Ken's Naperville Real Estate Blog : LOWBALL OFFERS...

LOWBALL OFFERS...

Can an offer be so low that it is offensive?

I received an offer on one of my listings last night.  A real nice two bedroom condo near Naperville's train station and downtown.

The condo is beautiful.  It shows great.  We've only been on the market 19 days...

Anyway, we received the offer last night.  They bid $200k.  We are asking $325K...

I must say I was surprised.  In my three years as an agent, I haven't had an offer near this low.

Does this seem odd?

It seems strange to me...

We will sell this home.  But not for 62% of our asking price after only 19 days on the market. 

I guess this may be a starting point.  But even if we split the difference...

So, what do you think?

How low is too low?

Ken

A Realtor you can trust. 

 

Comment balloon 82 commentsKen Tracy • March 17 2009 09:51PM

Comments

Evening Ken,  Yes, an offer can be so low as to offend and kill any chance of honest negotiation.  The seller is so offended that they simply will not take the buyer seriously.  I've had some of these, we all have, and I tell the seller not to respond until the buyer offers something closer to market.  This " Non response " allows me to work on the other agent and educate them !

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) almost 9 years ago

OMG, they can be so offensively LOW. I, as a Realtor, really dislike writing them up... and try and educate my clients, as we all do. BUT we can only do and say so much.  

Posted by Kat DeLong, Realtor DRE#01235311, Lake Arrowhead Real Estate ( (Wheeler Steffen Sotheby's Int. Realty) almost 9 years ago

The process is much more time consuming but the principle is the same - if the buyers want to buy the house, then they will have to negotiate with the seller and both must agree on the price. Sometimes buyers do not understand the damage they do with the 'tough negotiating'.

Posted by Lynda Bennett (Realty World - Heritage Realty) almost 9 years ago

This offer is way to low! But I am sure it was the buyer insisting on this price, and hopefully, not the buyers agent!

Posted by Terrie Leighton, Reno Real Estate Agent ~ Selling Homes in Reno (Ferrari-Lund Real Estate ) almost 9 years ago

We get faxed letters of intent from unknown brokerages on a daily basis. The offer price is not even the value of the land in most cases. I wonder if anyone actually takes them seriously?

Unless your listing is $100,000 overpriced, then the offer is a waste of your time!

Posted by Ellie McIntire, Luxury service in Howard County & Catonsville (Ellicott City Clarksville Howard County Maryland Real Estate) almost 9 years ago

Hey, Ken -

Thought -provoking and oft-discussed post.

The simple truth is this - the asking price has nothing to do with what the sales price should be.  Always, always, always - the market should dictate the price!

It slays me when folks think they can take xx% of the asking price, and their agents don't advise them that all pricing is market based, and you can actually alienate the seller, and kill your chances of getting the house at any price, by offering low, without basis.

Haven't seen your condo listing, so don't know how it is priced.  But, knowing your integrity, you wouldn't have taken a listing that much over market price.

But, saying that, some folks always feel the need to TRY!

Keep your head - and your client's heads - about you.

Stop in or call anytime!

DEAN & DEAN'S TEAM CHICAGO

Posted by Dean Moss, Dean's Team Chicago IL Real Estate Team (Dean's Team - Keller Williams Realty Partners Chicago IL) almost 9 years ago

That is very low. I am sure your client was offended. Alot of buyers are just expecting amazing unrealistic deals right now. What exactly do they have to lose by asking. As long as your client has you to represent them I'm sure they will get a better offer soon.

Posted by Judy Schneider (eXp Realty) almost 9 years ago

Ken - OUCH! That's one way to get the seller on the defensive REAL quick! I would contact the buyer's agent to make sure it wasn't a typo and then ask what reasons they have for submitting such an offer. I mean, unless you've priced it WAAAAYYYYY too high (which I doubt), then they are smoking something.

Posted by Kim Daugherty, d + b real estate, McKinney, TX REALTOR Broker/Own (www.RealFamilyRealEstate.com) almost 9 years ago

Ken,

I can be as low as close to nothing as long as it is accepted. I stopped jumping because of low offers, because I was working with investors, and they would ask me to write an offer, whihc was obviously very low, like in your example. So, I would warn them that they were for a surprise, but more often than not, the low offers were accepted.

Can we blame the market? Maybe, but this is the reality.

Posted by Jon Zolsky, Daytona Beach, FL, Buy Daytona condos for heavenly good prices (Daytona Condo Realty, 386-405-4408) almost 9 years ago

I'd hang on to that offer! What looks to low today may look a lot better in a few weeks.

You don't have to accept a low offer, but you should remain polite. I'd counter, even at full price to train the sellers. A non-response slams the door on the buyer and his broker.

I don't understand Shirley, I haven't seen the house, ether. How can she come up with such an arbitrary number? Even Good people can miss the value.

This is the problem when the buyer's agent has the sellers agent present the offer! If you had a pro' presenting the offer to the seller and their agent, you might have had a deal. As is this was an exercise in faulty! Everyone's time was wasted.

