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Low Ball Offers, Not All Homes Are Distressed Properties

Reblogger Larry Hansen
Real Estate Agent with Calif Desert Realty

Interesting post by Diane Casale on making low ball offers. I always suggest my buyers start out with a low ball offer in this current market envirnoment, as you just never know what the seller's bottom price is, and how badly they want or need to sell. Unless the seller has unlimited time to sell, or does not need to sell, they may have the luxury of telling the buyers to take a hike. However if they are smart, they will counter back and keep the dialog going and see where it ends up.

If I am representing a seller, I try to warn them that the first offer will more than likely be a low ball offer, in this market, and to not be offended.

Bottom line.... any offer, low ball or not, is a good thing. If handled correctly by listing agent, and clients warned ahead of time, it should at the very least get a dialog going between buyer and seller which can lead to a mutually satisfactory and acceptable offer. Never lose an opportunity to get a dialog going between buyer and seller and keep it going. Always encourage the seller to counter back. Keep it going, try to manage the emotional aspects, and chances are good that you will get the home sold!

Original content by Diane Casale 000088288

Please do your homework and get educated about making low ball offers. I have been on both sides of a transaction that included a low ball offer and have learned a great deal of what to and not to do.

I will NEVER forget my first low ball offer on a home that my Buyers wanted to make. I couldn't find any reason to offer a lower price than it was but my clients insisted that they low ball. "Lets ask 20% less because that is what all the TV shows say to do" is what they told me. This was my clients' dream home. They absolutely loved it but wanted to see if they could get real deal. I advised strongly against it but did as they asked. Days went by with no word from the sellers agent. Finally, the agent called me back to tell me that they are rejecting the offer and do not want another offer from my clients. WOW! I was not expecting that. I had the unpleasant task to tell my clients. They were not happy to say the least. I asked the other agent why they don't want another offer from us, you know what he told me? Because he has been in Real Estate for 50 years and knows that my clients will NEVER be satisfied~just by looking at the offer received. His clients were totally offended.  After about 30 more homes and a closing that almost didn't happen due to my Buyers, I realized that he was right. From that point on, I advise my clients in advance about putting in offers.

Some things to consider are:

Do your homework:

1.  Is the home priced correctly? Is the home in distress? If it is, advise your client of those facts. You will have a better chance to have a "low ball" offer accepted if the home is a short sale or foreclosure. 

2. Are you adding in concessions to your "low ball" offer?If you are, it probably won't happen? Not only are you asking a much lower price on a home but, to add salt to the wound, you want the seller to pay for closing costs/prepaids/escrow and a home warranty. Rejected!

3.  Low-ball offers that are accepted are not good to the neighborhood.Homes that are purchased at a significantly low price than its real value have a negative impact on the neighborhood's real estate market~It lowers the value of the homes within the neighborhood. Because of the strict CMA's the banks use (they only go 3 months out in our area), the house sold will become a comparable item for making CMA's. New sellers would consider the selling price of your home so that they can name their price tags. Moreover, buyers use them to lever their offer. If you sold it cheap, future offers for homes in your neighborhood will also be within the range price of your acquisition.

4. Earnest Money.A seller will be more willing to work with a buyer if they give a larger amount down for earnest money. Don't skimp here. If you don't have the money to put down, you are not coming across to the sellers like you are serious buyers and seem like you are just "testing the market" as a Buyer.

5. And this is a doosy! If you are already working with an agent, don't call the Sellers' agent and say that you are not working with any other agent to get information about the home (information that the buyers agent could have found out) and then proceed to state that you had put in an offer on another home which was rejected by the Seller because of low balling!?!?!

TRUE STORY! Got the call. A person called and inquired about one if my listings. The first thing out of my mouth was "are you working with another agent?" Her reply was "well, not really." She had seen my listing on the MLS for many months and noticed the significant price drop ($10,000). I told her all about what the house has to offer and that the Sellers wanted the home to be the best priced home in the neighborhood (which it was). She was extremely interested but then proceeded to tell me that she fell in love with another home recently and offered $149,000-which was way below what the listing price way. Told me that the Sellers countered with $10,000 morethan the asking price (which they had already dropped $25,000)! YIKES. She wanted my opinion as to why that would be. I told her that most sellers don't like to be low balled and they probably added the price of all her concessions into the price of the home that was already a good price.  I then ask her who her agent was? She tells me. I tell her that if she would like to go see the home, to give me a call. Yep, you got it. She was playing us both and was working with another agent (after a quick phone call on my part). Next thing I know, WHAM, got the same kind of low-ball offer on my property from this Buyer~which happens to be $15,000 less than her rejected offer.

Agents, please also advise your clients to not speak with the opposite agent-even to just get information, That is YOUR job. Buyers, you have a way of letting things slip pertinent to your offer.

A Buyer and their Agent need to communicate. In today's Buyer's market, most home prices are dropping to what they should be. Save the low ball offers for those homes which are over-priced, short sales or foreclosures.

Happy House Hunting.


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Huntsville, Alabama

diane casale, casalesells.com


Mary Macy
Top Agents Atlanta Metro - Roswell, GA
Top Agents Atlanta Metro

It is a tough market, our job is to negiotiate all offers.  You never know how high a buyer will go or how low a seller will go until you get the offer on the table.  People need to not take it personally and just roll with the punches, this is a difficult time.

Sep 07, 2010 05:01 PM
Pete Xavier
Investments to Luxury - Pacific Palisades, CA
Outstanding Agent Referrals-Nationwide

Great post from the past.

I'll help clean up the spam.

Nov 16, 2012 03:47 PM