I've found some value in LOW BALL offers

By
Real Estate Agent with Five Star Real Estate

It seems that there are many buyers who believe that media real estate experts who are giving the impression that on a national basis, buyers can literally steal any home on the market.  These buyers are looking at homes and writing offers that are in some cases off the wall. 

I know I have Lost- the wall photoBut in the last 12-months, on TWO occasions, a low ball offer has helped a 2nd buyer move off the fence and write an appropriate offer.  For me, that's a beautiful thing.  It takes the frustration out of an uninformed buyer writing something that doesn't have any chance, on a listing that is in great condition and is priced pretty close to where it belongs.

There's a certain satisfaction (that I probably should not enjoy as much as I do) that not only do they not get the home that they sorta want (not bad enough to get real apparently, but bad enough to write a bad offer on), but someone else who is informed gets the house that they want at the same time, and of course the sellers have been very happy in both cases.

So is there a lesson there?  I'd hope so, but like in so many cases, the people who most need the professional assistance and advice, seem to be the least likely to listen to it.

My suggestions for buyers?

  • Work exclusively with an agent you've selected to represent you
  • Be pre-approved by a reputable lender and have a strong pre-approval letter
  • Throw out the 'national rules' you're hearing on TV- there is NO NATIONAL- all real estate is local
  • Learn to recognize a home that is grossly overpriced from a home owned by a seller who understands the current market and has prepared their home for the market and priced it accordingly
  • If you want to write an offer that's significantly below list price and ask for everything that isn't nailed down, and some things that are, go ahead!  You're likely helping a SERIOUS buyer get down off the fence
  • Ask questions, look at the differences between homes, understand how values work and learn to recognize the homes that are a great deal because they are in top condition and are priced appr opriately
  • Buy one of those homes.

It seems like all of the fence sitters may be getting tired of the points of the fence slats poking them in the butt.  Activity levels in Grand Rapids, MI are on the increase since January 1, despite some of the coldest, snowiest weather I remember in a long time.

I believe that the recognition that prices are GREAT, Interest rates are GREAT and there's a large inventory to choose from are combining to make a market where a buyer who is looking for a home to live in, raise a family in and establish some roots in should be hopping off the fence, pulling some splinters out of their butts and getting serious about moving forward.

 How's it in your world?

 

Fence photo from Flickr.com Ll'sWorld's :  Wall photo flickr.com by windscreen fly

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Rainer
160,526
Dwayne West
Atlanta Real Estate - Canton, GA
Canton Georgia Real Estate
That is a very true statement. I have seen panic induces once an interested buyer finds out there is anther offer on a property.
Feb 19, 2008 06:42 AM #1
Rainmaker
575,553
Terry & Bonnie Westbrook
Westbrook Realty Broker-Owner - Grand Rapids, MI
Westbrook Realty - Grand Rapids Forest Hills MI Re
I am in the process of an offer now because of another buyers interest. All activity is a good thing and some times the low offer gives the seller a justification to reduce price to attract more offers. Thanks for the info.
Feb 19, 2008 07:53 AM #2
Rainmaker
2,772,745
Laura Cerrano
Feng Shui Manhattan Long Island - Locust Valley, NY
Certified Feng Shui Expert, Speaker & Researcher
Eric, I am glad things are picking up in your area, despite the weather.  All the experts say if you plan to keep your home this is a perfect time to buy--I hope people are listening.
Feb 19, 2008 09:59 AM #3
Rainer
48,135
Eric Webster
Five Star Real Estate - Grand Rapids, MI
Grand Rapids, MI, Five Star Realty

Dwayne:  It's so easy for buyers to NOT make a decision.  But fear of loss...

Terry:  I agree, if a contract cannot be put together, it certainly opens the door for another serious discussion of price.

Carole:  The good thing about really cold, snowy weather, it's only serious buyers who are out and about. People don't play real estate when it's 5 degrees out.

Feb 19, 2008 10:15 AM #4
Rainmaker
387,816
Lola Audu
Lola Audu~Audu Real Estate~Grand Rapids, MI Real Estate - Grand Rapids, MI
Audu Real Estate~Grand Rapids, MI ~Welcome Home!

Eric, funny you should write about this.  We just had an offer accepted because of exactly what you described.  There were several competing offers...all Low Ball.  I've always said, when the market begins to shift, it's unlikely you'll hear it first on the evening news.

Feb 20, 2008 10:04 AM #5
Rainer
159,599
Stefan Scholl
Buyer's Broker of Northern Michigan, LLC - Petoskey, MI
Northern Michigan Real Estate
Excellent post and advice, Eric.  It does seem as though some of the fence sitters are starting to test the waters here in the Northern Michigan real estate market.
Feb 20, 2008 12:34 PM #6
Rainer
48,135
Eric Webster
Five Star Real Estate - Grand Rapids, MI
Grand Rapids, MI, Five Star Realty

Hey Lola, glad to hear it! I contend that as the market starts to shift, the media will move on to whatever the NEXT end of the world predictions they got from their Magic 8 Ball.  :)

Stefan: Thanks.  Even in a cold, cold snowy Michigan winter things seem to be heating up.. woo hoo.  I don't know about you but we're about 1.5" away from the snowiest February EVER.  I've had enough snow for this year and next.  Thanks for stopping by.

Feb 20, 2008 12:51 PM #7
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Rainer
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Eric Webster

Grand Rapids, MI, Five Star Realty
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