Low-Ball Offer???

[DuneAHH]

That's a really good point Dune-Ahh. Unfortunately, what is "current" in a deflating market? I am one of those people who think we have hit the bottom or are very close to it but that $225 appraisal was 3 months old I think and the seller was convinced that their property was worth it. I believe we used the same appraiser because the buyer wanted the property so bad and the person brought it in at $215 3 months later. We all know that an appraisal is subjective.

Regarding list price being 80% under appraisal..... buyer's still want a deal and as SJ said, they are gonna come in lower so the question now becomes is another 2-3% enough to make the seller say "NO"? Only the seller can make that decision based on their particular situation and I know some seller's agents might not like it but we push the envelope every time because there are still lots of sellers that MUST take 75% of appraisal and unfortunately, this is gonna continue until every seller in trouble is forclosed upon.

SJ, I totally agree on sometimes offering more than asking. I remember in the heyday, there was a home listed at $799K, we recommended an offer of $815K. My buyer refused to go over asking. It sold at $815K and flipped for $1.299 in 3 months. My client wanted to kick themselves. It's rare in this market but can happen. The only good thing when that happens is there are many other good deals today if you lose one than there was 3 years ago.

Terms of Sale Report - this is for combined residential, 30A, for July 2008 only but definitely shows that cash (NONE) is king by almost 5%

Sales and Inventory History Report - "Average" sales vs listing price over summer has been 86%-87%

Gotta run, this was fun.

So psychologically:
It doesn't even matter if the list price is already A Deal...
if what everyone really wants is TO Deal
.
.
.
in order to feel like they got A Steal?

 

[Smiling JOe]

...After inspection, the buyer may still take the place without repairs but it could have structural issues, major mold issues etc so with all due respect, I wouldn't never recommend a purchase without an inspection.

Hold on a minute. I don't recommend that anyone write contracts without contingencies. I never said that, and think you will see that if you re-read what I wrote. I even went so far as to state that I don't think it is worth the risk, considering the little gain for the HUGE risk. The question posed was, what can make an low-ball offer look better to sellers. My answer is that if you don't want to risk no contingencies, make your offer higher.

 

[Smiling JOe]

If I was selling I would set a price based on what I want/need to get, then jack it up a little so that there is room to negotiate but still meet the price I need.

and that is why we have so many over-priced properties on the market. I'd rather have buyers competing over my listing, than to have it priced high enough that no one even looks at it.

 

[scooterbug44]

A little wiggle room in the price to allow for negotiating is NOT why there are so many over priced properties on the market!

The flipping and speculating frenzy that made people think they owned winning lotto tickets instead of houses or vacant lots is!

And I'm sure folks working on commission did nothing to increase prices either!

 

[30ashopper]

Yesterday, I tried to get my Agent ( not the listing Agent ) to present an offer of 83.5% of the listing price. My Agent told me that "the Seller would probably ignore it and not even counter. I would be negotiating with myself". The Agent stop short of refusing to present the offer but made it very clear that I would be wasting my time and the Agent's. The home is South of 30-A in an area where the Sales price versus List Price ratio is in the 88-90% range ( I think ). I've worked long and hard with this Agent to find this property and have a good working relationship, but frankly I'm flabbergasted at this attitude.

An alternative would be to use an attorney specializing on real estate and write your own offers. A lawyer won't have an interest in raising the price up, and will make all the low ball offers you want since they get paid by the hour. (Now I'm going to duck) :leaving:

 

[RiverOtter]

Which brings up another good point. Always get the seller to counter. I've heard of sellers countering lowballs with the asking price or very close to it and buyers coming back with a signature. Some people just want to try and get a bargain. No reason a seller or the agent should have a problem with that.

:scratch: ............................

 

[conched out]

I think your agent is being a bit lazy...some are really skilled at the negotiation stuff and some
aren't. We sold a lake house in Tenn this spring that was the result of a low ball offer from the
buyer. Initially we felt a little offended...thought about it and got back to them a week later and
the result was better for them but okay for us. The realtor did a really good job of smoothing over
the potential ego fall out! Emotions had to get put aside and on a practical note we realized it
might be our ONLY offer...we were very motivated to sell so we could buy in SoWal (and we did!
And thats a whole other real estate story).....

 

[Smiling JOe]

If I was selling I would set a price based on what I want/need to get, then jack it up a little so that there is room to negotiate but still meet the price I need.

A little wiggle room in the price to allow for negotiating is NOT why there are so many over priced properties on the market!

I agree that a "little wiggle room in price" won't stop people from looking. The statement in bold above, is what why I say that we have so many over-priced properties on the market. People price the property at what they want or need to get, plus some, rather than pricing it at a price the market will support. Many people who are selling today, "need" to break even, but if they bought in 2004 or 2005, the chances of that happening in today's market is slim to none.

 

[scooterbug44]

True, but implicit in my statement is that I am selling a house or property that I bought at a reasonable price and that I could AFFORD, not a cache of gold bars!

Several years ago a local made a great comment on the current flipping frenzy "I just want to have a chair when the music stops." Far too many folks didn't think to plan for when the music stopped!

 

[AAbsolute]

There's no such thing as a low ball offer. When you are a seller of something that is $100,000 or more you are jumping into a pretty big business.

That's why they call it an offer. If your feelings get hurt you may act in a way that stands in the way of your primary goal. There is always your right to counter, and so long as you don't narrow the negotiation down to just one thing no one has to lose. When you narrow negotiations down to price alone you have set up a climate where one party is going to lose and the other is going to win. That's probably not good Karma.

Many, many times offers that are substantially lower than list price turn into sales.