Bill

Posted by William J. Archambault, Jr. (The Real Estate Investment Institute ) almost 9 years ago

Today's buyers have an unusually unrealistic view of the market but that one takes the cake.

Posted by Robin Scott, Broker, CRS, ABR, SRS, REALTOR® - Austin Texas (Robin Scott, REALTOR®) almost 9 years ago

Hi Ken... As you know, I specialize in Short Sales, so NOTHING shocks me much anymore... but this one comes the closest to shocking me as I have seen in a LONG time!  YIKES!

...and congrats on the gold star!

Posted by Steve Shatsky almost 9 years ago

An offer or a list price either one is only insulting if the matter is personal. 

I would hope that all involved know this is business, not a self-esteem issue.   We should counsel our clients on this as well. 

When I see people discuss that the offer can't be too far below the listed price (whatever that value may be) as it may insult, I wonder why we never hear discussions of "We can't list that high, it would insult the potential buyers" ... even if the list price is way above current market value.   You'd think it would work both ways, but it doesn't.

You don't have to accept a very low offer nor list at a very high price.  And I think it can be very unprofessional to suggest that those that make very low offers are unprofessional.   It is only an offer.  If the seller is not interested, just decline it.  But no reason to burn any bridges or speculate that anyone is unprofessional.  

And there are times that over-priced houses sell and low-ball offers buy.  So who are we to presume that such pricing is unprofessional or insulting.   It is just part of a free-market (well, mostly free) system.  

All the best! G

Posted by Glenn S. Phillips, CEO, Lake Homes Realty / LakeHomes.com (Lake Homes Realty) almost 9 years ago

I guess it all depends on whether or not the property was priced well in the first place and what is going on in the market place.  I had a buyer make a very low offer on some new construction and I thought it was a bit too low (like 40K too low).  It turned out that the builder didn't want to carry the property through the winter and said yes! 

Posted by Joan Whitebook, Consumer Focused Real Estate Services (BHG The Masiello Group) almost 9 years ago

We have seen this a few times, especially within the last year, both as buyers agents and as the listing agent. Now on the other hand, we recently presented an offer for our buyers - only 10K off the listing (original price) and the listing agent chewed us up! What? how dare we bring such a low offer. Seller didn't even counter! Sigh. ~Rita

Posted by Brian Burke, Broker & Advising Expert-Denver Luxury Real Estate (Kenna Real Estate) almost 9 years ago

It's funny - as the LISTING agent it's really offensive... As the SELLING agent, you do what your client asks - I don't like doing them, but I would rather have the client than not, so I will go with it if they really want to do it.  You can only say so much and different people make offers according to what exactly they are trying to do with the place (investing, etc)

Posted by Emily Lowe, Nashville TN Realtor (The Lipman Group | Sotheby's International Realty) almost 9 years ago

Hi Steve, Robin, Bill, Jon, Kim, Judy, Dean, Ellie, Terrie, Lynda, Kat, Shirley, and Bill.  Wow.

Thanks all so much for reading.

The deal is not dead.  I have presented the offer.  We have countered to a level that will please my sellers.  We are awaiting word.

It does seem weirdly low.  I have a fair idea where this home will go (I think) and I am much closer than my bidder.

Anway, we will see how it all works out.

I will keep you posted!

Thanks so much everyone,

Ken

 

Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) almost 9 years ago

Ken: I have seen a few rather lowball offers over the years... Some have been offensive to the seller. Of course we must present then all. You never now.. yesterdays offence could be tomorrows sale.

Ever had a seller wish they had the last offer back ?  I have.....  Oppps.. too late.

Posted by Roland Woodworth, Q Realty - Power In Real Estate (Q Realty) almost 9 years ago

But not for 62% of our asking price after only 19 days on the market. 

It's just business.  I don't think you, or the seller, should be offended.  I've heard of offers coming in at 50% in some markets.  Think positive.  You got an offer in 19 days, so you're obviously doing something right!  :)

Posted by Bruce Brockmeier, Coached By Crouch (Internet Marketing Consultant to REALTORS®) almost 9 years ago

Ah yes, those all important comps....didn't see that subject mentioned for several of the earlier posts, but based on the comments of others who seem to know you, I am "assuming" the property is priced competitively for the area, condition, etc.....

Hmmmmm, I wonder what happened to the old adage that the best offer you are likely to receive is the FIRST one!

Yes, you did of course have to present the offer, although you surely ran the risk of totally offending the seller.....hey, at least they were willing to counter.

It still sounds like there is an almost insurmountable difference between what the buyers want to pay & want the sellers want to sell it for.

Shall I also "assume" that the Buyers are financially capable of making it to close...???

Keep us posted! Inquiring minds want to know!

Good luck to you! :0)

Edith Schreiber - Dallas Texas

Posted by Edith Schreiber - REALTOR, ABR,e-PRO,CNS,RCC,CNHS almost 9 years ago

I always tell the seller it is a place to start and counter, sometimes you can get a deal together this way, and sometimes you can't, but it's worth a try.

