Why are you showing my listing when they CAN'T afford it???!!!

By
Real Estate Agent with Keller Williams Greenville Central

So the story goes.

 Realtor shows house to buyer client, client loves house, client lowballs (seriously lowballs) an offer, seller rejects and counters, offering closing costs if they'll be realistic. 1 week goes by, Realtor shows house to same client AGAIN, buyer make another (little better) lowball offer. Seller says X marks the spot and don't bother me with ridiculous offers when we're getting showings and 2nd showings out the wazzoo!

 

Today 4 days later. Realtor calls AGAIN. Seller still lowballing close to 30K. Now this is a moderately priced home folks-192K not the 3-500K where we get these ridiculous lowballs regularly. Last time, seller told me not to bother him with this buyer if they didn't meet X amount. Oh yes, I'll still call and really tick him off with this last offer. Have had two second showings this week and expecting a real offer tomorrow.

Why do Realtors take their clients into homes that are overpriced for their budget? Are they not doing their jobs of determining their client's comfotable monthly payments and staying within that boundary. Are they just wasting sellers and their buyers time by just "hoping" someone might take their client's lowball? It's very frustrating to the sellers and makes it so hard for us REALTORS knowing that we still have to have that conversation with our seller and present all offers: So here are the rules according to me- LOL

1. Comfortable monthly payment- I mean really, don't you have folks all the time who want to see homes and think they're qualified at a certain amount and their monthly comfort zone is significantly lower??? This is a crucial point. And then don't send them listings in the ranges higher than that zone! It' gets their hopes pinned on buying something they clearly cannot afford.

2. Talk realistically. It's not like there aren't 1.5 gajillion homes on the market. I'm sure there is one that fits their needs and their pocketbooks. Again looking at those higher homes is a waste of time for everyone unless it is an REO and MAYBE you'll have a shot.

3. Don't tell the Selling Realtor that you don't believe the home will "comp" out. Any good Realtor will run the CMA before pricing it so coming in at that standpoint makes it seem as if you think the selling agent is just pulling a price tag out of the hat (and I"m not thank you). That's very rude in my humble opinion.

I'd love to hear if you guys in other markets are experiencing this craziness and if you agree with the "Rules of Engagement"

Comments (151)

Sandy Noll
(RSVP Real Estate) 425.890.0878 - Gig Harbor, WA
RE Pro Serving Snohomish to Thurston Counties

Had the exact thing happen with my listing which is now pending!  Same buyer, two lowball offers and we ended up getting full price to the tune of $27k more than they offered in their second offer.  I agree, don't take your clients out and show them homes they'll fall in love with but can not buy.  It's not fair to them and a waste of everyones time.

Mar 15, 2010 03:07 PM
Connie Hall
All Brokers Real Estate - Portland, OR

I don't blame your sellers for not wanting to see that buyer or that agent again. The worst part for that agent is that seller will bad mouth them all over town.

Mar 15, 2010 03:19 PM
Gretchen Conley
Long & Foster Real Estate, Inc. - Columbia, MD
Howard County MD Real Estate

Love the cartoon!

Mar 15, 2010 10:36 PM
Richard Bazinet /MBA, CRS, ABR
West USA Realty - Scottsdale, AZ
Phoenix Scottsdale. Sellers, Buyers & Relocations

Hi Holly,

Don't go to bed so early... if you can't sleep one night and watch late night TV programs, you'll find a few on real estate where they teach get-rich-quick-schemes by low-ballling offers to sellers that are "highly" motivated. It's a fishing technique. They send multiple offers to multiple propeties in the hope of finding the right catch. Just seems you and your client may be a victim of this technique.

In AZ, we don't have to respond to a contract offer if these are the instructions of your client. So if client says don't send me offers less the "x" dollars, we can just let them expire them by ignoring them. This way they waste their own time and resources, and not yours or your clients.

Mar 16, 2010 12:43 AM
Gregory Bain
Mezzina Real Estate & Insurance - Little Egg Harbor, NJ
For Homes on the Jersey Shore

"It's not like there aren't 1.5 gajillion homes on the market", and 1 gajillion are way over priced for the market. That's why I showed your home - I did a CMA on it. I don't know if you get a lot of showing or offers that are higher than my clients - and I don't care.

