"Responding to Low Offers" - Seller Strategies in Kitsap County WA

By
Real Estate Agent with Fathom Realty West Sound WA State 52404

A while back, I published an article on my local real estate blog, SOUNDBITEBLOG, entitled "The Art of Offering Less." It ended up becoming a 3-part series catered towards a Buyers perspective and provided some practical guidance/advice on how to draft offers that were less than the listing price.

In the 1st article we identified the market dynamics that tend to encourage or breed low offers.

In the 2nd article, we shared various strategies for Buyers to achieve success with low offers.

In the 3rd and final part, we discussed the risks that are inherent with making low offers.

Just recently, I received an offer on one of my listings, a secluded Hood Canal view property near DeWatto Bay in Tahuya WA.How-to-respond-to-a-Low-Offer-in-Kitsap-Count-WA-real-estate

Prior to faxing over the offer, the Selling Agent gave me a heads-up that the offer was going to be less than the current listing price. Evidently, the Buyer's home, which had been on the market for nearly a year, had just recently gone under contract, but at a price that was significantly lower than their original asking price. Even after 3 price reductions, another larger home on the same street had just closed for $23,000 less. Since they had taken such a huge hit on their home, I guess they only felt it reasonable to expect other Sellers to be as equally accommodating.

The Selling Agent informed me that their offer was going to be approx. $30K below the Listing price, and wanted to know what I felt the Sellers response would be. I told her that I would present any and all offers, and that it was up to my Sellers to determine what kind of response was appropriate for them.

When the offer finally came in, the offer price was actually $35K below our Listing price, and also asked for the Sellers to contribute $11K towards closing costs, making the effective net offer nearly $46K below what my Sellers are asking.

Typically, when counseling my Sellers, I tell them that every offer should be considered as a serious offer, regardless of how low the offer price may be. Usually, I advise them, at the very least, to counter back at a price they feel comfortable with.

However, after discussing this offer at length, my Sellers felt that the disparity in price was just too substantial, and did not warrant their consideration.

It was one of those rare instances where I had to tell the Selling Agent, "Thanks, but no thanks!"

Once again, my previous point was reinforced:  If you're going to submit an offer that is less than asking price, make sure it's enough to at least capture the Seller's interests and establish a starting point for negotiation. Also, realize that market dynamics do not apply equally across the board for all properties, even if they're in the same State, County, City, or even the same neighborhood.

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Rich Jacobson is a licensed real estate professional providing knowledgeable empowerment and relentless representation for his clients of residential properties and vacant land throughout all of Kitsap County WA and portions of Pierce, Mason, and Jefferson Counties. You can also find him at KitsapLife.com, SOUNDBITEBLOG, and Crabbing in the Hood.

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Rich Jacobson is a District Director for Fathom Realty and a licensed REALTOR®; an avid Crab Hunter, Clam Digger, and Oyster Shucker, He is the Social Media Evangelist for Life on the Kitsap Peninsula & The Western Puget Sound in scenic WA State.

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low offers
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Rainmaker
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Paula Swayne
Dunnigan, Realtors, Sacramento (916) 425-9715 - Sacramento, CA
Realtor-Land Park, East Sac & Curtis Park -Dunniga

Hi Rich!
You couldn't be more right on.  I had an agent offer $65,000 less than asking.  When she called, I told her I would do my best.  She asked what comparables I was using, I told her...only to be argued with that they weren't valid comparables but hers was! So, may I add...don't argue with the agent who is presenting your offer.  It isn't the greatest way to create an advocate for your offer!  Needless to say, the seller felt the same way as yours...we were too far apart to respond.  She has since called to ask the status of the property...I just tell her it is available!

Jun 04, 2009 12:56 PM #1
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Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Savvy Realtor - Ann Arbor Real Estate

I see this all the time....low offers then 6% closing costs.

The buyer agent is offering 2.3 of the asking price and it has been on the market for 2 weeks.

Now I am really careful with my CMA's so I know I am pricing ahead of the market.

I try to make the best of it when I meet with my sellers but it starts off  on the wrong foot.I do prepare them at the listing time but it is still hard for them to take.

 

Jun 04, 2009 01:18 PM #2
Rainmaker
1,244,485
Steven L. Smith
King of the House Home Inspection, Inc. - Bellingham, WA
Bellingham WA Home Inspector

Rich,

I am glad that I just inspect the low offers and do not have to bicker with all parties involved.