Posted by Jean Terry (Keller Williams Realty Spartanburg, S.C.) almost 9 years ago

Hi Jean, Edith, Bruce, Roland, Emily, Enjoy, Kenna, Joan and Glenn.  Whew.  Thanks for reading.

I don't know how those writers that are popular keep up with all the comments!

Lots of wisdom in these comments. 

I wasn't offended (nor my seller surpisingly).  I was disappointed.

We will see where we can take it.

Thanks again,

Ken

Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) almost 9 years ago

DOn't take anything personally in this market or be offended. It isn't worth it, particularly since we aren't out of this market yet. I would present it to my seller with the best advice I can give, show him where the comps are again, and counter. Even if it is at full price. Keep the door open to the other agent. GOod luck.

Posted by Lise Howe, Assoc. Broker and Attorney Licensed in DC, MD, VA, (Keller Williams Capital Properties) almost 9 years ago

That seem strangely low to me!  Good luck with the counter!

Posted by Jeanna Martinez (RE/MAX Access) almost 9 years ago

In this market, the way buyers have been lead to believe that it is candyland, you have to bite your lower lip and not take it personally.

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) almost 9 years ago

Hi Ken!
The assumption by buyers is that all sellers are desperate. I have a buyer who is assuming this...in an area where this simply is not the case.  He rationalizes why his offer is fair, but in all honesty, it is not realistic.  I think we are in a transition period and no one knows what the norm is.

Posted by Paula Swayne, Realtor-Land Park, East Sac & Curtis Park -Dunniga (Dunnigan, Realtors, Sacramento (916) 425-9715) almost 9 years ago

I think this is a very low offer, but sometimes buyers think that is the best place to start to leave plenty of negotiating room if they're not listening to their agents.

Posted by Christine Donovan, Broker/Attorney 714-319-9751 DRE01267479 - Costa M (Donovan Blatt Realty) almost 9 years ago

Who is being offended, the Seller or you, the agent?  It doesn't matter.  No offer should be offensive, unbelievable maybe, but not offensive.  As soon as the property goes on the market, it should be understood by the Seller that the property ceases to be their home and becomes an asset to be marketed and sold.  All emotion should be removed from the transaction.  An offer may not be viable, but if it is a proper offer, it should never be seen as offensive.

Posted by Richard Overall, Your OVERALL Long-Term Real Estate Resource (United Country Premier Properties) almost 9 years ago

Was the buyer Agent embarrassed bringing the low offer?  Did they say whether this was the first offer they had presented for the buyer or whether they were running around throwing offers on everything?  I wonder if they are even qualified to buy in the price range of your listing.

An agent in my town listed a house last week and put in the remarks "No lowball offers".  First time I have seen that. 

Good luck.

Posted by Jenny Kotulak, Broker - Oakville Ontario Real Estate (RE/MAX Real Estate Centre Inc., Brokerage) almost 9 years ago

In this market many buyers do not feel anything is too low. It is the mentality of the times.

Posted by Bob & Carolin Benjamin, East Phoenix Arizona Homes (Benjamin Realty LLC) almost 9 years ago

It seems to be the norm over here in Plainfield, Ken.  No matter what you have the property on the market for, even if it's priced right, I'm seeing offers about 15-20% below asking price even though the closed comps are coming in at about 94-95% of their asking price.  I guess they all have to start somewhere, but geeze what a waste of time on the phone and chasing paper!

Posted by Julie Ferenzi, Julie Ferenzi (john greene Realtor) almost 9 years ago

Hi Ken!

Do we  as Buyers agents no longer talk to our clients ?Do we no longer provide our clients with comps?

Are we so deseparete to make a sale? What is wrong with us Buyers agents?

Let's go back to basics and communicate, educate and provide our buyers with a clear picture.

Works for me!!!!

 

Posted by lilo almost 9 years ago

I used to receive way-too-low, insulting offers that I wouldn't even counter-offer on. Why would I pay $$ out of my pocket so someone else could live in a nice home? That's really poor economy, bad business.

Posted by Fred Peak, Realtor PCB-FL Real Estate, Panama City Beach-REOnulls & Foreclosurers (Jim Free Realty, LLC) almost 9 years ago

Hi Ken, Did the buyer agent present their reasoning for the low ball offer?  When ever  I have a client who makes a low ball offer we usually present our case based on comparable data, cost to repair, etc.  At least the seller will understand where we are coming from and hopefully will not close the door on a counter offer.   

Posted by John Crosby (Real Property, Inc.) almost 9 years ago

After just 19 days on market, I wouldn't encourage my seller to respond to this offer. This buyer is probably just using a shotgun approach to see if they can get 1 out of 100 offers accepted.

Posted by John Novak, Henderson, Las Vegas and Summerlin Real Estate (Keller Williams Realty The Marketplace) almost 9 years ago

No reason to be insulted.  This is a business deal.  Shutting down communication at the get-go accomplishes nothing.

I always advise my sellers to counter offer.