Based on the market, market trend (downward - houses purchase last year are worth less today) I gave a good solid offer that could get your homeowner out and onward with their lives (I checked the public records and they will still walk away with a lot of money).

You may return the favor and show my listings. Send me an offer - I will present it. I may or may not encourage the home owner to take it - based on the market and the market trends.

Your Welcome.

Mar 16, 2010 01:33 AM
Jeff Wilmoth
Barrett Financial Group, LLC - Senoia, GA
If you need a mortgage, call us! 404-597-5662.

Amen!  We have a responsibility to take into account the buyers limits/needs. Time is money. The markets are stabilizing. Why waste everyone's time with ridiculous offers? Educate your buyer about the market!

Mar 16, 2010 01:40 AM
Anonymous
Ernest O'Dell
I have always been told that one should "get pre-qualified." Seems this was one of the mantras of a friend of mine who had been in real estate for over 50 years. She had seen so many different markets and economic conditions, she could have (and should have) written a book about it. I've always gone on the 30 percent rule, where I figured 30% of my NET (not gross) income as my affordable limit. Maybe others have something different. But if I was making only $5K/mo, and my taxes left me with $3,600 take home pay, then my payments SHOULD not be higher than $1,080.00 a month. Some might argue (or justify) more or less, but I've always played on that safe rule and it has worked well. Now, having said that, is there any way that real estate professionals can broach that subject with their buyers without offending them? Unless the buyer can just go in and write a check for 100% financing, they're going to need to look at a mortgage payment. If you roll in the interest along with the principle payments, would they find it offensive to even SUGGEST getting pre-qualified? I think pre-qualifying a buyer might keep some of these infomercials dupes out of the market. Da? Regards, Ernest O'Dell
Mar 16, 2010 02:25 AM
#144
Anonymous
Anonymous

Great post-  buyers and their agents have to  understand that sellers/listing agents are listing/pricing properties today to sell and have already  adjusted the asking price to their market.  

Mar 16, 2010 02:41 AM
#145
Tony Veltri
Century 21 Fine Homes & Estates - Placentia, CA

A couple things come to mind.  One is that we are in a free market economy.  The market sets prices, the REAL price.  We, the Agent, estimates the value based on our perception...the sellers.  Regardless of where I price a listing, I'll entertain ANY offer unless my sellers tell me they don't want anything under X.  This is my job and I'm paid very well to do this easy and quick task.  As the buyer's Agent, I'm looking to get a fair, mutually beneficial transaction.  If my buyers think their offer, characterized at "low ball" by you, is fair, then its fair to them.  You can accept or reject or if you are dedicated to getting your property sold, counter with a reasonable or fair counter as preceived by your sellers.  Don't automatically think that they are unqualified or wasting your time, they are qualified buyers and on the chance they could save $15,000, it's worth it.

Second thing is while there are a number of second viewings and you are EXPECTING a "real" offer, you don't have it now and should not shut the door unless that offer has been received.  I remember a saying that is true, "a bird in the hand is worth two in the bush".

Good luck to all, it's sure interesting out there!

Mar 16, 2010 06:16 AM
Catherine Marrone
Integrity Residential Brokerage LLC - West Newbury, MA
West Newbury MA real estate, Essex County

This is probably a case of "Bargain Basement Buyer" who wants to buy but only if they can pay pennies on the dollar.  Sometimes these "Bargain Basement Buyers" get realistic and start submitting offers more in line with market value.  Sometimes they don't, at which point the agent should stop taking them out OR show them properties in the price range that they've been submitting offers in.  That might induce a dose of reality into the scenario!

Mar 16, 2010 08:48 AM
Rodney Mason, VP of Mtg Lending
Guaranteed Rate NMLS# 2611 - Atlanta, GA
AL, CA, FL, GA, IN, NC, SC, TN, TX, VA

Great post.  It's amazing how many buyers just don't understand the correlation between a sales price and a monthly mortgage payment.  Others just think they can steal homes based on how the media portrays everything.

