Low Ball Offers, Not All Homes Are Distressed Properties

Please do your homework and get educated about making low ball offers. I have been on both sides of a transaction that included a low ball offer and have learned a great deal of what to and not to do.

I will NEVER forget my first low ball offer on a home that my Buyers wanted to make. I couldn't find any reason to offer a lower price than it was but my clients insisted that they low ball. "Lets ask 20% less because that is what all the TV shows say to do" is what they told me. This was my clients' dream home. They absolutely loved it but wanted to see if they could get real deal. I advised strongly against it but did as they asked. Days went by with no word from the sellers agent. Finally, the agent called me back to tell me that they are rejecting the offer and do not want another offer from my clients. WOW! I was not expecting that. I had the unpleasant task to tell my clients. They were not happy to say the least. I asked the other agent why they don't want another offer from us, you know what he told me? Because he has been in Real Estate for 50 years and knows that my clients will NEVER be satisfied~just by looking at the offer received. His clients were totally offended.  After about 30 more homes and a closing that almost didn't happen due to my Buyers, I realized that he was right. From that point on, I advise my clients in advance about putting in offers.

Some things to consider are:

Do your homework:

1.  Is the home priced correctly? Is the home in distress? If it is, advise your client of those facts. You will have a better chance to have a "low ball" offer accepted if the home is a short sale or foreclosure. 

2. Are you adding in concessions to your "low ball" offer?If you are, it probably won't happen? Not only are you asking a much lower price on a home but, to add salt to the wound, you want the seller to pay for closing costs/prepaids/escrow and a home warranty. Rejected!

3.  Low-ball offers that are accepted are not good to the neighborhood.Homes that are purchased at a significantly low price than its real value have a negative impact on the neighborhood's real estate market~It lowers the value of the homes within the neighborhood. Because of the strict CMA's the banks use (they only go 3 months out in our area), the house sold will become a comparable item for making CMA's. New sellers would consider the selling price of your home so that they can name their price tags. Moreover, buyers use them to lever their offer. If you sold it cheap, future offers for homes in your neighborhood will also be within the range price of your acquisition.

4. Earnest Money.A seller will be more willing to work with a buyer if they give a larger amount down for earnest money. Don't skimp here. If you don't have the money to put down, you are not coming across to the sellers like you are serious buyers and seem like you are just "testing the market" as a Buyer.

5. And this is a doosy! If you are already working with an agent, don't call the Sellers' agent and say that you are not working with any other agent to get information about the home (information that the buyers agent could have found out) and then proceed to state that you had put in an offer on another home which was rejected by the Seller because of low balling!?!?!

TRUE STORY! Got the call. A person called and inquired about one if my listings. The first thing out of my mouth was "are you working with another agent?" Her reply was "well, not really." She had seen my listing on the MLS for many months and noticed the significant price drop ($10,000). I told her all about what the house has to offer and that the Sellers wanted the home to be the best priced home in the neighborhood (which it was). She was extremely interested but then proceeded to tell me that she fell in love with another home recently and offered $149,000-which was way below what the listing price way. Told me that the Sellers countered with $10,000 morethan the asking price (which they had already dropped $25,000)! YIKES. She wanted my opinion as to why that would be. I told her that most sellers don't like to be low balled and they probably added the price of all her concessions into the price of the home that was already a good price.  I then ask her who her agent was? She tells me. I tell her that if she would like to go see the home, to give me a call. Yep, you got it. She was playing us both and was working with another agent (after a quick phone call on my part). Next thing I know, WHAM, got the same kind of low-ball offer on my property from this Buyer~which happens to be $15,000 less than her rejected offer.

Agents, please also advise your clients to not speak with the opposite agent-even to just get information, That is YOUR job. Buyers, you have a way of letting things slip pertinent to your offer.

A Buyer and their Agent need to communicate. In today's Buyer's market, most home prices are dropping to what they should be. Save the low ball offers for those homes which are over-priced, short sales or foreclosures.

Happy House Hunting.

Diane Casale, Coldwell Banker First
 

 

Follow me on Facebook, Diane CasaleDiane Casale on GoogleFollow Diane Casale on TwitterDiane Casale on You TubeDiane Casale on LinkedIn

DIANE CASALE, REALTOR, ABR, SNP

256-679-6470

Coldwell Banker First

Huntsville, Alabama

 

 Locations of visitors to this page

© 2010 Diane Casale, all rights reserved

 

// Locations of visitors to this page

Comment balloon 109 commentsDiane Casale • September 06 2010 05:00PM
Low Ball Offers, Not All Homes Are Distressed Properties
share
Please do your homework and get educated about making low ball offers. I have been on both sides of a transaction that included a low ball offer and have learned a great deal of what to and not to do. I will NEVER forget my first low ball… more
Things to do in Huntsville, Alabama this weekend 9/3/10-9/6/10!
share
Well, the end of Summer and with that comes the last weekend for many things to do in Huntsville, Alabama. If you are looking for some fun this long weekend, keep these things in mind: Now thru Sept. 6, 2010: Star Wars Exhibit … more
Huntsville, AL Does It Again! Another Top 10 Winner!
share
Huntsville, Alabama does it again. This is the place I have called home for 12 1/2 years. I have gone from being the "Yankee" (growing up in Cleveland Heights, Ohio ), to just being one of the MANY people who have moved here from all over… more
Wordless Wednesday… This is going to be fun to clean up!
share
more
Tribute to Laurie Manny
share
No other words… Laurie Manny was one of the first ActiveRain members to pick up the phone and call me when I wanted to know about titles, tags and keywords. Laurie Manny was one of the founding members on ActiveRain that moderated in its… more
A Challenge For You Negative Thinkers…
share
I am sitting here in a quiet house, cup of hot tea and trying to get motivated to start my day. The news is on in the background… #1 big mistake! All I am hearing is how horrible the economy is, how the housing market is at an all time low with no… more
Huntsville, AL #2 Best Market For Real Estate Investing!!
share
Another great ranking for Huntsville, Alabama as seen in The Wall Street Journal today (August 24th, 2010). We are now ranked #2 as the Best Market For Real Estate Investing. Congrats!! Read on: Looking to snap up some investment… more
Saturday Funny!!
share
My Mom and Dad e-mailed this to me this morning and I HAD to share. My Living Will Last night, my kids and I were sitting in the living room and I said to them, 'I… more
New Homes in Bell Grove Manor, Huntsville, AL by presented by Legend…
share
Well, we have all been waiting to find out what homes are going in the Bell Grove Manor subdivision and here it is!! I personally went to see these home in another subdivision and they are REALLY CUTE, LARGE and affordable! Legend Homes will be… more
Every Seller Needs To Know, What Sells a house?
share
A very special THANK YOU to Carra Riley for posting this! Diane Casale Every Seller Needs To Know, What Sells a house? There are four variables that sell a house. 1. Price &… more