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What is a Reverse Offer?

By
Real Estate Agent with RE/MAX Compass 0524642

It's rare, but reverse offers do happen. After a Realtor show's my listing I could simply discuss a strategy with my seller & present an offer to the buyers agent. Since it’s the holidays lets pretend the list price of the home is $10,000,000. After the home has shown I type up the offer with my sellers information and an offer of say $9,500,000.00.

The buyer has now been given an offer to consider, and hopefully proceed with. The seller won't sign off on the offer until earnest money has been delivered, parameters have been fully negotiated and of course pre-approval expectations have been met. It's important to understand that there is no one way to conduct a reverse offer. You could offer more attractive terms and conditions then what's considered usually and customary. You could toss in a 90 day closing, furniture, closing cost assistance, golf memberships, a riding lawn mower and much more. The idea is to stimulate interest, even if it's unconventional.

A regular offer is generated by the buyer’s agent to be presented to the seller. In all cases, it’s never a contract until the seller signs it!

 

Posted by
Greg Nino
Realtor
RE/MAX Compass 
Direct & Text 7 days a wk: 832-298-8555 
 
 
Realtor since 2004
Mediator & Arbitrator for the TX Assoc. of Realtors
Member of the Professional Standards Committee for the TX Assoc. of Realtors
Arbitrator for the Comptroller's office for the State of TX for Arbitration of Property Tax Values

 Member of the RE/MAX Hall of Fame & Platinum Club

 

The information contained in this blog is believed to be reliable and while every effort is made to assure that the information is as accurate as possible, the author of this blog, and its comments disclaim any implied warranty or representation about it's accuracy, completeness or appropriateness for any particular purpose. All information is copywritten and the property of Greg Nino.  

Comments(100)

David Evans
RE/MAX TOWN AND COUNTRY - Cumming, GA
HUD NLB Cumming GA

Today- whatever works! Try it and see how the dust settles. Heck it can only help...

Dec 17, 2011 04:24 AM
Jennifer Chiongbian
Specializing in all types of Manhattan apts & townhouses - Manhattan, NY
Real Estate Broker - NYC

At $10m or luxury style homes in tha tprice point, most of the time there is custom furniture that has to be part of the contract since it is so unique to the property, I am not suprised.

Dec 17, 2011 04:31 AM
Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

Mark #83

Why would there be? Please explain.

Dec 17, 2011 04:44 AM
Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

Mark,

Forgot to suggest that my sellers are almost never home for showings. They wouldn't even know the buyers name. But good question. Took me a second to understand why you asked.

Dec 17, 2011 04:47 AM
Woody Edwards
First Choice Realty, Inc - Chesterfield, VA
A Realtor® Who Answers His Phone!

I have heard of this before, but never tried it.  I guess it boils down to how serious the seller is!

Dec 17, 2011 04:51 AM
Linda Jamail Marshall
Linda Marshall,Houston Texas, Linda Marshall, Realtors® - Houston, TX
Broker, ABR,QSC,RECS,ACRE - Innerloop Houston, Tex

Happy Holidays Greg, Greetings from innerloop!

This is very out of the box and quite cleaver.

Thanks for bringing it up.

Linda Jamail Marshall,Broker,ABR,QCS,RECS,ACRE

Dec 17, 2011 05:01 AM
Michael J. O'Connor
Diamond Ridge Realty - Corona, CA
Eastvale - 951-847-4883

A great original idea!  I love trying to think outside the box and this one never came to mind.  In my market we are almost always dealing with REOs and/or short-sales so opportunities are limited.  But if I knew that I had a short-sale listing that could be sold at a given price, this might be one way to really stand out compared to other short-sales.

Great post!

