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Real estate buying and selling advice, potential buyers making verbal agreements, home buying etiquette, buyer and seller relations, price negotiation tactics
From amax41's post" "As usual this is the standard Real Estate sales guy approach to life down here. I have to be honest it makes me puke sometimes.... here is why.
"
Approach to life? We're just discussing why the OP isn't having luck getting bites on his offers. The asking price is just that the asking price, and the start for negotiations to every Tom, Dick, and Sue from the street, clarified in my second post. In most cases the asking price is not the end all be all in the price of the home.
We go look at this house...we establish in our minds that $325K is way out of line. Here is what we hear over and over and over.... the spiel I cut off in the quote up top...AND.... "You don't want to offer him too low a price because you'll insult him".
That last line leads to the "puke" of it all. Insult?? maybe he's an idiot! Face it RE Sales people could really care less what you list it for as long as it's in range they are fine. It's all about that commission check (especially here in FL). The offer / counteroffer process is negotiation. So if I offer $240K for that house so what! Note that it's a STARTING POINT. If the seller is insulted then I need to move on because my bet is, based upon my experience, that the house is done up cheaply, has problems that are hidden, done incorrectly (as in the owner did it but has to read how to use a hammer), or all or some of the above. Therefore I really need to walk away.
I agree, the standard speil that includes the line "You don't want to offer him too low a price because you'll insult him" is a bunch of BS. It's only true if you can't substantiate why your offering what your offering. Some sellers ARE way out of line with their prices. Eventually they will either be beaten down by the market (no offers, or lots of offers well below asking), will take their homes off the market, or never sell.
NEVER did I say don't offer what you think the home is worth to you because you might insult the seller. And I NEVER will say that. As far as what I said below what you quoted of me, It's totally true, but I never said what you have to give is price, you can give more proof of your seriousness, your ability, or the way you substantiate your position.
I think you are dead on with everything else you said though about the negotiation process. Everything is a starting point. And my job whether representing a seller or buyer is to hit the counter-offer ball back into the competitors court, and wait for them to hit back, even if it's the same offer as before, that way we quickly know whether the deal will be possible or not.
I can't speak for others in this profession. I think there are alot of car salesmen in the real estate industry that do much more harm than good. But don't lump us all together. On occasion there too are some good car salesmen!
Last edited by GregTraub; 01-04-2008 at 12:37 PM..
From amax41's post" "As usual this is the standard Real Estate sales guy approach to life down here. I have to be honest it makes me puke sometimes.... here is why.
"
Approach to life? We're just discussing why the OP isn't having luck getting bites on his offers. The asking price is just that the asking price, and the start for negotiations to every Tom, Dick, and Sue from the street, clarified in my second post. In most cases the asking price is not the end all be all in the price of the home.
I can't speak for others in this profession. I think there are alot of car salesmen in the real estate industry that do much more harm than good. But don't lump us all together. On occasion there too are some good car salesmen!
Ok Greg you you got the real point.... that first paragraph is the "launch" usually disgarded
If you guys really want to sell houses you need to realize that buyers are very well aware of what's going on in the market and if you waste even a moment of their time, they'll simply move on to the next. Right now, Florida property is like a flea market; If the shopkeeper of the first booth can't get off his hiney and respond to an offer, the next one will.
I expect to see the prices of Florida property decline much more in the next two years. I plan to move to FL as soon as my son is out of school this summer but will rent till prices completely bottom. If I see something interesting, I may make a lowball offer to start a negotiation. If I get no response, I'll move on to the next. I've bought several houses sight unseen. I'm not desperate and can afford to wait you out. Since I'm not desperate, I'll not be jumping through any hoops. I am the customer and hoop tricks are for merchants.
Some of you don't seem to understand that people who actually have a few coins to rub together know full well they have the advantage and they won't tolerate any sort of silliness from a salesman. If you have someone who's willing to go through all that, they're probably buying way beyond what they can afford and have a pretty good chance of not being able to close.
Exactly how can so many of you know what is a serious offer and what isn't? Are you making the assumption that if someone offers a low price, it's because they don't have any money? That's a huge mistake. People don't get rich by throwing money away. Tossing money away is how poor people stay poor. If I offer a low price, it means that's all I'm willing to pay for that particular property but it in no way shows what I have or my intentions.
From what I'm reading, it seems clear that many of you jumped onto the bandwagon and got your Real Estate licenses and rode the wave without actually understanding the psychology of sales. Now that the bubble is burst and reality is crashing into the market, many of you should just go ahead and save yourselves some agony and find a new profession. In 1993 any high school kid who could keep an instance of Windows running 30 minutes or more was worth $85K+/year in Silicon Valley. If he could spell UNIX, he was worth $110K. Nowadays, they want actual skill and don't pay nearly as well. Same thing is happening to Real Estate. Realtors got spoiled when banks were handing out loans like candy to people who couldn't afford a car payment. Those days are done. Time to start actually selling again. Don't believe me? Take a trip to Las Vegas. Their bubble started to collapse a couple years ago. You'd be surprised how many Realtors are busing tables.
Exactly how can so many of you know what is a serious offer and what isn't? Are you making the assumption that if someone offers a low price, it's because they don't have any money? That's a huge mistake. People don't get rich by throwing money away.
