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Sellers Don't Scream a Low Ball Offer is Just an Offer

By Cindy Jones

Real Estate Agent with Integrity Real Estate Group

October 15, 2008 12:59 PM

Angry In today's market selling your house may leave you feeling vulnerable. Not only is your house a huge financial asset, but you have strangers peering in your closets, appraisers judging your home's value and inspectors noting its flaws. A low offer in the midst of all of this can seem like a personal affront. However, no matter how well you have prepared your house or how certain you are that it's priced correctly; receiving a low offer is a possibility. Prepare yourself ahead of time to not take it personally. Instead of getting angry, do one of two things: Reject the offer, or counter it and move on.

If you do decide to counter the offer, try to get as much information as you can about why the offer came in at the price it did. Take a good look at the condition of your property. How does it REALLY look? It is amazing how quickly a buyer will undervalue your home based on outdated carpet, tile, light fixtures, bathrooms and kitchens. Remember that cost and value are not synonymous. If you have over personalized your home you might love it but a buyer might be looking how much it will cost to undo all of the paint and wallpaper.

If your home has been on the market for some time and you have not re-evaluated your price then the offer may be closer than you think. Have your agent take a good look at the most recent comparable properties and see if there have been similar properties that have sold at a lower price. You may be surprised to learn that the home one street over may have sold recently at significantly less than you think. When this happens it has an immediate impact of the value of your home.

Look at all of the contingencies in the contract. Make sure that you are considering all of the factors in the offer. Don't focus just on price. Make sure that you examine all of the other portions of the contract as well. Sometimes price is not the only factor that makes a contract worth considering.

If you decide that you just can't live with what is on the table then by all means move on. Make sure you and your agent understand your reasons for refusing the offer so that there are no lingering issues when the next offer arrives.

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Tom Braatz Waukesha County Real Estate 262-377-1459

Coldwell Banker - Oconomowoc, WI

Waukesha County Realtor Real Estate agent. SOLD!

Cindy

I see it as a common norm where people are writing very low offers due to advice from others.

Sincerely

Tom Braatz

Oct 15, 2008 01:07 PM

Audrey June-Forshey

RE/MAX Realty Services - Darnestown, MD

GRI, Gaithersburg, MD

Cindy, You are right on. When I list homes, I always tell my sellers to never be offended, but evaluate the offer and counter back. It is business and buyers are reading everything they can that is advising them to make low offers. I know it is hard, but sellers have to try to put themselves in the buyers shoes too.

Oct 15, 2008 01:11 PM

Valerie Keener

Cane Ridge, TN

Real estate is my caffeine!

I work with a lot of buyers. Every one of them wants a "deal". I always give them my "let's be realistic" speech and most listen but some still want to "low ball".

But about half of the time, when the list price analysis is done and the CMA is reviewed, the property is overpriced. I'm not sure if it's a situation of an agent wanting a listing so badly that they'll put whatever price tag the seller wants or whether its inexperience. When a property seems to be mispriced, I call that listing agent and ask if they can assist me and let me know what comps they used when they priced the home. I've had more than a dozen agents give me comps that were either more than a year old or in one case, the property was listed at a high price based on another active listing.

Before you assume that offer is "low ball", make sure you know how to do an accurate price analysis for your listing. If you get an offer lower than market, I'd suggest calling the buyer's agent and asking the basis for the offer price.

Oct 15, 2008 01:25 PM

Dave Hamill

EXIT Realty Legacy - Prescott, AZ

Prescott, Arizona Real Estate

Excellent advice, Cindy! Now if we could just get all our Sellers to understand this principle. It was one of the first pieces of advise that my 1st broker gave me: "Never burn a bridge." Offers are just too few and far between to take them personaly and cut off your nose to spite your face. Counter Offer! You, like the prospective buyer, just never know what you might get the other side to accept!

Oct 15, 2008 01:38 PM

Rich Mielke

REMAX Results, Frederick MD - Frederick, MD

REALTOR, Frederick Maryland Real Estate

Your seller shouldn't be offended by the low offer, they should be offended by all the buyers who looked at their home and didn't make an offer at all.

Oct 15, 2008 01:41 PM

Michele Reneau

Certified Staging Professional (CSP) Elite Instructor - Summerville, SC

Realtor, GRI ~ Charleston, SC Relocation Experts Team

It's hard for a seller not to be offended, but it's our job as agents to remind them it's a business deal and try to help them treat it as such. In today's market, let's remind them that we should be excited we have an offer. It's something to work with and better than the alternative...No offer!

Oct 15, 2008 01:47 PM

Cindy Jones

Integrity Real Estate Group - Woodbridge, VA

Pentagon, Fort Belvoir & Quantico Real Estate News

Tom-and the lowball offers are being soundly rejected by sellers whether it is a REO, Short Sale or seller owned. Agents need to be able to show their clients the true listprice to sold price ratio to get them to understand the range that is acceptable.

Oct 16, 2008 12:06 AM

Audrey-our MLS has a great tool which an agent can use to show the list to sales price ratio for any neighborhood. Using it might help buyers understand why a low ball offer isn't going to get them very far.

Oct 16, 2008 12:07 AM

Valarie-you are right that there are plenty of overpriced listings. This is why I suggested that the sellers reevaluate their price when they get a low offer. Make sure your price is current with the market. I just had an appraisal done on a property with a client as we think a property that they want to make an offer on is grossly overpriced. We figured that was the objective way to get the right price.

Oct 16, 2008 12:09 AM

Dave-sometimes paying for an appraisal right up front will take the pressure off of you and provide an independent third party evaluation of your home. It also takes out any doubt in the buyers mind to what the value of the home is.

Oct 16, 2008 12:12 AM

Rich-that is a good perspective to give them. Thanks!

Oct 16, 2008 12:14 AM

Michele-I've seen plenty of sellers walk from an offer and then 6 months later accept an offer that was lower than the first one. I'm working with a buyer now on one of those properties. The sellers turned down an offer significantly higher than the current value of the property. We just had the property appraised as no one could agree on what the property was really worth.

Oct 16, 2008 12:15 AM

Sellers Don't Scream a Low Ball Offer is Just an Offer

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