I have had sellers be offended at an offer that was $7,000 below asking price.  The seller refused to counter, saying it was way too low.  The offer came within 48 hours after it hit the market.  Chances are, we could have negotiated the price up another two or three thousand dollars.  But can't do that if the seller won't negotiate.

Too bad - that was the only buyer we had who was interested enough.  The "insultingly low" offer was right within the range that I told the seller it could possibly sell within - we listed at the high end of the range, but this offer was well within the range. I'm not anxious to relist (it's expired now) because it's obvious to me that the seller is not serious about selling.

Getting mad or offended accomplishes NOTHING, regardless of whether it's 7,000 below price or 70,000 below price.  Just get communication going. I've had offers changed from the inital 150,000 to an accepted offer of $190,000 - on a home listed for $265,000!

Someone on here is saying that he "educates" the other agent?  Did he forget that the buyer's agent is required to present the offer the buyer wants to make?

And, btw....the price that it's listed at is the price it's NOT selling at!

 

Posted by Karen Rice, Northeast PA & Lake Wallenpaupack Home Sales (Davis R. Chant, REALTORS) almost 9 years ago

Ken, they can be offensively low, but it isn't personal to you nor the seller, it is someone trying to get something for nothing.  I would try convincing the seller to respond with a counter offer, just to see how serious the buyer may have been.  I can see why just 19 days into the listing period that you would take offense at that offer.

Posted by Tony & Darcy Cannon, The C Team (Keller Williams Legacy) almost 9 years ago

Ken,

When a buyer that I am working with submits an offer that is too low I begin to wonder what I have forgotten to do.

Didn't I explain the recent comps?

Was I speaking a foreign language?

Maybe one of the zeros are missing?  :)

 

Posted by Coldwell Banker Camelot Realty, Homes for Sale Mount Dora Realtor (Coldwell Banker Camelot Realty) almost 9 years ago

Lowballing is the only way to find the bottomline. If a buyer agent is not helping his clients low-ball, he is not working hard enough to get his buyers the best deal in the market. Of course, each property will dictate different starting offer amount.

Case in point, I showed a $290K SF house last Saturday to a buyer who had researched the house through Listingbook, and had even drove around the neighborhood and checked it out from outside.

We made an oppointment and checked it out. It was the second house I had shown him. The whole family liked it. He wanted to make an offer.

I gave him three scenarios:

- Since there are no competing offers, you can start with 85% of the asking price.

- You can lowball it at whatever amount but risk alienating the seller.

- You will have to up your offer if there are competing offers.

He chose the 85% strategy. However, two additional offers are in. He will have to increase his bid.

Before I forget, the seller agent was very rude when I asked him if he has had any offers as of Saturday. He refused to answer the question and told me that the question was irrelevant. Whatever...

I guess that since I had indicated in Showingtime that my client would make an offer, the listing agent did call back and apologize for his attitude.

The Realtor establishment is clearly anti-buyer. This whole industry is built on hiding information from buyers and spinning half-truths. Check this out:

NAR claims ( http://www.realtor.org/research/commentary_falling_fsbo ) that in 2008, smack in the middle of "depression", Realtors sold real estate at up to 26% higher prices compared to real estate sold on For Sale by Onwer (FSBO) basis. A median home of  1,515 square feet was sold at $116 per square foot in agent-assited sales compared to $92 per square foot with in FSBO sales thus pushing the price up by $36,360. Hey, great for the sellers. But what about the buyer who paid $36,360 more?

The buyer is told that she does not pay any commission, and that the seller pays the commission. Show me a seller who paid commission BEFORE the buyer brought the money to the table. Who is kidding whom?

Then there is an army of seller agents who "get insulted" while listing properties at 26% higher than the street price to start off with. Who is kidding whom?

From one side of the mouth brokers will parrot, "the price of the real estate is what a buyer is willing to pay", then from the other side of the mouth, the buyer is ridiculed for making too low an offer. Who is kidding whom?

Real estate is NOT about sellers. At the closing table seller is washing his hands off of the property. It is the buyer who has to live with the consequences of buying and/or financing the property wrong.

Those poor souls who are facing foreclosures today are the buyers who were jipped by the real estate and the banking establishments to provide cushy exit strategies to the sellers who made it out like bandits.

It is about time that the real estate and banking establishment became buyer-friendly.

Thanks for reading... :)

Lee Ali

BankFreeInvesting.com/blog

Lee Ali is the author of "Crowdfunding: The Solution to Eliminate Booms and Busts in Real Estate Forever!"

Posted by Lee Ali (Las Americas Real Estate) almost 9 years ago

Ken, we get low ball offers all the time and most of my sellers are glad to do so.

But....you knew there would be a but.

IMO you are the one based on your comps know if there is any justification for that offer. Perhaps a  condo sold in there in foreclosure? Many buyers use the LOWEST sale price to offer. We have no way on knowing that.

Regardless, keep calm and negotiate the heck out of it. Sometimes it takes a week. 'Now if they were just fishing they will walk away and not re counter.

I got within 2000 on a home in December, my seller wouldn't do more, the buyer went back out looking and wouldn't come up.

After out looking a week later they came back and took my sellers final offer. So you never know.

