people who got the home bid $137,000 with 3% closing costs back from the bank. My guy was convinced he could get the house for $10,000 under, so he bid $129,000 and asked for the same 3% concession. The difference is probably about $30 a month in payment. Now he's out looking for a house that has all the amenties the first one had! Out looking with a very exasporated realtor, I might add.
I'm seeing this more and more on the low end stuff. We all know that its one thing to bid $20-30,000 under on a $300-400,000 listing. Its another matter to bid $20,000 low on a $120,000-140,000 property. And then ask the seller to pay closing costs to boot!
Here's what I've been telling these buyers. First, yes, your Uncle Louie may be correct when he tells you that you can underbid and 'steal' a property. But what you, Mr. Buyer, must realize, is that the property that you could possibly steal may not be the one you want!
I go on to explain that the home the young buyer desires, close to the mall, with good school systems, nice neighborhood, etc.... will be desirable to other buyers FOR THE SAME REASONS!
I tell them to leave the 'stealing' to the investor purchaser, who is looking for the best bang for the buck, who doesn't care about school systems or neighborhoods because, of course, he's not going to live there. Such a buyer is in a totally different situation than you, Mr. Buyer. He can lowball, and, if rejected, can either go higher or simply move on to the next one. His kids may not ever even SEE the place, much less walk to the store or ballfield or go to the school, as your children would, Mr. Buyer. Then, of course, I tell them that its their choice, but, if this is the house they want, and if they're expecting that seller to pick up some $6-7,000 in closing costs, they may want to come in with a solid offer.
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