Stupid Lowball Offer...or No Offer...You Choose

A good buyer consultation prior to going out and showing homes is  a great tool. Know your market statistics, and know your personal statistics. It is our job to educate buyers BEFORE they ever see a home. We get to choose who we work with! if you can't stomach the buyer that up-front tells you he wants to lowball, then don't take him on as a client- refer him  out if needed. Why waste time? Yes, low offers happen, and we should know that's what's in their mind as a  scenario right after we meet. Educated and preapproved.

Most homes below 400 K sell over asking price in Phoenix now with multiple offers.

But I know how frustrating it can be.

Brenda, I totally agree with you on that on. Our jobs is to bring buyers & sellers to a "meeting of the mind". Buyers & sellers wouldn't need us if the buyers always offer full asking price!

Great post and there are very interesting comments also. I am currently working with a client who wants to get a "deal" on his property. We'll see how it goes ;)

Brenda - Very good blog. I see no one really likes to give or get a low ball offer. However, in this market, I tell my sellers, you just can't get offended by a low ball offer. Some people are just trying to see what they can get. Plus, they may be coming from other states that have a worse market than our or they may be watching too much news about the market. We have a pretty strong market. Low ball offers often result in losing the house to someone else. If it is priced right and looks good, there's a possible multiple offer situation about to happen. These homes are going for 97% to over 100%.

Of course, we present all offers. I hate when a buyer finds a home they absolutely love and still goes in with a ridiculous offer then loses it. Yes, it is happening!

However, we do have some homes that are overpriced and as a buyers agent, it's good to do your homework, and know how to present an offer to either get the listing agent or the seller (or both) to understand why the property is over priced. This can be the most challenging situation.

I so agree with you! I work both ends with sellers and buyers and every client wants the same thing; more money or cheaper price!  The comps are a saving grace for us.

I was up near your neck of the woods yesterday. At the Luling BBQ cook off. Sure did have a good time!

Brenda, we have to keep the personalities out of it and just do our job - with our Realtor hat on :) An offer is an offer, in this market se should try to make it work.

Sharon

Holy comments, Batman!  This post sure stirred the pot.  And as a P.S. to a low-ball I wrote up last Friday-- and I did NOT want to do it -- I told the buyer, "Once you start getting the seller to say "No" it's hard to get them to say "Yes" again." 

Brenda,

Lets get it on paper, then the possibilities are endless.

I don't consider 10% off as a "low ball offer"  20% is my line.  10% seems to be a "normal" concept.  I will always ask the buyer's agent for their input and comps before presentation.  If it is a "short" time line for an answer it will always come back at full price.  If it is 20% low it may come back higher than list by 20%.  If the buyer;s agent doesn't give reasons or respond it will be a HARD counter but keep the communication going.  Some buyers will always come in low but if they want the home they will come to reason.  If not, BYE BYE.  If the home is priced right then it should sell for 95-97 of list.

Brenda,

I totally agree. I just closed an Agreement that started out $30,000 below the asking price. Plus the Seller was on a world cruise, so everything was done via e-mail. So I had to present and state comps and my case, try to put emotion into it all in an e-mail. After 10 days of negotiations, the Buyers ended up increasing there offer to only $10,000 off the asking price. Get it in writing, you just never know the Buyers motivation.

I am not sure if I saw this originally. I hate low ball offers. But it is an offer and a possibility!

This was great post! It got a lot of responses too, a few too many to read them all but agree with the ones I read and you. We have to be the professional when presenting the offer to the client. A home is worth what a buyer will pay BUT only if the seller will sell at that price. There are so many circumstances that no two buyer or seller are the same. I put the facts in front of the client and encourage them to counter. On flip side I tell my buyers they might offend the seller in their attempt to get a 'good deal'

Brenda, you are one savvy agent. You know how to take a lowball offer and meke something out of it. This discussion is incredible - no wonder national journalists picked up on it!

Sharon

I think that it's not the "dollar amount" under Asking Price, but also the "percentage" under Asking Price that determines if it's a lowball offer.  $10K under Asking might be insulting on a $100K property, but a very welcome on a $500K property.  Also, the length of time a property has been on the market is a factor -- low Offers the first week on the market are going to be looked on differently than when a home has been sitting for 6 months.

Brenda, you have a great attitude,  I agree with Marilyn Holda-Fleck that the percentage under Asking Price is important.  Like others have mentioned, I have given buyers comps but they tend to discount what is not consistent with their thinking.  They want the property at the rock-bottom price.  I am asked how will we know whether the owner will accept a low offer unless we try? 

I suppose i depends on the price range of the market you're in. If houses are selling for $1-$200,000.00, yes, $10,000.00 + a $5000.00 subsidy might be seen as lowball, but if you're in a market where houses typically sell for $400,000.00 +, I'll welcome any offfer within $10,000.00 of list, and even the $5000.00 subsidy wouldn't bother too many people. $10,000. below list would not be considered "lowball" in a $400,000.00 + market. It's usually other factors about the offer that make " lowball" offers look worse than they really are.

Great post, Brenda.  We had our house on the market and pulled it off after low balls at $50k UNDER our asking.  The comps pulled by buying agent were not even in our zip code or nicer area in an otherwise edgy area north of NYC.  I was red hot pissed.  But, Forrest and I rolled up our sleeves, picked great paint and spend the past year FULLY renovating our home.  Now, it's back on and have some interest.  Wish our luck and LOVE your sponge Bob dress, lady, v. fun!

In a seller's market some sellers think they can name any price. If the list price is unreasonably high, then the "lowball" offer may actually be the true market value.