Jun 04, 2009 01:51 PM #3
Rainmaker
259,533
Melina Tomson
Tomson Burnham, llc Licensed in the State of Oregon - Salem, OR
Principal Broker/Owner, M.S.

Rich I had my buyers want to write a low offer on a property last year and the listing agent called me to confirm he received it and asked me if I wanted it back shredded...

I wrote an offer for 10% less than asking last week and it was rejected with no counter because the seller was offended that the buyer asked her to hire a plumber to investigate the smell in the laundry room (probably the drain just needed to be snaked).  Not offended by the price, but offended by that...

 

 

Jun 04, 2009 02:17 PM #4
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William Johnson
Retired - La Jolla, CA
Retired Real Estate Professional

Hi Rich, I have to say, your response is as I expected and of course I respect it because I feel it is exactly the way to approach this and the discourse is exactly as  I would employ.

Jun 04, 2009 03:15 PM #5
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Kristal Kraft
The Berkshire Group Realtors - Denver, CO
Selling Metro Denver Real Estate - 303-589-2022

The market brings out many "bottom feeders."  So many are time wasters because they don't realize the homes are priced according to the market, which has adjusted.  I guess they feel they are going to "get lucky" and strike up a deal with a desparate home owner.  It certainly is possible, but not probable.

kk

Jun 04, 2009 03:19 PM #6
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Jeff Dowler, CRS
Solutions Real Estate - Carlsbad, CA
The Southern California Relocation Dude

Rich - we have been seeing a long period of low ball offers, in general. Adn with the inventory many buyers seem to feel that most sellers are desperate adn will sell at rock bottom pricing, Certainly some must do so, but the very low offer really sets the tone of the negotiation, or more likely precludes it. It seems that even if we prepare our sellers that they will likely receive a low offer, to not take it personally, and consider responding, when the reality hits it simply is not that way. And some buyers really need to be told - sorry, you are not showing a serious interest that warrants my time and energy.

Jeff

Jun 04, 2009 03:52 PM #7
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Steve Shatsky
Dallas, TX

Hi Rich... I see this all the time, especially on my short sale listings, and still cannot get used to how low people are offering.  It's amazing that 18 months ago, if anyone had suggesting making such a ridiculously low offer that they would have been concerned about offending the sellers... these days nobody seems to be worried about it!

Jun 04, 2009 06:36 PM #8
Rainer
304,164
Cynthia Tilghman, Realtor® Onslow County NC Home Specialist
Kingsbridge Realty, Inc - Hubert, NC

Hi Rich,
Yes, I have had the same experience with some Sellers and I agree with Jeff, no matter how hard you try to prepare Sellers and tell them not to take it personally-----they do and they are insulted.   

Jun 04, 2009 11:53 PM #9
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Cindy Jones
Integrity Real Estate Group - Woodbridge, VA
Pentagon, Fort Belvoir & Quantico Real Estate News

I recently received an offer 40K below the list price on one of my properties.  My sellers wanted to ignore the offer but even though I didn't think we could come to a comprimise we finally did.  It took understanding, patience and a lot of back and forth.  In the end we have a deal and hopefully a settlement by the end of the month.  Sometimes it works, sometimes it doesn't.

Jun 05, 2009 01:11 AM #10
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Lee & Pamela St. Peter
Berkshire Hathaway HomeServices YSU Realty: (919) 645-2522 - Raleigh, NC
Making Connections to Success in Real Estate

Rich - we'll use a memo to buyer.  It's not a counter but let's them know we appreciate that they have interest in this property and would like to consider their offer but not as it's been presented.

Jun 05, 2009 02:27 AM #11
Rainmaker
1,046,890
Bill Gassett
RE/MAX Executive Realty - Hopkinton, MA
Metrowest Massachusetts Real Estate

There are certainly times where the sellers response warrants no response. Most of the time I try to tell my seller clients it is not where they start that mattersbut where they end up.

Jun 05, 2009 02:39 AM #12
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Patricia Kennedy
RLAH Real Estate - Washington, DC
Home in the Capital

Rich, even in this kind of market, too low is just too low.  If the buyers are serious, they can always resubmit the offer with a new and improved price on it.

Jun 05, 2009 03:45 AM #13
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Rene Fabre
First American Title - Seattle, WA
Marketing in the Digital Age

Rich: I think the 'no response' from your sellers was absolutely correct. In the quagmire this market is in there are too many circumstances going on that affect property value... We can't make assumptions based just on sales price.

Jun 13, 2009 04:38 AM #14
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