Keep us posted!

Posted by Missy Caulk, Savvy Realtor - Ann Arbor Real Estate (Missy Caulk TEAM) almost 9 years ago

First off I assume it's not a short sale or an REO or foreclosed property? In my area...the inventory is mostly just that and that hurts the ones who can truly sell without those issues. Most consumers think that just because you're selling ...it doesn't mean you're desperate. I would guess the comps are well within your value so get used to it because unless you get someone who is serious...most buyers are looking for a deal and that means they are prodding to see if your sellers are really desperate to take low offers.

Posted by Neal Bloom, Realtor CRS-Weston FL Real Estate (eXp Realty) almost 9 years ago

Ken...

Several issues here ... but to annswer your question ...what difference does it make if an offer is $200 or $200,000 less than your seller will accept? It's a starting point and you counteroffer.

Why would anyone get offended? That's ...well...stupid!

Posted by Richard Weisser, Richard Weisser Retired Real Estate Professional (Richard Weisser Realty) almost 9 years ago

Well, certainly don't be upset with the buyer's agent. Sometimes, especially in this market, buyers tell us what to offer, and no matter how much we try to guide them, they want it done their way. Usually, my buyers that act like that end up losing the first few homes they love due to lowball offers, then they sit up and start listening to me, the professional!

Posted by Lisa Schlitz, Realtor - Wellington, Florida Homes 561-214-3216 (Home Run Real Estate, Inc.) almost 9 years ago

I have someone that wants to make a simliar type of low ball offer today.  The price on the home is way too high and its bank owned but still it does not work to come in that low.

Posted by Chuck Carstensen, Minnesota Real Estate Expert (RE/MAX Results) almost 9 years ago

The only thing that surprises me about your experience is that it is your first of its type in 3 years.

Is it a low offer?  Sure... but so what?  It's still an offer and we, as licensed professionals are required to submit the offer. 

Might the seller be offended?  Possibly... but he shouldn't be.  It's just a number for him to accept, reject or counter.  Nothing more... nothing less. 

More than likely, the buyer's agent has already advised him appropriately and the agent decided it was worth his time to write up the offer.  Some investors (and other buyers) love to go around making super low offers hoping that some will fly... and some do which keeps them coming back for more.  Who can really blame them?  Purchase a home for 33% less than market value?  Sounds like capitalism to me!

Personally, I choose not to work with folks who want to make low offer after low offer simply because it isn't worth my time but not because there is anything morally or ethically wrong with it.  When listing a property I prepare the seller for the very real possibility of getting super low offers.  I advise them to be ready emotionally and, more importantly, fiscally... know what your game plan (counter offer) will be before ever receiving the offer.  Know your bottom line and act accordingly.

Posted by Tim Fennell, Jacksonville Real Estate (The Legends of Real Estate, REALTORS®) almost 9 years ago

Many people out there think they can get something for nothing. We had a similar case recently and we told the buyer's agent we would counter once.  We did at close to asking price.  They came back very low again and we told them we were done.  A week later they met us 97% of asking price. 

Posted by Jimmy J-REALTY WORLD-Harbert Company, Inc. almost 9 years ago

This is rediculous to say the least. They can't be serious!  Sure it's ok to go in with a low offer but no lower than 10% ....6%  or 8% maybe to get thehball rolling but this is C R A Z Y...Cut the bums loose!

Patricia Aulson/ Portsmouth NH Real Estate

Posted by Patricia Aulson, Realtor - Portsmouth NH Homes-Hampton NH Homes (BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate ) almost 9 years ago

This is rediculous to say the least. They can't be serious!  Sure it's ok to go in with a low offer but no lower than 10% ....6%  or 8% maybe to get thehball rolling but this is C R A Z Y...Cut the bums loose!

Patricia Aulson/ Portsmouth NH Real Estate

Posted by Patricia Aulson, Realtor - Portsmouth NH Homes-Hampton NH Homes (BERKSHIRE HATHAWAY HOME SERVICES Verani Realty NH Real Estate ) almost 9 years ago

Ken,

There NO low ball offers. Just offers. The seller always has the same 3 options:

  1. Reject it
  2. Accept it
  3. Counter it

I almost always counsel my sellers to take either 2 or 3. Number 1 will get you no where. Our job is to help our buyers and sellers buy and sell real estate. We do this mostly by assisting them with negotiations. It's my opinion that rejecting an offer is like slamming a door shut.

So......Can an offer be so low that it is offensive? Only if we let it.

 

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) almost 9 years ago

An offer is an offer, no matter where it starts there is usually always room for negotiation. I hope the negotiation goes well!

