Hummm... well totally excited about a buyer recenty in town who I am helping secure a couple properties in Florida. One offer was reasonable on one and the other... a real lowball.
I have yet to hear back on the lowball offer from the listing agent, who happens to even work in my office, which means to me she and the seller are most likely insulted.
By law, she has to submit the offer... so I am tapping fingers here...waiting ...waiting..
What has been your experience with "LOWBALL OFFERS"?
Many years ago, when the market was "balanced" with a slight favor toward sellers, a realtor friend of mine was representing a buyer from another country. Where he was from, it is standard to heavily dicker every purchase with the final agreed-to price ending up somewhere at 1/2 the original price. At that time, most properties in the area he was looking to buy, were selling within 2% or so of list. The area was also fairly desireable with not much in the way of inventory.
While my friend tried to explain to this buyer that his plan to offer of 1/4 to 1/2 the value on a non-distressed house in his target area was a waste of time for everyone involved, he just would.not.listen. I guess he couldn't believe that the culture in which he grew up wasn't the same everywhere, so he was going to show my friend "how it was done".
So....on his behalf, my friend cringingly submitted 4, 5, 6, 7 lowball offers. The bids were so laughable that the sellers wouldn't even counter-offer, or would simply counter back at the full list price. At this point, the buyer would walk away with the belief that the sellers would pursue HIM. Not happening.
With the months going by, her client became frustrated and bewildered at "losing" every house. So, he changed his strategy to and started bidding 25% off the listing price. On his behalf, she submitted low-ball offers 8, 9, 10, 11, 12....Still not good enough in that area, in that type of market. This went on for a while with no more success than his previous bidding strategy although the sellers would at least counter-offer.
More months went by with the buyer still not settled in a house. Finally, as time drew near for his wife and children to join him in this country, he decided to take my friend's advice on how to successfully bid for a house.
He first tried to go back to bid on the houses he'd submitted lowballs on previously, but those were long sold.
At the very last, he offered 7% off list for a house and was able to settle on 3% off of list price. The house was an estate sale and needed updating, but had been priced pretty well to start. He managed to close and move in just in the nick of time for his family to join him.
SUCCESS...but what a tremendous amount of everyone's time he wasted, including his own.
To be honest, not being a realtor, seller or buyer in today's market, I really don't care if an offer is "insulting" or not; but if I was any one of the three and seriously wanted the deal to work, I would care if it was in the ballpark...
So guess it depends, REL. Were the sellers asking full price using "yesterdays" market or were your buyers delusional as to how far the market has sunk?
Post back with more info... This message has been edited. Last edited by: Idaho Resident,
Seller is at comp.
I have not had any direct experience with a lowball offer, and I am not a practicing real estate professional, but I did learn something about sales when I worked in advertising.
IMO, a lowball offer is better than no offer. It opens the way for negotiation. A seller who rejects a lowball offer at face value and claims to be insulted is either not serious or is not in a hurry about selling. This is where having a smart agent makes all the difference in the world.This message has been edited. Last edited by: aychihuahua,
I can see a seller refusing to dicker with someone who starts off with an unreasonable lowball offer. Why waste your time? If lowballer is really interested,ignore him and he will change his tactics.
When we were selling our last home, list price started at 459,900. We dropped it to $449,000. At that time we got some offers, some good, some bad, but the worst was a young couple who offered $330,000, as if that weren't bad enough, they wanted:
my washer and dryer
the lawnmower and snowblower
all of pool equipment
all the furniture in my cabana
both flat screen tvs
my pool table and all equipment
and my gym equipment
I was tempted to ask if they wanted my first born child too.
my response was $448,999 and they went away.
My in-laws had to sell their dream home when my FIL, a physician, fell ill with salmonella and had to give up his private practice. I don't know that they were lowballed, but the house was bought by a "friend" who refused to allow my MIL to remove a mirror from the bedroom wall. The mirror had been a gift from her ten children. It must have really hurt because my MIL was still talking about it years later. If it had been me, the mirror would have met with some sort of accident while I was removing the BR furniture!
Wanda, your experience would have been a perfect time to quote Foghorn Leghorn: "Go away, kid, ya bother me!"This message has been edited. Last edited by: sms29s66,
aychihuahua is correct - It is business not personal I hope the listing agent has told his clients that and reminds them when he presents the offer.
Wanda - I normally would disagree with your tactic - but with that ridiculous offer - I might have suggested $449,001.
Sms29s66 - Sorry about your in-laws going through all of that - but a good reminder to everyone - if you want something in the house - remove it before putting it on the market, especially something that would be considered a fixture like a bathroom mirror.
Personal experience - I've had several buyers put in lowball offers - even after giving them all the info and comps but older buyers know everything and you just have to go along.
My most surprising experience with a lowball was a lovely older couple and they put in a really low offer on a condo that was already priced low for the area. I warned them that the seller was going to come back with something significantly higher. Well, low and behold - I don't know who was more shocked - the listing agent or me when the sellers accepted their offer - no questions!!!
The very sad part is, although we knew the seller had been ill, we did not realize he was in the end stages of an illness and wanted it all resolved before he passed.
