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

Ah, this is a tough one. On the one hand, certainly if you are always looking at homes that are priced too high for the budget...then that's just a silly waste of time. But I once told a buyer not to write an offer $120,000 under list on a $1.4 million listing....and the sellers took it. Didn't even counter. So.....you never know unless you try

Very good conversation and valid points on all sides. It really depends on the house, the market and how the buyer's agent prepared the buyer.

I don't show buyers anything out of their price range.  But if they want to make a lowball offer (I've already shown them the comps), I explain that I'll present it but I can't back it up. 

As a listing agent, I had a home that we reduced to $450,000, the price it should have been from day one (they had been listed with a different agent).  Got an offer of $406,000.  Sellers were not happy but I told them to counter, let's see what happens.  2nd day of countering, offer #2 comes in, higher than offer #1.  The 1st buyer didn't believe there was another offer.  House sold to 2nd buyers for $448,000!

On the other hand, I sold a home that was on market for only 22 days and my buyers got it for $27,400 off list price.  I didn't expect that, but I negotiated for my buyers and I'm their hero and the sellers were happy.

It's still a buyer's market in my area and a property can be priced correctly but still not sell quickly.

Agents have to stop taking things personnally.

We are being paid for being a buffer between the buyers & sellers. As buyers'agents, it is our duty to write & present offers as instructed. Granted, we can voice our opinion on the likelyhood of a low ball offer being accepted... And as sellers' agents we have the duty of presenting all offers to the sellers.

In this market with growing number of short sales & foreclosures, it is not unrealistic to expect sellers to accept an offer at well below asking!

Holly,

I have been on both sides of this arguement many times.  It's a frustrating one to say the least.  I have buyers looking to lowball on short sales most often, especially if it's been on the market for more than 90 days, and there is a foreclosure date already set.  They have about a 50/50 chance of getting the offer accepted. And I have often seen properties that just plain don't comp out for the asking price.  In the Phoenix market this is very common- the comps are all over the map in many areas!  You can have 2 identical track homes that sold 2 weeks apart for $30K difference in the price (around $120K-$150K price range).   However, on a normal sale, it is a fine line we walk with our Buyers to convince them that "the market" (as defined by the media frenzy) does not dictate what a normal, reasonable seller will take for their property.

All I can say, is that we don't need to take it personally, and neither should our Sellers.  Just let them know that there are plenty of Buyers/investors in the market who are looking to "steal" something, and to let that buyer move on to the next seller.  We'll wait for a more realistic buyer.

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.

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.

Love the cartoon!

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.

"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.

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!

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!

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!

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.

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.

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

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.

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.

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.

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.