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I have had varying opinions about offers especially since most of my family is in real estate. I hear not to offend sellers and some say go in low ( not to unreasonably low ).
Truthfully, i don't really see why get offended? my sister is in real estate development and sold many homes and even her own home. She always get tons of low ball offers but doesn't find them offensive or every gets angry about them. She will admits laughing at some of them. It only takes less than 5 minutes to look at the offer number as a seller and say yes or no. In the end, most of my families opinion is its the buyers wasting their time if they constantly put low ball offers without any plans of going up. So it doesn't bother them or really waste their time.
so have you every been offended by a offer? or just laugh at them?
When we sold our townhouse, one buyer offered something like $50K less than the asking price...our realtor actually called him and laughed at him, told him we had other offers, and not to waste her time!
We weren't really offended...we figured it was January, the house had been up since mid-September in a terrible market, and he figured we were desperate. We just laughed it off, and had a good offer a couple days later.
our realtor actually called him and laughed at him, told him we had other offers, and not to waste her time!
Did this actually happen? Did your realtor actually phone someone for the sole purpose of mocking their offer to their face? What's the point?
Forgive me...but that sounds totally bizarre. I can't imagine picking up the phone and hearing an agent cackling into the receiver and insulting my unacceptable offer--it's like some kind of a Twilight Zone episode.
It's fascinating to me that people involved with real estate have actually become THAT strange. Are we now at the point where turning down an offer requires mockery? Things have gotten very interesting out there.
I think the concept of being "insulted" by a lowball offer is one that's at least partly manufactured by agents and sellers that's now part of the culture and institutionalized. It's a negotiating tactic to pressure buyers.
We just got through a round of negotiations in which the sellers were "insulted" by our offer of 12% under asking for a house that has been on the market for years. However, our offer was based -- down to the dollar -- on comps, the market, the length of time listed, and repairs/upgrades. We each ultimately met halfway.
This is business, it's not personal. If sellers understand that, then they wouldn't react in an emotional way. If they do react in an emotional way, then they obviously can't differentiate between the two. If they CAN differentiate the two, and still claim to be insulted, then it's just part of the negotiation game.
Obviously, everyone has access to comps. It's easy to start there.
Then make adjustments for:
Costly repairs or upgrades
A declining market (though there's only so much you can do)
Premium features compared to comps (or a lack thereof)
Land value, etc...
Likelihood or availability of other offers.
Availability of significant, similar inventory
Both sides should have done this math to arrive at a ballpark number. If the offer comes in and it's way out of the ballpark, all sellers need to do is politely decline to consider it or counter. If it's modestly in the ballpark, simply counter.
I'm afraid that too many times, each side treats this as more of a game than a science. I'd say the ONE major wildcard right now is the dramatic loss of value - we've seen prices adjust by $200k downwards in our area.
Therefore, if someone's making a lowball, it's quite possible that they're trying to simply cover their exposure to loss, which is prudent, not greedy.
Last edited by Scott99999; 03-01-2009 at 03:07 PM..
Therefore, if someone's making a lowball, it's quite possible that they're trying to simply cover their exposure to loss, which is prudent, not greedy.
You lost me at "prudent". Good grief, if you want a rock bottom price, then wait for the bottom.
I see your point, but I'm not sure that's the answer for everyone or what the collective definition of "rock bottom" is.
All of these so-called "experts" keep telling us that the bottom is always right around the corner. I remember people saying the fall and summer of last year that we'd be rebounding by now. Obviously, companies are just starting to get slammed with the effects of the downturn and it will be six months to a year before rounds of layoffs create new foreclosures.
Since the government is functionally manipulating the market in an attempt to keep that from happening (with a home purchase credit and interest rates at an all-time low), there can be many compelling reasons to buy right now, some personal, some not.
But it's certainly not an environment to pay more than what the house is worth and many sellers are emotionally clinging to the market of 2005 and 2006. Most houses that are currently comparable to the one we bought have been on the market for 2-3 years. Obviously, they're not priced relative to what the market will pay or they would have sold. And I'm not sure it will be helping the sellers to wait for the inevitable.
Last edited by Scott99999; 03-01-2009 at 04:15 PM..
Most houses that are currently comparable to the one we bought have been on the market for 2-3 years. Obviously, they're not priced relative to what the market will pay or they would have sold. And I'm not sure it will be helping the sellers to wait for the inevitable.
I think this point is really worth stressing. Last summer three owners told my agent they would not give their house away (to me) and yet, the houses have now been on the marker for well over a year at the price they insist they will not go below. That fact alone is proof (to me) that the price is too high--it can't be sold at that price. Therefore, I don't want to pay it (although, technically, I could 'afford' it) because I would own an asset that is worth a lot less (who knows how much less) then I paid for it.
