Believe Me! I Know A Lowball Offer When I Submit It….

By
Industry Observer CalBRE #01165532
https://activerain.com/droplet/4ndH

Believe Me!  I Know A Lowball Offer When I Submit It….

 


I’ve been around this real estate thing for a while.

 

So, I’m well aware of lowball offers and I know when my buyer clients choose a price that I may consider too low…

 

But it’s their call

 

When an offer is submitted, a seller has options:

 

  • Accept it as is -- Yeah!   We like this option.  A lot.

 

  • Counter the offer - a change in terms or price or exclude this(or that).   Not perfect - but, hey -- we’re still in the game.

 

  • Reject the offer - No Acceptance.  No Counter.  Nada.  Zilch.  Zero.  Butkis.  This happens.   When given a choice -- we prefer this option is not on the table.

 

This brings me to a recent situation.

 

Here’s the scenario -- a new listing hits the market and I show my buyer clients --- it’s good, not perfect -- longtime owner and updates are minimal. I'm being kind here.  Nothing too bad but nothing that shouts WOW.   It also seems to me and my very savvy buyer clients that this particular property is priced above market value.   

 

Cut to Scene Two -- 60 Days later.

 

My clients are still looking in a hot market and after “losing” a couple of properties in the still frenzied multiple offer world we are experiencing --- decide to review “that” home.   I contact the listing agent(just happens to be a relative of the seller) to get a feel for what’s happening.

 

No offers have been submitted.   Seller disclosures are still not available. Answers to questions are vague to say the least. Not a lot of help but some agents are more willing to share than others.  That’s okay, we deal with these things.  Even in a hot market...some properties and some sellers are just not ready to sell...not quite….

 

My clients decide to write an offer.  I meet with them.  We talk about strategy and we talk about pricing. We review comps -- one of the comps is a recent sale of one of my listings.   My buyer clients arrive at a price they feel comfortable -- it’s obviously not full price.  Remember - 60 days on the market - no offers - many neighborhood sales selling within days above list price...multiple offers.  Lots of activity.  Got it?  

 

They sign the paperwork, provide proof of funds, there is a strong pre-approval letter from a reputable lender….

 

The offer is submitted.   A confirming voicemail is left.  This agent never seems to pick up when a call is made...anyway….

 

Later that day.  A call from the listing agent.

 

Why is your offer so low?   

 

I’m waiting for a pause...as in here’s the punchline -- thank you so much for the offer.   I hope we can work out something….

 

No, I mean really...I know about lowball offers and this is not one of them.

 

I explain the comps -- the agent isn’t a rookie at least not in terms of years of experience.  It’s not seeming to resonate...Hmm...

 

I try to get a read on motivation or some logical explanation…. there doesn’t seem to be any...and, really, I’m searching….

 

A counter comes back --- some terms were countered that were already addressed in the original offer(another of my many pet peeves) and then the price --- a whopping .004% off the list price.

 

I mean really.

 

So what do you do?

 

Stay tuned….

 


Believe Me!  I Know A Lowball Offer When I Submit It….

Posted by

Michael Jacobs

 

CalBRE # 01165532

2065 Huntington Drive

P. O. Box 587

Pasadena, CA 91102

Call/Text:  818.516.4393

mtj916@gmail.com

 

 

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Re-Blogged 2 times:

Re-Blogged By Re-Blogged At
  1. Scott Scheel 09/15/2014 05:40 AM
  2. Winston Heverly 05/14/2015 12:54 PM
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Rainmaker
422,371
Catherine Ulrey
Keller Williams Capital City - Salem, OR
Equestrian and Acreage Property Specialist

My pet peeve too, why do they repeat terms already addressed in your offer?  Duh!  If you accepted them, leave them alone, let's deal with what you do want to change.  Drives me crazy.

Sep 22, 2014 03:20 AM #155
Rainmaker
1,094,227
Margaret Goss
Baird & Warner Real Estate - Winnetka, IL
Chicago's North Shore & Winnetka Real Estate

I'm going to submit a lowball offer today - I emailed the listing agent with the comps to support our price.  She emailed me back and agreed with me!  

So, yes, sometimes that lowball is not really all that low.

Sep 22, 2014 03:23 AM #156
Rainer
206,108
Rod Pierson
Results Real Estate Inc - Redding, CA
Northern California
There is an acceptable market offer and a low ball offer. Just the other day, we submitted an offer after doing comps in the area that was a reasonable offer and they countered back ten thousand under listing price. When I do comps and find the listing price is over market comps and my client wants to submit a low ball offer especially with short sales I feel I am wasting everyone's time. Most low ball offers are countered, when market was hot I would get back rejections, now they want to negotiate since not a lot of buyers standing in line. Your agent who responded the way you said was insulted on his listing price IMO .
Sep 22, 2014 03:41 AM #157
Rainmaker
1,560,731
Carla Muss-Jacobs, RETIRED
RETIRED / State License is Inactive - Portland, OR

This is a great article about sellers thinking they know about the market since it's a "sellers' market" and all that . . . it's now a stale listing.

Sep 22, 2014 03:54 AM #158
Rainmaker
813,819
Kevin Mackessy
Blue Olive Properties, LLC - Highlands Ranch, CO
Dedicated. Qualified. Local.