Posted by Darrell Walters (W. Darrell Walters) almost 9 years ago

That's not really an offer. It's somebody half-cocked signing a name on a piece of paper. They think if they throw enough crap at the wall, some of it might actually stick. You may even think in your head, "Hey, were you stoned when you wrote this? Does your doctor know you've escaped from the mental institution?" And it says even less about the agent who submitted it.

sacramento short sale agent

Posted by Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents, Put 40 years of experience to work for you (Lyon Real Estate) almost 9 years ago

AMEN.. I have an REO that is currently listed at $180+ the comps and the appraisal placed it at $213-$220. and guess what I yepp .. 2 offers at $140. I asked the agents .. why... they said they felt the bank should be happy to  except 60-70% of list price ..( oh did I say this was only 3 days on the market). The bank flat out rejected the offers no counter .. and the agents asked why no counter .. I responded the listing is their counter..

Now the buyers agents get to go tell their clients... sorry I lost your dream house for you .. would you like to go ride around in my car again today?

Posted by Eric Reid (Renaissance Realty Group of Keller Williams Atlanta Partners) almost 9 years ago

Ken, I think that in todays market, consumers are beginning to assume that every person who has their house on the market MUST SELL and ARE DESPERATE. Which is not the case. These consumers think they can make a ridiculously low offer, get the home, and turn it around and sell it in your case for $62% more, because the new owners are NOT DESPERATE TO SELL. Educate educate educate. Every Realtor needs toi educate their buyer on what is going on with todays market!

Posted by Terri Favata, Broker, Kent & Sussex County Delaware (Coldwell Banker Resort Realty) almost 9 years ago

"I lost your dream house for you?"

Good grief, that's just ridiculous..nice element of unnecessary drama though.

You go back and say "Sorry, the seller is holding firm at list price.  Do you want to go up on your offer?"

So Eric, how is the market responding to that appraisal and list price?  How long has it been on the market? How long is your seller willing to wait?  I would think if $180 was an awesome deal, it would be snapped up by a savvy buyer...

Elizabeth - you don't think a buyer's agent should submit the offer his client instructs him to submit?

Wow.

 

Posted by Karen Rice, Northeast PA & Lake Wallenpaupack Home Sales (Davis R. Chant, REALTORS) almost 9 years ago

Hi Elizabeth, Integrity, Bryant, Patricia, Jimmy, Tim+Susan, Chuck, Lisa, Richard, Neal, Missy, Lee, Ray+Karen, Tony+Darcy, Karen, John, John, Fred, Lilo, Julie, Bob + Caroline, Jenny, Richard, Christine, Paula, J, Jeanna, and Lisa.  Holy smokes!!!

Thanks so much for reading everyone.

Clearly, this topic hits home for many of us.

I am in the crowd of not being offended by anything.  We have countered and are waiting to hear back. 

Great discussion here...

Thanks again everyone!!!

Ken

Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) almost 9 years ago

Ken,

Can an Offer be tooooo low?  You betcha, and you just got one last night.  It would have been interesting to be a fly on the wall to hear how the conversation went while the Offer was being written. Was the Realtor dealing with one of those SUPER INTELLIGENT BUYERS, and I know you've had them, that know more about real estate than their Realtor? 

I tell Buyers that you want to make a "respectable Offer".  A respectable Offer is one that is low, but not so low that the Seller is offended and will not make a Counter Offer.  I've had Sellers that were so offended by an Offer, they took it very personal.

As a Realtor, all we can do is to educate the Buyer on the current market, explain what the numbers mean, and encourage a realistic Offer.  If the Buyer still wants to make a "low ball" Offer, then we are obligated to present that Offer to the Seller's agent, no matter how ridiculous it may be.

Posted by Jerry Hill (Hill Realty) almost 9 years ago

It's an easy one. If the buyer is not motivated to buy, why should he pay top price. He might have inmind to lowball 100 times to get only one yes. But then, what a deal for him!! We can't blame them...

Posted by Claude THOMAS (Rossman Realty Group) almost 9 years ago

Dear Ken,

I have seen so many extremely low offers this year. It seems that buyers want to start rock bottom, even if they see the value!

Makes me think I should have started higher on one of my listings.

Some offers are so low that the seller doesn't want to negotiate with that person. When I represent a buyer, I have to present whatever they want, even if it is crazy. A few of those crazy offers have actually been accepted!

Barbara

Posted by Barbara Delaney (Park Place REALTORS, Inc.) almost 9 years ago

When I get offers like this, I want to counter back do you want a pint of blood on the side? Buyers seem to want it all, but then I back up, realize that this is the start of a conversation and tell  the sellers to counter...something to get the ball rolling. Never got one to work when they are this far apart.  Buyers need to be educated that sellers make the final decision and no one gets paid till we come together on price and terms.

Posted by Gwen almost 9 years ago

Ken  - At least you have an offer. This gives your seller the opportunity to send over a counter offer.  

Posted by Robert Schwabe, Orange Park Real Estate (EXP Realty) almost 9 years ago

In this market no one should be insulted by any offer.  Yes that is way to low for the time on the market. But prepare your people ahead of time for anything and everything that could happen.

Posted by JR Sangiuliano (CENTURY 21 JRS Realty) almost 9 years ago

I believe ANY offer is a good offer.

Right now you are only $125K away from selling that home. Prior to the buyer's offer you were $325K away from selling the home. While you could interpret this as "offensive", you could also spin it another way. A buyer was interested enough to take his time (and his agent's time) to put pen to paper and write an offer.