I am waiting, not lowballing, because I agree it is a waste of time. I might wait three years. Either prices will stablize, at which point I won't feel like I am buying a declining asset, or they will come down. (or they will go up)
What gets me is the life style owners must endure. How can you stand to live for so many years with people tramping through your house like that? (and all for no reason, it seems, because the houses can't be sold at that price). All three of these people do not 'have' to sell their house, they told my agent.
You lost me at "prudent". Good grief, if you want a rock bottom price, then wait for the bottom.
This comment got me thinking. How do we get to the bottom of this in terms of price? Lower offers for houses correct? If buyers as a whole refuse to pay a certain $ value for the houses and ONLY buy at what they consider fair value (which may be lowball depending on seller price & buyer prospective) then the values will finally find a bottom.
But I keep noticing houses listed for close to what these current owners paid for in 2005/2006 at the peak of house prices because that is when they bought or that is probably what they owe. So if a house I saw is listed for $375k, was purchases in late 2005 for $369k (and bought in 2001 for 229k) I see current SOLD comps for around $290-$310k.
So do I wait till they lower the price to somewhere in those sold comp areas or do I offer $300k (20% below asking) to make my point?
Seems like a lose lose situation for the buyers and sellers. Not sure what to do.
Seems like a lose lose situation for the buyers and sellers. Not sure what to do.
I so agree with this statement. I am starting to realize folks on both side of the fence are hitting a brick wall. NO one wants to loose money.
I think it really boils down to the sellers have more to loose - they have the depreciating asset. You as the "buyer" don't.
As a homeowener today, not in the market to do anything but sit back and watch, at times I get sick thinking why on earth I wanted to be a homeowner. I do think for a potential buyer to complain that they can't buy a home on the terms right now is a little whacked.
Folks are starting to say that "buyers" right now are a "different breed" and I totally agree. Not trying to disparage anyone or offend - just the way I see it.
As a homeowener today, not in the market to do anything but sit back and watch, at times I get sick thinking why on earth I wanted to be a homeowner. I do think for a potential buyer to complain that they can't buy a home on the terms right now is a little whacked.
Folks are starting to say that "buyers" right now are a "different breed" and I totally agree. Not trying to disparage anyone or offend - just the way I see it.
"Different breed" with cause. Think about it. Owner today is losing money daily. They have a house and it is losing value everyday. Some got in over their heads, some just bought at the wrong time, etc... Those owners are the 1st ones to have to take any financial hit in this game. They have to list the house for todays market and odds are that means losing real money or paper value (expectations of price in 2006). Either way it is going to hit them in the pocket and that is a tough pill to swallow.
Buyers know that whatever they buy today is ALSO going to be worth less tomorrow with no end in site of how much lower it can go. So they don't want to buy at a high price today KNOWING that in the next year or maybe several years their house will be worth less than what they paid for it today. That is ALSO a tough pill to swallow.
So the buyers today are trying to hedge that lose as best they can. And since the buyers are not the ones sitting on the time bomb (owning the house) they have all the leverage. So they are using that to their advantage. Just as sellers did from 2000-2006 when prices were increasing so fast that they could list at above market rates and still get multiple offers.
Sucks for both sides. But it will end up being a waiting game until the Sellers accept the market and list accordingly. The longer they wait the more bitter buyers get and hence all the complaining.
I want to buy. I realize I have about a $10-$20k disconnect with the market. I think most listings (actual sold) are about $10-$20k over what I value them at. I reailze I am a little off the mark on fair value today. No shame in me thinking that and admitting that. I also think if I wait that gap will close and maybe overshoot it. And maybe I will suck up $10k in price if the house is the RIGHT house. But so far the gap is still there (on a SMALL % of listings) and much larger on most listings. So I sit and wait. Money in the bank. Sitting in my rental. But my patience will pay off.
Did this actually happen? Did your realtor actually phone someone for the sole purpose of mocking their offer to their face? What's the point?
Forgive me...but that sounds totally bizarre. I can't imagine picking up the phone and hearing an agent cackling into the receiver and insulting my unacceptable offer--it's like some kind of a Twilight Zone episode.
It's fascinating to me that people involved with real estate have actually become THAT strange. Are we now at the point where turning down an offer requires mockery? Things have gotten very interesting out there.
No, I'm a complete liar, and it never happened. Yes, it's true or I wouldn't have posted it!
The people offered something like 40K less than our asking price, which had already been reduced twice, and was still less than the comps in our neighborhood. Our agent did call, and did tell them the offer was ridiculously low, and would they like to put in a realistic offer to be considered. It wasn't based on emotion, or trying to get more money. Just a real offer. It's not like the house had been listed for years and was a pit.
Have a great day!
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bizarre
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Yes, it's true or I wouldn't have posted it! 