.004% off asking price? That's nothing!  The seller must be attached to the home and really insistent on getting a certain price for it.  If there's a comp in the neighborhood, that's what it's going to go for.  Can't get around that.  

Sep 22, 2014 04:02 AM #159
Rainmaker
1,523,705
Sybil Campbell
Long and Foster REALTORS® 5234 Monticello Ave Williamsburg, Virginia - Williamsburg, VA
REALTOR® ABR, SFR, SRES Williamsburg, Virginia

This sounds very similar to a transaction that I negotiated earlier this summer.  You just do the best you can, but if the listing is overpriced it's not going to sell very quickly.

Sep 22, 2014 04:13 AM #160
Rainer
349,346
Raymond Denton
Homesmart / Evergreen Realty - Dana Point, CA
Capo Beach Realtor® - www.CapistranoBeachHomes.com

Stay tuned for the expired   listing.

Sep 22, 2014 04:39 AM #161
Rainer
247,900
Gerard Gilbers
Higher Authority Markeing - Asheboro, NC
Your Marketing Master

Well hello listing agent, I'm glad to see there is a live person attached to this phone! It seems that you may have an incoming call problem, luckily that is not a problem with my phone!!  It's called an offer and that's what my clients wanted to submit. The seller dictates the listing price but not necessarily the selling price since there are many other factors that can change that price. Don't take things personally, it's not your house!

Sep 22, 2014 01:21 PM #162
Ambassador
4,301,228
Praful Thakkar
LAER Realty Partners - Andover, MA
Andover, MA: Andover Luxury Homes For Sale

Michael Jacobs Isn't it funny? In the name of due diligence, we want sellers to get most amount of money - despite we know that current market value is low! And when the low offer comes in, we try to protect the seller's best interest!

Sep 22, 2014 01:50 PM #163
Ambassador
3,959,792
Kathy Streib
Room Service Home Staging - Delray Beach, FL
Home Stager - Palm Beach County,FL -561-914-6224

Michael- it's so hard when one party either isn't that motivated or realistic.  I'm ready for the sequel.

Sep 23, 2014 02:55 AM #164
Rainmaker
1,675,981
Winston Heverly
Winston Realty, Inc. - Atlantis, FL
GRI, ABR, SFR, CDPE, CIAS, PA

It is a bit of a treat going back and reading some of Active Rains best archives  like this one. Should be shared again.

Mar 29, 2015 01:08 PM #165
Rainmaker
622,840
Morgan Evans
Douglas Elliman Real Estate - Manhattan, NY
LICENSED REAL ESTATE SALESPERSON

Would try to get on the phone with the listing agent, try to have a decent conversation, finding out if the seller really wants to sell and most specifically if the listing agent is going to try to make a meeting of the minds or if they are apathetic as well.  If the listing agent doesn't seem to care than I'd think I'm wasting my time and move on.

Apr 06, 2015 01:08 AM #166
Rainmaker
5,117,342
Barbara Todaro
RE/MAX Executive Realty - Franklin, MA
Marketing Agent for The Todaro Team

Good morning, Michael Jacobs sorry I'm late for this party....that's a scenario that scream what the listing agent has done....he's convinced the seller that his property is worth the price in your current market....and now he's stuck with that statement.... in a seller's market, if a property has been on for a couple of months, it's grossly overpriced.... my guess is that you offered a fair price or at least a fair starting point....

Apr 18, 2015 01:16 AM #167
Rainmaker
3,423,789
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Hi Barbara Todaro - the property "sat" on the market for quite a while and when it did close it was just slightly higher than my clients' initial offer who had already found their new home.   

Apr 18, 2015 01:20 AM #168
Rainmaker
3,248,735
Lou Ludwig
Ludwig & Associates - Boca Raton, FL
Designations Earned CRB, CRS, CIPS, GRI, SRES, TRC

Michael

Your going to have to ride this one out . . . . Stick with it.

Good luck and success.

Lou Ludwig

Apr 19, 2015 12:48 PM #169
Rainmaker
3,423,789
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Good morning, Lou Ludwig  --- that property has sold since I wrote the post seven months ago.   My clients have been in their new home for almost six months -- not that one but another.  

I appreciate your comment and good wishes.  

Apr 20, 2015 12:13 AM #170
Rainmaker
5,499,825
Roy Kelley
Realty Group Referrals - Gaithersburg, MD

This is a good story to share in the current market. You may wish to use this material for a new blog.

Apr 29, 2015 11:36 PM #171
Rainmaker
3,423,789
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Thanks, Roy Kelley - I do review past posts and sometimes comments for inspiration.   Good idea.

Apr 30, 2015 12:27 AM #172
Rainmaker
474,229
Bruce Hicks
Best Homes Hawaii - Honolulu, HI
Your Lifetime Friend/Helper!

Michael Jacobs I can relate!  Not your same situation but:  One over priced seller says "we don't want to give it away!" The buyer says "you don't undersand, I am looking for a BARGAIN! 

May 14, 2015 01:34 PM #173
Rainmaker
3,423,789
Michael Jacobs
Pasadena, CA
Los Angeles Pasadena 818.516.4393

Bruce Hicks -- I've heard both statements - I think anyone in real estate for almost any length of time is likely to have heard them as well.  

May 16, 2015 05:15 AM #174
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