Yeh, Charming, they went thru a lot. I married their oldest child when I was 18 and quite naive. For the longest I had no idea what was implied when I was told I "married well." It took me a long time to realize they thought I'd married money because nothing could have been further from the truth!
I wonder why the ill seller let his house go for the lowball offer. Was he aware that the offer came from an older couple? Sounds like he didn't have heirs to his estate. What a wonderful thing he did for the buyers!
I'm glad they realized you had no ulterior motive.
The condo was a 2nd home for both. The seller didn't want to leave the extra property for his family to dispose of.
Well then, REL, I hope you don't waste much more of your time, gas and energy with those particular buyers until you have a talk with them about the market and reach an understanding about "how low is too low" when it comes to negotiations!
BTW, has the sellers' agent (from your own office) responded yet? Might open their eyes....
Low ball offers are quite common these days, The only thing that people need to remember that this is business, and they should respond with the amount that they feel is fair, and of course, know their bottom line.
I learned about removing things many many years ago when we sold our house that had a beautiful crystal chandelier and had to leave it. After that, I remove anything and everything that It won't stay with the house. It doesn't matter how many notes you can leave around, buyers will never understand.
The last house I had to sell was in 2004 when the market was still strong. It was an on an acre of land, fully fenced, 3 bedroom brick with a 11 car garage and a great deck. It was about 20 minutes from downtown Fort Worth and pretty much out in the country. Can you tell I loved that place?
Anyway, we had it priced reasonably for the area and got an offer $30,000 below our asking price. We sent the counter back at $5000 over our asking price. Scared that buyer away, too.
It ended up selling at full asking price to a cute young couple. Since we were moving out of state we left them all sorts of things.....the lawnmower,a TV and even the big trash cans. We knew they probably didn't have a lot of extra money and might need some of those things you forget all about when you buy your first house.
I have been told by lowballers that... how will I know how low the seller will go without making a lowball offer.
Then perhaps they should start by asking the HO to give the house to them for nothing.
....agents are smart to say... if you really want this house I encourage you to come in with your highest and best offer........~~in a competitive market~~ if the comps are in line. Often times, lowballers lose out, especially in multiple offer situations.
Condition, of course, is a factor.
However, I have presented offers that were lowballs that were accepted or negotiated to be accepted.
While the immediate instinct of the seller may be "insulted", a swallow of pride and a counter offer may pave the way for a negotiated sale.
REL, Did you ever hear back from the other agent in your office re your clients' low-ball offer? If so, what happened?
How are the negotiations going? Think I know the answer since your clienta made such a low-ball offer - but stranger things have happened! So, what's happening? Does it work to come in so low and wait them out or does the reverse happen?
Believe it or not... still negotiating on BOTH!!
Actually, this has happened twice to my Dad. First the tenants, asked for him to give them the lot a mobilehome sat on. They had already got the mobile home for free (bank wrote off). Next he was asked for the house for $0, because they were unemployed and only received a little money from the gov. He may be old, but he is not stupid. In both cases, he told them he could not afford charity since the gov. had frozen his SS. As far as he is concern, you can ask, but don't expect to get it for free from an individual. Of course, the gov. is a different case.
This week, my Dad offered $1500 for a house, and the offer was accepted. Individual just wanted to get rid of a house that they had purchased the tax lien. The 12% interest is all they wanted, but the house was not redeemed.
It's is surprisingly good shape, without a whole lot of trash. Our roofer is going to fix a small area (limb fell on house). He was happy to have some work. Same with the electrician. You know what I am doing this holiday: cleaning & fixing. It will be on the market the first of the year.
All SSA recipients just received a 3.6 percent cost of living increase, effective next year; the first since 2009.
This happened before the gov. decide on the cost of living increase. As I tell him, fixed income is better than no income.
Very wise words.
I'm just looking at homes to move back to my original hometown, and am finding that rentals or sales, houses seem to be priced very high right now, as opposed to say a year ago. So my offers have been low balls because people seem to be delusional right now. Did something happen that I missed living in the middle of nowhere? You don't get $1500 monthly rent for a trailer pretending to be a house with wall to wall 70's carpeting complete with cat smell and mold surrounding the basement wall.
Ames: Are you still in the rental house with the flooded furnace? Any news there in getting the landlord to act reasonably?
We never counter if someone submits a unrealistic lowball offer. Someone did that the other day on the house we have for sale. The Realtor called laughing and told us the offer but knew we wouldn't counter.
Hey Jewel, yes we are still in the rental with the flooded furnace. It works, but I can't wait to get out of this area. When I finally came to that realization and stopped trying to kid myself, a big relief. now I just have to wait a little longer till my credit score comes up and I can buy and GO HOME!! What has actually led us to this is the school up here is so bad, my son has gotten so far behind we don't have a choice. I did not know that schools in PA do not have all the same standards, they have to abide by the lowest standards only, but other than that nothing.....the fact that this school has no AP classes, no gifted program and kids have no ability to take college classes early makes it impossible for them to be competitive at all. It's very sad
Hi guys! It's been forever since I've been on the boards. I'm gonna be putting my house on the market hopefully at the end of the month.