As agents we need to be careful not to get our emotions in the mix. Calling it "lowball" or "insulting" or "offensive" just keeps our sellers from being able to achieve their goal. The ONLY way I would ever counsel a seller to reject a low offer is if the buyer would not be qualified to buy the house at a price that the seller could accept. If I were representing the seller, I'd recommend that he make a counter offer and see what happens. It takes a few minutes to do so, and you'll find out if the buyer was just looking for a steal or if they are genuinely interested in the home. If the seller rejects the offer without making a counter, you will never know if this could have worked (because you may "offend" the buyer by rejecting).

Posted by Diane Boschini almost 9 years ago

I would tell the sellers to not take it personal, you can't blame the buyer for trying but I would ALWAYS encourage a counter offer from the seller.  maybe the buyer just needs to see the sellers motivation.

Posted by Jeff Payne, Panama City Real Estate (The Payne Group at Keller Williams Success Realty) almost 9 years ago

Ken - don't know your market but if you priced it correctly then I would use your MLS list to sold price percentage to guage the offer - sounds way to low to me but what do I know I'm just a REALTOR!

Kathy Carson - RE/MAX 1st Olympic - Lynchburg, VA

Posted by Kathy Carson, Realtor, Lynchburg, VA, VA Homes - Lynchunberg,Bedford, Campbell (John Stewart Walker, Inc) almost 9 years ago

I sure would not blame the seller for being offended and not responding to the offer.  Unbelievable!

Posted by Irene Tron almost 9 years ago

Hi Irene, Kathy, Jeff, Diane, Andrew (Welcome to the founder of RealSpaceTours!), JR, Robert, Gwen, Barbara, Claude, Jerry, Eric, Terry and Karen!!!!  Thanks for stopping by...

:)

Really love the response!

Good conversation.  We have countered (I always do).  My seller took it better than expected...

Anyway, thanks again.

Ken

Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) almost 9 years ago

All offers should be taken for what they are - the ultimate buying signal.  Any offer, even a low ball offer, means that the buyer is interested and has jumped over that hurdle of  "just looking."  Good job on presenting it to your client and countering!  That is the only way to make sales in this market. 

 

http://andrea-realestaterollercoaster.blogspot.com/

Posted by Andrea almost 9 years ago

HI KEN!  Just been following the thread -- great stuff!  I am in the habit these days of telling Sellers as long as the offer isn't a request to "quit claim" the home - we can work with it.  Adds a little humor to something that can be insulting. Good luck! -- Gabrielle

Posted by Gabrielle Kamahele Rhind, Broker/Owner (KGC Properties LLC, Tucson Property Management & Real Estate) almost 9 years ago

Something over 200 grand below asking might even come off offensive to me. If it were the only offer at the time, and considering how long this listing had been on the market, it would simply be noted to the seller "The only way to keep the negotiating going is to respond"....respond doesn't necessarily mean yes. Most buyers in this current market know that they are going to have to list price their homes A BIT below it's actual value in the first place, so even if there is a little "negotiation ping pong" going, there is SOMETHING negotiable that the seller would more than likely accept if it's not the full asking price. Even though the potential buyer is opening up pretty low, as long as they are willing to continue going "across the net" with the seller, I would imagine there is something acceptable that could be reached.

Posted by Shantée Haynes, Your Congress Heights Resident Agent (Berkshire Hathaway HomeServices PenFed Realty) almost 9 years ago


The way I handle this situation with my sellers is tell them not to "Kill" the messenger.  I am only doing my job by presenting them the offer and tell them the different ways we can handle it.  It works for me anyway.  It takes the pressure off of me and it makes them feel more in control of the situation.

Posted by Sue Bridges almost 9 years ago

Looks like you got some heads spinning.  Especially yours!  Keep it together is the ultimate for you and your clients.  I don't think a low ball offer is a bad thing.  Only a message sending one thing out, negotiations.  Ok so you got hit below the belt, big deal.  Counter with a higher offer than your listing price if your clients were insulted, if you want to insult back.  But, keep in mind, your LCDORA and keep your personal feelings aside, and get the job done!  I have seen really low, and I have seen really ugly low.  But put yourself in both shoes, and sit back, and think????

I always tell my sellers, if one comes in, that means I am doing my job to make the property noticeable which makes them think I am doing my job and makes me feel good.  Time will only tell.  In the market we vs. you is impossible to judge, but the repo hunters are out, and will be for a while, and you can't neglect there patience of trying, but your patience of being a great agent is the key.  Relay the messages without your personal feelings as you know the CMA and you know what you would buy there property for, so I am sure your offer would be lower than the CMA you gave them which could also be insulting.  But, its there ultimate decision and your job to get it done.  So good luck on this one, and patience is vertue and you will prevale!

Posted by Dave Werth, FULL TIME REALTOR (WERTH REALTY ) almost 9 years ago

An offer is just an offer.  Respond to all of them and see where they lead.  Sometimes they lead to a sale and other times the trash bin but at least everyone is clear where the deal stands at the end.

