Low-Ball Offer???

:scratch: I know of a couple of GRAYTE Realtors here on SoWal that would glady assist you......With Grayte attitudes

Thanks Biff, I'll PM you when I decide what to do.
If a 83.5% initial offer is considered a low-ball offer to the extent that it would offend Agents and not ellicit a counteroffer, then I'm fishing in the wrong waters.

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.

I've had agents act the same way. I just got a low ball offer on my house. It did not bother or offend me. We ended up under contract but at my price . You've gotta start somewhere

I've had agents act the same way. I just got a low ball offer on my house. It did not bother or offend me. We ended up under contract but at my price . You've gotta start somewhere

Congrats!!! That beautiful bathroom re-do paid off!

Congrats!!! That beautiful bathroom re-do paid off!

Thanks. Really, watching HGTV for as often as possible helped too

If you don't ask, you won't receive. If your agent didn't "want to waste their time," they could always run a verbal offer by the seller to see what they say. I welcome all offers, because it takes only a quick moment to get a reply on anything which is ridiculous. Sellers' situations tend to change fairly often in these times, so a "low-ball" offer today, may be accepted with gratitude tomorrow. I presented three low-ball offers yesterday, on properties which are priced to sell quickly. All of the offers were rejected, and the buyers now know that they need to keep looking, or come up with more cash.

Agents who don't want to was their time are lazy agents who are not serving sellers or buyers. Just say "no" to verbal offers. I believe there are verbal offers that when presented properly in writing, giving the seller time, can be turned into deals. And you never know when circumstances might change quickly.

Aren't you more likely to get a counter offer from a written offer than a verbal one? A counter offer may mean a deal that can be worked. Aren't you doing the seller, and buyer, a disservice by not securing written offers?

Get a new agent who will deign to bring ALL your offers to the table!

I made a lowball offer (still a very fair one IMO as I'd done my research) and the seller said it was so insulting that he wouldn't even dignify it w/ a response ........................fast forward a year and a half to when he accepted an offer that was within $15k of mine!

Offer Strategies

Curious if anyone has tips on what other tactics a buyer can use to "sweeten" a low ball offer?

How useful is a pre-approval letter from a reputable mortgage company (if the term "reputable" is still in use)?

Willingness to close fast?

Not asking for closing costs or other seller contributions?

Willingness to allow current owner to rent for some period (although I'm not sure this is as relevant in a heavy concentration of investor / 2nd homes)?

Anyone seeing anything really creative in today's market beyond price to get the deal done?

Let me also acknowledge that what I'm asking might be viewed by many of the good agents on this Board as part of your "secret sauce". But as someone noted above "if you don't ask, you don't get." (paraphrasing)

Curious if anyone (realtor or not) has any good tidbits. Thanks in advance.

Get a new agent who will deign to bring ALL your offers to the table!

I made a lowball offer (still a very fair one IMO as I'd done my research) and the seller said it was so insulting that he wouldn't even dignify it w/ a response ........................fast forward a year and a half to when he accepted an offer that was within $15k of mine!

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.

Curious if anyone has tips on what other tactics a buyer can use to "sweeten" a low ball offer?

How useful is a pre-approval letter from a reputable mortgage company (if the term "reputable" is still in use)?

Willingness to close fast?

Not asking for closing costs or other seller contributions?

Willingness to allow current owner to rent for some period (although I'm not sure this is as relevant in a heavy concentration of investor / 2nd homes)?

Anyone seeing anything really creative in today's market beyond price to get the deal done?

Let me also acknowledge that what I'm asking might be viewed by many of the good agents on this Board as part of your "secret sauce". But as someone noted above "if you don't ask, you don't get." (paraphrasing)

Curious if anyone (realtor or not) has any good tidbits. Thanks in advance.

Quick close, CASH, large earnest money deposit. A good agent will find out what is important to the seller in ANY deal. Did I mention CASH?

No mortgage was going to be necessary. I would pay for survey and inspection and close within 45 days.
Thanks to all so far. Keep up the good ideas.

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.

Yep, obviously I was somewhat flexible and planning to pay slightly more than that offer - but he was a total DB about it, so he lost!

No mortgage was going to be necessary. I would pay for survey and inspection and close within 45 days.
Thanks to all so far. Keep up the good ideas.

That would make for a good first offer, but this market is tough. I have made several low ball offers for my customers, cash, close in a week, standard closing cost and no luck. Looking at the big picture.....owners/sellers have accepted our market, lowered their asking prices and their mind set is priced to sell. But of course the buyer always wants to purchase at x % lower than asking and hence we have a train wreck. This is my experience and would love to hear from others.

Thanks Biff, I'll PM you when I decide what to do.
If a 83.5% initial offer is considered a low-ball offer to the extent that it would offend Agents and not ellicit a counteroffer, then I'm fishing in the wrong waters.

The selling prices I have seen on many properties lately has been lower than your offer price. You need a new realtor.