When I got low balled aka insulted this is what I did. When i had to respond to their offer, I didn't lower it one penny, or counter offer on anything.
I don't mind anytone trying to negotiate, but I do have a problem with someone being ridiculous HTH
I don't know what the offer was but when you use insulting to describe it you are not treating it as a business proposition. If you had come back with a reasonable counter you might have the property sold now and not having to relist and hoping the market has improved.
True, Charming. Lowballs can "go places". When I have a buyer make a lowball offer and the Realtor calls back and says "seller insulted-seller not countering yadda..yadda..I tell the Realtor.."it was a start..now you will never know". A reasonable counter may have workedwonders.
TIME TO REVIEW COMPS AGAIN WITH THAT BUYER.....AND A PEP TALK "TIME TO GET REAL".
BuyerS lowball to see HOW LOW A SELLER WILL GO!This message has been edited. Last edited by: real estate lady,
My feeling is that, in a sellers market, sellers can afford to be "insulted" by a "lowball offer" BUT, in a buyers market, they are smart to swallow their pride and counter back with a price that seems reasonable to them.
Sometimes, that is how negotiations and eventual sales occur. Both sides are trying to determine exactly where the other side stands AND how strongly they are fixated on their position. Bottom line, nothing ventured; nothing gained.
REL made the point about the buyer's agent educating the buyer on the comps, all too frequently the problem is the seller needs to be educated on the comps.
If the buyer and her agent have done their homework and submit comps supporting the lowball offer then maybe it is not so much a lowball offer but an over priced listing.
If it's just a stupid offer, and we've gotten those we don't even counter but if it's just low we don't get insulted and they shouldn't get insulted if we counter with something they don't like.
REL - did those 2 bids ever close? I do have one story about a low-ball that was accepted, but I do know it's unusual.... Couple was getting divorced, and wife was selling the house to split the proceeds with the husband. They had worked out all the other settlements, but I'm guessing it was not a friendly divorce.... The house was on the market at a fair price, someone came in with a REALLY low offer and the wife accepted it on the spot. Turned out, she didn't need the money and she liked taking money out of her ex-husband's pocket..... . I guess you just never know, so many people will just take the chance - and don't know why anyone wouldn't at least respond, even if it's at the same price (or maybe $1K less), to send the signal that the low-ball option won't work.....
Wow. The house deed must have been in her name only or something. Isn't the law/guideline for married couples, "One to buy, two to sell" in terms of signatures required on contracts?
I think there was something strange going on, but the husband had put the house in her name (for business reasons, evidently), and she was REALLY mad at him....... He was a bad boy.....
Now I just saw a thing on AOL today about an ex-wife who threw all of ex-hubby's stuff in the front yard marked "free." She had profanity written in spray paint over his car, too. Must have been that house!
WRT divorce situations, we typically obtain a court order authorizing the sale within certain paramaters and specifying a price range - prior to listing the property. To complete the escrow, however, both sellers must sign the deed and other paperwork. That's easily accomplished, separately.
If anyone's interested, we can start a new topic about these challenging situations and return Lowball Offers to REL -
JMHO, as usual.This message has been edited. Last edited by: RErocker,
I think lowball offers are a thing of the past here more recently on bank owned properties.. IF they are a decent property..rather... a bidding war.
In fact, I have seen bidding wars on higher priced inventory here in Tampa Bay.
On another note--- who made my head big?This message has been edited. Last edited by: real estate lady,
Oh, REL!!! Nice to SEE you!
Not sure what is going on. The boards have been acting up for me these past few days. I thought it was just me. Sometimes the writing and layout is all goofy. For this thread, I'm on immediate email notification yet it states my notifications are off. Not sure what is going on.
REL, if things are looking good in your slice of the world, great.
Elsewhere low ball offers are an opportuity to negotiate.
The webmasters should start looking at their website, It is not compatible with probably the latest browser and many things are not working properly, why haven't they done any of this? Because I haven't employed them otherwise, they would have lots of questions to answer.
From her comments on this thread and others, REL is a huge advocate of negotiating with low-ballers. She's often mentioned that a seller who chooses not to negotiate low offers could very well be missing out on a satisfactory home sale contract.
...and that is very true...lowballers sometimes get the house, and have a better chance when there is not multiple offers. MY INVESTORS ARE OVER-BIDDING ON INVESTMENT PROPERTIES AS MUCH AS 7500 OVER AND STILL LOSING OUT. GUESS TO WHO?--- WELL ITS FIRST TIME HOME BUYERS!!
ITS' ALL ABOUT "YOUR" MARKETPLACE!
The more buyers..wanting the same house..can create a bidding war..which is what we have seen here recently. When I see multiple offers-- bidding wars on properties..I know now the market is taking a turn in becoming balanced.
FLORIDA HOWEVER IS STILL A BIG BARGAIN AT PRESENT!
The market is changing here.This message has been edited. Last edited by: real estate lady,
ITA - All RE is local. In addition, it's almost never static and can change rapidly.
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