Dec 17, 2011 06:39 AM
Hank Miller, SRA
Ansley Real Estate/Christie's International - Roswell, GA
Associate Broker & Certified Appraiser

I've written five and sold three homes with reverse offers in the last two years. If I have a buyer coming through more than twice, something is bringing them in. In all three occasions, I had a buyer agent that was dead from the neck up; I essentially outlined the reasons the client would do well, handed them data and talking points and told them to look like a hero (at least for a little while before going back to the zeros they were).

 

Dec 17, 2011 06:40 AM
Greg Nino
RE/MAX Compass - Houston, TX
Houston, Texas

Hey Linda (neighbor)

Glad to hear from ya!

Dec 17, 2011 08:45 AM
Janice Styles-Hall
Hunt ERA - Clifton Park, NY

I just did a reverse offer a few months ago. the buyer accepted it as written and we closed!  First time I tried it and I plan to try it again in the right circumstances.

Dec 17, 2011 09:00 AM
Kathy Dowd
EXP Realty, 239 220 4133 - The Villages, FL
Consider it SOLD

This is why I love AR...new ideas all the time..Thanks for sharing

Dec 17, 2011 11:15 AM
Jeff Hollister
Native Californian with 20 years serving OC Buyers & Sellers - San Clemente, CA
Real Estate Broker, Serving Orange County, CA

Thanks for sharing, Greg. I've never tried that, but will put that arrow in my quiver for use in the future.

Dec 17, 2011 12:17 PM
Frank Iglesias
Working With Houses, LLC - Atlanta Real Estate Investments - Lawrenceville, GA
Atlanta, GA Real Estate Investor

Definitely works.  It also works in some cases to simply ask the buyers agent if they are ready to present an offer.  That seems to work much better than a stock follow up of 'what do you think of the property?'  Even if an offer does not come out of it, we usually get better feedback by presenting a 'ready to do something now' position.  99.9% we are ready to do something now anyway!

Dec 17, 2011 01:30 PM
Melissa Brown
Helen Adams Realty - Charlotte, NC
Realtor - South Charlotte NC Homes for Sale

Hi Greg!  Thanks for the post!  I did a reverse offer one time and it worked!  After I convinced my sellers that I wasn't crazy, we prepared a reverse offer for some buyers who had had 3 showings on my listing.  I just thought they needed a little impetus, and it worked.  you all should try it!a

Dec 17, 2011 01:31 PM
Gene Riemenschneider
Home Point Real Estate - Brentwood, CA
Turning Houses into Homes

I have heard of them, but never seen one.  Is there are special form?

Dec 17, 2011 02:25 PM
Kate Akerly
Kaminsky Group - Manhattan Beach, CA
Manhattan Beach Residential Sales

I could see it working in a weak market.  However, I imagine that most of our sellers would have little interest in negotiating against themselves.  If your property has been on the market for a while, I can see how it could be a useful tool to generate interest.  

Dec 17, 2011 05:13 PM
Dorte Engel
RE/MAX Leading Edge - Bowie, MD
ABC - Annapolis, Bowie, Crofton & rest of Maryland

Dear Greg,

This is a great idea for a unique property with few showings, because at the very least, it might spark another conversation amongst the buyers ("they had a turbine on the property? I did not see the groundskeeper garage, they are talking about"). As Tammie (#45) mentioned, at the least it will make upt the buyers mind for or against.

Dec 18, 2011 03:44 AM
Evelyn Kennedy
Alain Pinel Realtors - Alameda, CA
Alameda, Real Estate, Alameda, CA

Greg:

I have never heard of a reverse offer, but I can see that in some situations it would be a way of enticing the undecided buyer to take a leap.  Thanks for the information. 

Dec 20, 2011 11:39 AM
Christian de Almeida
Bal Harbour, FL

I've never heard that! Wouldn't that generate a lower counter right away by thinking the seller is desperate?

Dec 24, 2011 03:14 AM
Debra Gould
Staging Diva / Six Elements Inc. - Toronto, ON
The Staging Diva

Love to find real estate agents who think outside the box, well done!

Dec 27, 2011 03:03 AM