IMO owners and sellers always think their property is priced to sell! :rofl:

Why is it a train wreck? I have too much scotch & german blood in me to ever offer the listing price, but consider a little back and forth negotiating to be part of the process to get a price both buyer and seller are happy with.

Fran our experience has been different. I don't know the specifics of this particular property but in this market, my opinion is that there's not a thing wrong with a lowball offer. Of course every deal is different and every seller's motivation is different so buyer's need to be flexible. There's lots of good properties out there and it's better to have to repaint the living room to a color you like than paying $100K more.

There's a lot of strategy to getting the best price Clint and the offer is the beginning of the strategy. The negotiation process is EVERYTHING so if your agent isn't committed to going to bat for you, then they are probably right - the seller won't take it. It's the agents job to lay the options out to the seller's agent and believe me, the seller's agent wants the deal to work. This is reality:

$995 for $860 (86.4%) this was last month in Carillon - I believe this was our first offer and the seller took it pretty much as offered. All repairs were done by sellers.

$699 for $560 (80.1%) in 5/2008 in Highpointe - The listing agent worked hard with us to make it happen. All repairs were done by seller.

$2.495 for $1.9 (76.1%) in Rosemary also 5/2008 which is a strong community. We started much lower on this one. We did every inspection imaginable and had thousands of dollars of repairs done by the seller.

$224,900 for $211,200 in Feb 2008 ($209K selling price plus $2,200 to get renter out and get immediate occupancy) (93.9%). This is one of the hardest negotiations we've had because the seller was a broker, they started at $279K, did a bunch of remodeling and $225k was what they had in it. They were very resistant, we recommended that the buyer not go over $209K but they really wanted it. Seller was saying they had an appraisal at $229K. It only appraised at $215K . We started at about $165K (73.3%) on this one, I think.

$1.695 for $1.275 (75.2%) This is one where the buyer only wanted this particular unit when they came to us so they were sold before they came to us but what is the harm in trying to get the best deal possible. There were several negotiations back on forth on this one. Wanna say we started at $1.1. Notice the "not rounded" up prices. Even $2k could be the difference between a rejection and acceptance. I believe this seller declined $1.26 (LOL).

None of these were short sales or forclosures. We've had little luck with short sales and foreclosures. Our experience is that lenders are not nearly as flexible as sellers and the contracts that they want you to use leave too much exposure for the buyer as to future claims, repairs etc. We have 2 offers out on short sales and have been waiting forever. Have had numerous buyers walk on offers because the banks never responded.

Hold your ground Clint! Don't overpay. An 83.5% offer is extremely reasonable, especially for a first offer. Depending on what the seller's situation is, you may have even started lower. Just depends on the listing history, what they have in it, upcoming mortgage rate adjustments etc. There's a world of information in the public records to help you predict motivations of the seller.

If they get mad, so what? We've had the seller's realtor hang up on us after receiving our offer and say they weren't even going to present it. They must present it so that agent did and the seller took the deal as written I believe.

Also, you don't necessarily have to go "as is" . Even at lowball prices, sellers will often do repairs.

Different agents present in different ways but we almost ALWAYS go written on offers rather than verbal. It's tangible, it's real and it's enforceable if the seller accepts it. We will go verbal on fine tuning certain terms but I like written on price. Just the way we work.

This is a big decision with your hard earned money and there are still plenty of deals in this market. Of course I don't know anything about the property that you're placing an offer on but your timing is right. Season is about over, the number of sales traditionally drop after July and that seller may not see another ofter until next year and THAT'S what your agent should be telling the seller's agent.

You're in the driver's seat Clint. Buyers are rare and your agent should be thankful to have you because he/she may not get another buyer until next year either (no matter what they tell you)! Good Luck!

Verbal offers can give you a quick response, and should quickly be placed in writing after hearing anything back from the seller regarding counter offer or acceptance. Verbal contracts are more than difficult to prove in a Court of Law, and should be taken with a grain of salt. Also, the standard FAR listing contracts are written such that a seller may wish to receive only written offers, or written and verbal offers, so whether or not a seller will even get to hear a verbal offer depends on his or her listing agreement with the listing Broker.

Yes, written offers are best, and give more weight. Kurt mentions some good things to give better position to the buyer. Cash is king. About half of the reported single family home sales in South Walton for the month of July were reported as cash sales. In addition, the fewer contingencies you write, the less you are protected, but the more likely you will go to close, and the less time you will need to close.

A few things to help the informed buyers for a serious look at low offers:
Cash, with no financing contingency.
Non-refundable earnest money deposit of substantial amount (2-3% of purchase price)
Close within two weeks.
No feasibility study.
No contingency on insurance, inspections, etc.

Obviously, buyers writing no contingencies, should be aware of all of the risks which they take. There are many risks involved, but many people are willing to risk it for the lower price.

No feasibility study.
No contingency on insurance, inspections, etc.

Obviously, buyers writing no contingencies, should be aware of all of the risks which they take. There are many risks involved, but many people are willing to risk it for the lower price.

