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I'm jumping into this discussion very late, but I can offer some insight from my own experience, since I sold and bought a house late in 2007.
First, as has been stated by some others, it's all about being realistic and pricing your home at FAIR MARKET VALUE. That means hiring an experienced realtor who knows not only what the local market did 6 months ago, but what it's doing now and may do in 6 months from now. The fact that you think your house is worth some inflated number means nothing.
I sold my home in New England in 2 weeks with multiple offers at or above listing price. I was realistic and got full price offers, with any shortcomings of the house and the market already priced into the listing. I didn't list my house at 50K over market and then play this waiting game, reducing and haggling. I wanted my home sold, and I did what it took to sell it. Could I have gotten a few thousand more if I had been willing to wait another 3 months? Maybe but maybe not. It wasn't worth the risk for me.
As far as buying...same principle. You and your experienced buyer's agent will know when a property is over priced for the market. If you like a property but it's over priced, there is nothing wrong with making a FAIR MARKET VALUE offer, but just throwing out an insanely low offer because you feel like a wheeler/dealer is not a wise move.
We got a couple of lowballs on the sales side and just failed to even respond. I didn't dignify them with a counter offer. Not worth my time. As a buyer, I took that attitude and made fair offers. One seller had inflated expectations for what he could get for his house and rejected my fair offer. That was in August 2007 and the house has been taken off and relisted in March 2008 at BELOW what I offered in August. Just another seller with an unrealistic idea of FAIR MARKET VALUE who has lost time and money.
In no way guys have I called anyone out of there name, when I said stupid/idiot it was someones act not them personally so if I offended anyone I am sorry. Now back to the lowball!!!!! being realistic I do know you can't go in an offer someone some crazy off the wall price for there home but I also know in today's market you can probably get a pretty good deal what ever that might be.
Just like buying a car, yes car dealers are having a hard time right now and will deal some but go ahead and try and offer them 10k for a 25k vehicle and see if you drive off in it or not.
Just my 2 cents....
In 2 years I could buy that 25k car for 10k..
But in 2 years that 400k house will be 420k..
So just offer whatever you want to offer, if the seller chooses to ignore you and not counter then just move to the next house. There are way more sellers than buyers, even if the house is priced right. The price is what anyone is willing to pay now, not tomorrow, not yesterday now.
No such thing as a lowball offer.. It doesn't hurt to try, and if the seller gets offended.. So? Do Sellers care buyers get offended when they don't bother to counter? Smart sellers will negotiate with any buyer.
Just curious. How much off from the listing would it make you consider it a lowball offer? For example, if you are listed for $400K, what price would you consider lowball? (I know this isn't specific as each situation is different.
Here is a lowball offer for you that just punches you in the gut and you feel it.
Ok, we'll go back and hike all the corners of that 140 acre mountain lot to show you the corners. But I'll tell you upfront, now that you've seen it from the top, the price is NON nogotiable. Not a penny less. It's a deal and screaming price. You've seen the best of it, but if you want to actually touch the corners before you purchase, just know, the price it set. Are you ok with the price? He says yes.
OK, the phone call comes in. I want to hike the corners to buy it!
Buyer shows up.
Looks at what he seen before from the road. Broker prepared for the hike from hell. He only hikes some, not enough to see a diff. But it was still a big deal to prepare for the hike. Gear, luch back packs and took the day off to do it. He already had his mind made up for a low ball offer. Makes a low ball offer after knowing the price is set.
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Originally Posted by cynwldkat Funny, I know someone like that too! Our friend has done this 3 times and each time the home he bidded on sold for close to that price or less 8 months to a year later. Could it be the same person or are there others like this out there?? We recently sold our home in CA but did take $40,000 less then we were asking. But we were lucky--today that house is probably worth $150.000 less. We sold in March 2007. Just for the heck of it I have been watching the area and the comps.
my wish is for every buyer and every seller to read your post. it's a wake up call for buyers who are still paying market price and to sellers who are laughing off the lowballs!
I just read on another thread that people should offer 50 percent of the asking price. To me, that's just wasting everyone's time. Even during the Great Depression prices only fell 30 percent ... not 50 percent. And there's already a lot of depreciation in this market.
I'm lowballing offers but, within reason. For instance, the current asking price on one foreclosure is $350 but, a previous bid at that price fell through. At the peak the property was worth nearly $600K.
Since the bank had previously received but rejected other offers at $300K I figured they might be ready to take that lower amount now so ... 300K is what I bid.
I just read on another thread that people should offer 50 percent of the asking price. To me, that's just wasting everyone's time. Even during the Great Depression prices only fell 30 percent ... not 50 percent. And there's already a lot of depreciation in this market.
I'm lowballing offers but, within reason. For instance, the current asking price on one foreclosure is $350 but, a previous bid at that price fell through. At the peak the property was worth nearly $600K.
Since the bank had previously received but rejected other offers at $300K I figured they might be ready to take that lower amount now so ... 300K is what I bid.
you say that 50% lowballing on already depreciated prices is a waste of time. you are ignoring the fact that the bank has taken a logical view on the market and adjusted accordingly (ie $600k down to $350K).
i seem to be running into the sellers who have maybe dropped from $600k to $575K in which case it is my duty to wake them up from the coma they fell into in 2006. fundamentally, what is stopping the price from going down further?
30% across the board takes into account all sales at the time. i will guarantee you that there were many distressed sellers who took much less than 30% off. much, much less!
you say that 50% lowballing on already depreciated prices is a waste of time. you are ignoring the fact that the bank has taken a logical view on the market and adjusted accordingly (ie $600k down to $350K).
i seem to be running into the sellers who have maybe dropped from $600k to $575K in which case it is my duty to wake them up from the coma they fell into in 2006. fundamentally, what is stopping the price from going down further?
30% across the board takes into account all sales at the time. i will guarantee you that there were many distressed sellers who took much less than 30% off. much, much less!
True ... I see your point. I was just thinking that it would be absurd for me to offer $175K (50 percent below listed price) on a property where the bank is already willing to take nearly a 50 percent write down on the loan at $350K ...
So obviously it depends on the situation. As for sellers who are still in the twilight zone ... I haven't even looked at those properties. For one thing ... even brand new homes are selling at lower amounts than that ... at least where I'm looking.
On the other hand ... there's also potential buyers who think prices are going to get down to 1999-2000 levels ... I think they're in twight zone also. If they're waiting for prices to get that low ... they are probably going to be waiting forever.
Sheri, have you heard anything on the house you bid on yet??
Nope and, it will probably be awhile. Up to 3 months is apparently standard with these short sales ...
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