What Is A "Low-Ball" Offer???

I got an offer this week on a property where they included the comps they used.  They have 4 comps in the neighborhood with an average sales price of over $320K.  Then a property in another neighborhood that is smaller that sold for $299K ignoring the house across the street that just sold for $316K (which an appraiser won't).  So what do they offer?  The $299K price and open ended closing cost assitance.  Not even something in between. You just have to throw up your hands and say do you want us to take you seriously?

The selling agent has the first opportunity to call it a low ball offer and maybe that's what the buyer intended to write. Then the listing agent gets a look and may react like Cindy above. I would however take any offer seriously, mainly because I've been wrong in the past. The listing agent is probably reacting from pride, as in "I determined this price for the seller and your calling my skills deficient," but the real decision maker is the seller, and sometimes sellers. The listing agent should openly discuss options with the seller. Sometimes sellers have undisclosed needs.

Eventually if there is a loan involved the appraiser will have some say.

Good questions, William.  

An old computing maxim is garbage in, garbage out.

Unless your local MLS (or blogger) tracks the sales price discount from each list price, the "average" will always lose relevancy.

The best definition of list price I've coined is that it's the seller's expectation that may result in market value by virtue of the buyer's performance.

That said I would have to consider the Original List Price and all subesequent price reductions to effectively arrive at this nebulous discount.

I like the people who price their home too high and then they add to it. For example, if the comps for a neighborhood show a home should be priced at $300,000, then they will value-range price it at $310,000-$378,867. Then they get really upset with the low-ball offer that comes in at $295,000.

I know one couple who did that for three years and six real estate agents. Ultimately they sold but at $150,000 less than if they had just taken the first offer which was just $5,000 less. Stupid people.

William. I avoid the term "low ball offer". It's just an offer. It may be low but it's still an offer. Counter it and see if there is an agreement in there somewhere.

William, any offer is worth submitting and let the Seller make the decision.  But when I am Pre-Approving someone for a loan, and they already have a house in mind, and tell me that they are going to go in 50 - 100 thousand under asking price, I just say GOOD LUCK and leave it at that.

That type of Borrower I will usually end up doing several Pre-Approval Letters for before they come to reality and make a realistic offer.

I would say "all of the above."  "low-ball" is in the eye of the beholder.  Some buyers know and purposely make a low offer just to see if it flies.  It is really a matter of perception.  I have seen listings $150,000 over their real market value.  Any offer on them would be considered a low ball offer by the seller.

I like Bryant's comment.  It is still an offer.  We have a quote from someone taped on our wall (I don't know who.) "Don't be offended by any offer, be offended by the buyers who looked at your home and did NOT make an offer."  Every offer, no matter how "low ball" some may think it is, can be a starting point to a sale.

William. To me low is any offer the seller won't accept based on price.

William- Great topic. Our MLS provides statistics on list price to sold price. Many list their home with those stats in mind.

A low ball offer, in my opinion, is an offer that completely disregards recent sales in that neighborhood.  How many times have we had a buyer ask us to run comps and then disregard them to go on and offer a ridiculous and much lower amount than would be expected if they were indeed making an educated decision.  I've always wanted to say "why did you ask me to run comps if you already knew you were going to try to steal the house?  Why not just buy a mask and do it that way? " lol!