IMO these are big enough potential cans of worms that they shouldn't be sacrificed for a good deal!

BIG HUGE mistake to ignore those!

I would like to add that many properties are over-priced, so an offer at 83% might be realistic. HOWEVER, there are properties on the market which are priced to sell and will sell fairly quickly, much closer to list price. There are two strategies for listing. 1) price the property to sell quickly, which means not leaving much room for negotiation. or 2) over-price the property, hoping that you will get an offer, knowing that most buyers will try to low-ball you, working to a place in the middle. The problem with #2 is that you won't attract as many lookers and potential buyers. The problem with #1 is that most everyone still wants to haggle even if the price is right, because "haggling in real estate is what you are supposed to do." When you submit your offer, you will quickly find out that there won't be much haggling from the extremely over-priced properties, or the ones which are really priced to sell.

In summary, not all low-ball offers are the same. It all depends on the property itself and the list price.

IMO owners and sellers always think their property is priced to sell! :rofl:

Why is it a train wreck? I have too much scotch & german blood in me to ever offer the listing price, but consider a little back and forth negotiating to be part of the process to get a price both buyer and seller are happy with.

I would never recommend making an offer for the list price and negotiating the price is standard practice. The train wreck occurs when you have a buyer and seller $100,000 apart and no one will move up or down....it is rare, but does happen.

IMO these are big enough potential cans of worms that they shouldn't be sacrificed for a good deal!

BIG HUGE mistake to ignore those!

I completely, agree. An additional 10% discount wouldn't be worth the risk for me, unless I knew everything about the property and my financial ability to purchase. That would not be the case about most properties (I don't know everything about them.) I only post that because the question was asked.

I would like to add that many properties are over-priced, so an offer at 83% might be realistic. HOWEVER, there are properties on the market which are priced to sell and will sell fairly quickly, much closer to list price. There are two strategies for listing. 1) price the property to sell quickly, which means not leaving much room for negotiation. or 2) over-price the property, hoping that you will get an offer, knowing that most buyers will try to low-ball you, working to a place in the middle. The problem with #2 is that you won't attract as many lookers and potential buyers. The problem with #1 is that most everyone still wants to haggle even if the price is right, because "haggling in real estate is what you are supposed to do." When you submit your offer, you will quickly find out that there won't be much haggling from the extremely over-priced properties, or the ones which are really priced to sell.

In summary, not all low-ball offers are the same. It all depends on the property itself and the list price.

Exactly!! Thanks SJ

I would never recommend making an offer for the list price and negotiating the price is standard practice. The train wreck occurs when you have a buyer and seller $100,000 apart and no one will move up or down....it is rare, but does happen.

Not everyone thinks the same. There are cases when I would recommend paying full list price, and in some cases, even more. Personally, I have paid more than list price, and would have never been able to purchase the property otherwise, because other offers were at full list price. Depends on how much you want that particular property. If a property is priced at an exciting price to buyers, you can expect some big motivation, urgency, and competition from the buyers, and should expect to see multiple offers.

A few months back, a customer of mine made a reasonable offer, which was considered by the seller. The price of the property was unbelievable because they wanted a quick sale. The seller had three offers on the property, and a fellow SoWaller's customer purchased the property above list price. There was a mini-frenzy on the property. What is the difference on $20,000, when the list price is $100K below market?

Cash is king. About half of the reported single family home sales in South Walton for the month of July were reported as cash sales. In addition, the fewer contingencies you write, the less you are protected, but the more likely you will go to close, and the less time you will need to close.

A few things to help the informed buyers for a serious look at low offers:
Cash, with no financing contingency.
Non-refundable earnest money deposit of substantial amount (2-3% of purchase price)
Close within two weeks.
No feasibility study.
No contingency on insurance, inspections, etc.

Obviously, buyers writing no contingencies, should be aware of all of the risks which they take. There are many risks involved, but many people are willing to risk it for the lower price.

I have to agree with you on the Cash is king thing for sure. Both the Carillon and the Rosemary were cash offers but NOT quick closings. When buyers are placing a million cash down, they better do their diligence and inspections and the seller's agent needs to make their client realize that. 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. The rosemary home did have mold that was remediated before the closing.

IMO these are big enough potential cans of worms that they shouldn't be sacrificed for a good deal!

BIG HUGE mistake to ignore those!

I agree totally scooter.

I would never recommend making an offer for the list price and negotiating the price is standard practice. The train wreck occurs when you have a buyer and seller $100,000 apart and no one will move up or down....it is rare, but does happen.

Train wreck is getting the offer accepted and grossly overpaying or finding structural problems or termites because the buyer was too anxious. I agree that 100K is a bit of a difference but it all depends on the value. 100K is insurmountable for a $300K property but not necessarily a million dollar property.

I think we're all in agreement that every deal is different, every seller is different and every agent is different but what is for sure is that the buyer must feel that their agent is acting in their best interest.