Or by giving away property. A serious offer, in my book, is a real offer in writing accompanied by a serious deposit. At that point the seller can take it or counter.
Quote:
Tossing money away is how poor people stay poor. If I offer a low price, it means that's all I'm willing to pay for that particular property but it in no way shows what I have or my intentions.
Of course it shows your intentions. You just stated them-you said that's all you're willing to pay. Tossing away assets is no different than tossing away money. It is folly to think you are the smartest person out there.
If you guys really want to sell houses you need to realize that buyers are very well aware of what's going on in the market and if you waste even a moment of their time, they'll simply move on to the next. Right now, Florida property is like a flea market; If the shopkeeper of the first booth can't get off his hiney and respond to an offer, the next one will.
I expect to see the prices of Florida property decline much more in the next two years. I plan to move to FL as soon as my son is out of school this summer but will rent till prices completely bottom. If I see something interesting, I may make a lowball offer to start a negotiation. If I get no response, I'll move on to the next. I've bought several houses sight unseen. I'm not desperate and can afford to wait you out. Since I'm not desperate, I'll not be jumping through any hoops. I am the customer and hoop tricks are for merchants.
Some of you don't seem to understand that people who actually have a few coins to rub together know full well they have the advantage and they won't tolerate any sort of silliness from a salesman. If you have someone who's willing to go through all that, they're probably buying way beyond what they can afford and have a pretty good chance of not being able to close.
Exactly how can so many of you know what is a serious offer and what isn't? Are you making the assumption that if someone offers a low price, it's because they don't have any money? That's a huge mistake. People don't get rich by throwing money away. Tossing money away is how poor people stay poor. If I offer a low price, it means that's all I'm willing to pay for that particular property but it in no way shows what I have or my intentions.
From what I'm reading, it seems clear that many of you jumped onto the bandwagon and got your Real Estate licenses and rode the wave without actually understanding the psychology of sales. Now that the bubble is burst and reality is crashing into the market, many of you should just go ahead and save yourselves some agony and find a new profession. In 1993 any high school kid who could keep an instance of Windows running 30 minutes or more was worth $85K+/year in Silicon Valley. If he could spell UNIX, he was worth $110K. Nowadays, they want actual skill and don't pay nearly as well. Same thing is happening to Real Estate. Realtors got spoiled when banks were handing out loans like candy to people who couldn't afford a car payment. Those days are done. Time to start actually selling again. Don't believe me? Take a trip to Las Vegas. Their bubble started to collapse a couple years ago. You'd be surprised how many Realtors are busing tables.
Great post....all the advice posted by realtors in this thread is not going to work in today's market. And this is only the tip of the iceberg, the market has barely begun its downward cycle. This is going to be a bust of historic proportions, those that do not react to it will simply lose more and more money.
The information people need to gauge how bad it will be is readily available, and always has been. Read some housing bubble blogs, educate yourself about the current economic condition of most Americans. Learn about historic housing prices vs area income, rents, etc. These blogs have been right for 5 years...unlike the real estate "experts". It is not hard to see how Florida is in big trouble going forward.
One agent talked about negotiating and batting prices back and forth between buyers and sellers...wow. With all this inventory and cheap rentals that is a great way to waste time and chase the market down.
Want to sell a house in this market? Forget what houses sold for last year or last month in some areas. Set the price based on some fundamental model...2.5 times area income, 120 times annual rent for a comparable house, whatever, but make it based on fundamentals.
If you don't get an offer within 10% of your asking price within 30 days....your price is too high for the market.
The buyers will determine what your house is worth, not an appraiser, not an agent, not what your neighbor sold for yesterday.
Great post....all the advice posted by realtors in this thread is not going to work in today's market.
Everything I posted sure will work, remember we're talking about the buyer side of the transaction and getting the buyer their best price, not talking about sellers and pricing.
One agent talked about negotiating and batting prices back and forth between buyers and sellers...wow. With all this inventory and cheap rentals that is a great way to waste time and chase the market down.
So your saying sellers should just accept the first offer regardless? Are you saying I'm doing a disservice to sellers I represent by encouraging them to at least counter offer ALL offers, no matter if they are "insulted" by it or not? Is it also a disservice to advise my buyers to negotiate the lowest price possible by starting off lower than there absolute max, anticipating a seller might counter for less than that max?
In this market a seller should never reject a bonafide offer, but they also shouldn't accept the first offer (unless that is what they want to do) if they beleive the buyer is willing to pay more.
If you don't get an offer within 10% of your asking price within 30 days....your price is too high for the market.
Agreed
The buyers will determine what your house is worth, not an appraiser, not an agent, not what your neighbor sold for yesterday.
100% correct. But why assume all buyers offer their best the first time out? If the buyer rejects the counter, the seller can always offer the buyer their original terms....sure there's a small risk the buyer went under contract with another home in the moments after the rejection, but doubtful. I always leave it up to the seller whether to accept the offer as-is and have the house SOLD, or counter hoping for more that may not be there.
Greg, you sound like a stand up guy trying to do the best for your sellers.
Best of luck. I just happen to think this Florida real estate thing is going to get far worse than most people imagine.
But I believe cheap housing is far, far better for everyone in the long run.
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