Posted by Cindy Jones, Pentagon, Fort Belvoir & Quantico Real Estate News (Integrity Real Estate Group) almost 9 years ago

I have certainly seen some low ball offers, but I would have to say that I have not come across one like that just yet. Of course, I would counter the offer, but I believe that one may be asking a bit much.

Posted by JL Boney, III, Columbia, SC Real Estate (Coldwell Banker) almost 9 years ago

Hi, Ken,

Welcome to the wacky world of real estate where anything can happen and usually does!  I work mostly with buyers and I feel it is the agent's job to educate them about the market by showing them the appropriate comps.  Unfortunately, sometimes buyers have blinders and ear plugs when it comes to making an offer and, ultimately, we have no choice, but to present a rediculous offer if they insist.

While we cannot control what the buyers do, we can certainly control how we handle an insulting offer.  It might have been a little more palatable if the Buyer's agent had contacted you to explain why such a low offer was coming your way.  Etiquette in handling the transactions is essential for a good working relationship.

Don't worry, this too shall pass (LOL).

Posted by Dolores Jonusas almost 9 years ago

Hi Dolores, JL, Cindy, Dave, Sue, Shantee, Gabrielle, and Andrea.  Thanks for reading.

More great comments.  Some better than my post!!

Thanks everyone.

Ken

Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) almost 9 years ago

Ken, you should call the buyer's agent and say, "We acknowledge that we received your offer and our seller will not be responding to the offer, for obvious reasons." while you chuckle into the phone.  He'll get the hint.

Join my new AR group and post your blog at http://activerain.com/groups/virtualoffice

Regina P. Brown

Posted by Regina P. Brown, e-Pro Realtor (California Coast & Country Homes, Inc.) almost 9 years ago

Ken,

Is this your listing? http://www.zillow.com/homedetails/charts/69072541_zpid,5years_chartDuration/

If it is then please note that although unemployment seems to be low http://zipskinny.com/index.php?zip=60563 , zip code 60563 is seriously trending down.

The following condo seems to be in the same complex.

how does this listing compare to yours? http://www.zillow.com/homedetails/charts/69072545_zpid,5years_chartDuration/

It is 99 square feet smaller and was sold for $269,000 on 11/26/2008.

Your seller may be upset that their condo had hit $400,000 between 2004 and 2007, but my clients are having no difficulty buying properties at the prices where they were between 1998-2002.

I have been using the phrase, "Unfortunatley, this is 2009, NOT 2005" alot with sellers and seller agents lately. You might want to do the same. :)

Good luck with the property, though. I commend your fiduciary efforts on behalf of your client. That is exactly what an agent should be doing. However, based on the way the market is, if it sells for more than $250,000 then I will assume that housing is coming back up, and will donate $10 to your favorite charity.

Lee Ali

BankFreeInvesting.com/blog

Lee Ali is the author of "Crowdfunding: The Solution to Eliminate Booms and Busts in Real Estate Forever!"

PS: This post was NOT written to insult anyone AT ALL. :)

Posted by Lee Ali (Las Americas Real Estate) almost 9 years ago

Hi Regina and Lee.  Thanks for reading.

Boy Lee, you did a little work on this one.

Yes it is my listing.  My listing is a corner unit, and bigger.  More upgrades.

I am feeling pretty good.

Thanks again!

Ken

Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) almost 9 years ago

Ken, thank you for your kind comments.

My research team does this kind of research for our clients all day long with properties across the nation.

Like everyone else we would like to see prices come back up BUT we are not going to pay high if we can get them at lower prices.

Good luck with everything. I hope that a nice price sale does materialize for your seller.

Lee

Posted by Lee Ali (Las Americas Real Estate) almost 9 years ago

Since we have to present the offers, its OK.  Hopefully your sellers will choose to laugh instead of a different emotion. 

I would imagine that some day you will write a low offer because your client wants you too, and they might get it.

Peace,

David

Posted by David Timm, CRS, EcoBroker, GRI, ABR (Coldwell Banker Residential Brokerage) almost 9 years ago

I don't see how a low ball offer can be insulting. It's just a number, the seller could always counter. No one's forcing the seller to agree to the low ball offer. You guys are just concerned about your commission. You owe your customers your fiduciary duties and the buyers agent is doing just that.

That agent should be commended for being loyal and submitting the offer even though it's low and he/she probably knows it won't fly. It is a buyers market right now and without buyers, everyone will be hitting up the local soup lines. Stop treating buyers like worthless sheep throwing numbers around just to piss you guys off. If you don't like it, find another job.

I wonder if you would do the same thing if that was your buyer?

 

 

Posted by Thomas over 8 years ago

Hi Lee, David and Thomas.  Thanks for stopping in.

Thomas, I am confused about your hostility...

Seems like a fair discussion.  I don't think we look at buyers as sheep.

It was a surpisingly low offer for a newly listed home.

Ken

Posted by Ken Tracy, Helping clients buy and sell since 2005 (Keller Williams Realty Infinity) over 8 years ago

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