Mar 16, 2010 10:40 AM
Jirius Isaac
Isaac Real Estate &TriStar Mortgage - Kenmore, WA
Real Estate & loans in Kenmore, WA

You know, it depends on if the house is priced right or not.  I always look at higher priced homes for that reason for my buyers.

Mar 16, 2010 04:59 PM
Alix Pinzon
Open Mortgage, LLC NMLS # 2975 - Downey, CA
(562)743-6086

I think it's totally unprofessional to send low-ball offers.  Time is much too precious to waste it.

Mar 16, 2010 07:00 PM
Anonymous
Carol Succarotte Daniels

I agree! Nothing fries me more than getting ridiculous low ball offers.  I am not sure why agents are even out there showing homes buyers cannot afford.  Unfortunately, I think we are dealing with a couple of things....1. buyers hear about the "deals" that are being made out there.  They are not realizing that the majority of the "steal of the deal" has already been established in the pricing of the home.  Values are down (for now).  2. I am not sure how their realtor is counseling them (if they are).  I always tell my buyers their are 2 numbers we need to know before we start our home search.....1 is what can you afford and  2 what are you comfortable at.  I tell them that usually those 2 prices will be different but we need to know the range.  Then I let them know how their mortgage is affected per thousand.  I will show them homes in their comfort zone and they know if they want to move it up a notch it will affect their payments by $xx .  Our responsiblity as a realtor is not just hopping in the car, and showing houses and making offers whether they are good offers or not.  We need to educate our clients (buyers and sellers).  If a buyer wants to pay $50 thousand less on a house perhaps he needs to look at foreclosures.   And for that buyer who CAN afford the price range they are looking at BUT wants to offer that low ball offer, we as professionals need to inform them of the ramifications of that action and to educate  them on how to make a good offer.  i guess we need to find out if they really like the house and really want the house ---- motivation.  Guys, after awhile the buyer will also get sick of losing homes and get discouraged with the process with you.  Their next realtor will not have to go through the 6 months you just went thru!!!!  Hmmm just a thought

Mar 17, 2010 01:32 AM
#151
Sandra Nickel
Sandra Nickel REALTORS - Montgomery, AL
The Hat Team

My favorite dialogue in managing low lowoffers:

Mr/Mrs Seller, nobody EVER got a bargain without trying; and some folks just HAVE to try!  I;ll bet even you have tried to get a bargain on something at some time.

Take a deep breath, smile, and tlet's give them a reasonable response.  If they don't then come up a good bit, ell me to tell them to get serious or move on.

Mar 17, 2010 10:10 AM
Wayne B. Pruner
Oregon First - Tigard, OR
Tigard Oregon Homes for Sale, Realtor, GRI

We all hate low ball offers, but it's part of the game. I warn my Sellers in advance that this will happen. I work on those low offers and about 30% of the time I can get them to something that is acceptable to both parties.

Mar 25, 2010 12:01 PM
Anonymous
Alcatraz80

Because the housing market is still inflated by 25-45% in respect to income.
Because the cost of homes has doubled since 1996.
Because interest rates are too low for housing to appreciate properly.
Because appraisers and brokers are still drunk on the bubble that hasn't truly burst, yet.
Sounds to me like the potential buyers are wise to the game....

May 10, 2010 09:01 AM
#155
Matt Robinson
Professional Investors Guild - Pensacola, FL
www.professionalinvestorsguild.com

I agree.  I never show my clients homes that are above their price range.  I'll tell them straight up that it's a waste of time (unless we're talking about $5k or so).  Long gone are the days of 15-20% under list being accepted like in 2007 and 2008, at least in our market.  Markets change all the time, and buyers need to listen to their Realtor.  We see these changes before anyone does.

Aug 22, 2010 06:26 AM
Anonymous
hahaha
crybabies
May 24, 2014 11:16 AM
#157
Inna Ivchenko
Barcode Properties - Encino, CA
Realtor® • GRI • HAFA • PSC Calabasas CA

I heard this question too. But some buyers just like low-balling. I work with few buyers like that, they always low ball even if they agree that the property value is much higher. They just hope for miracle of finding a ''deal''....

That's one of the reason I prefer to be a listing agent. 

Sep 02, 2017 11:13 PM