Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Hi All. Just wanted to post a quick question for all you experts out there.
I have been looking at a home that is in need of significant updating. I thought about making a lowball offer on the place and my agent told me that if I want to do that, then I "need to have my financing in place." I asked her if she meant pre approval (I am pre approved) and she said no. She said that when you go in with lowball offer they usually want a "loan commitment," not a pre-approval…because everyone and anyone can get a pre-approval.
I asked why and she said because you need the loan commitment in order for a low ball to be ‘attractive’ and not ‘insulting’ -- because it shows you are ready/and able to move forward.
Do you agree with this? Also, any suggestions?
It's not that I don't trust my agent, but she is a family "friend" and she has used some high pressure techniques in the past to get me to move on a property. I just want to make sure that her advice is sound. What do you think?
The problem is one of verbiage. Out here, her advise would make no sense as you can't get a loan commitment until you are under contract. Loan commitment means the underwriter has seen your documents and approved you. The agent might be referring to DU (Desktop Underwriting) approval but that still isn't final underwriting when the loan commitment happens. In your part of the world loan commitment may refer to something else.
Out here there is
prequalification letter, which means that the lender pulled your credit and you told them your information. This is very weak.
Preapproval letter, which means that the lender pulled your credit and you have submitted all of the documentation requirements to prove what you said on the application. This is what every one does.
Loan commitment happens after the underwriter has approved the application which happens about a week before close of escrow out here.
Sounds about right. Why would you question her just because she has "high pressure techniques"? Either you're serious or you're not, and you need to show you are because it sounds like you aren't.
It does help to be pre-approved. But if you ask your agent to put in an offer for you, she should do it.
Yes, she should, and must, submit the offer. However, she also should, if she's doing a good job, advise you as to what you need to do in order to increase the likelihood of a positive response. Which in this case would be to get a true pre-approval (you're approved as long as nothing changes in your financial picture before closing) but whatever house you choose still has to pass the lender's requirements.
Since lowball offers tend to irritate sellers you need to do what you can to try to fend that off, and that's what she's telling you you need to do.
Sounds about right. Why would you question her just because she has "high pressure techniques"? Either you're serious or you're not, and you need to show you are because it sounds like you aren't.
Because I think she's likely to say anything to get me to do what she wants me to do...which is buy a house. That's why.
I am serious about buying a house, but I don't appreciate the pressure and I'm posing this question here to see if her advice sounds right to others, as she has been less than honest in the past. There was recently a house that I had a moderate interest in, but it wasn't quite right for me -- so she started telling me that there was another offer and that I needed to hurry and put an offer in or I would lose the house. There was no other offer.
So, don't make the assumption that I'm not serious. My question was about whether or not you need to have a loan commitment to make a lowball offer or if that was another lie she was feeding me to try and manipulate me into making an offer before I have decided that this is the house for me.
A low-ball offer (although you haven't said how low) has low probability of success anyway. The agent knows this. If you look like a client that is going to make a string of low-probability offers the agent may very well fire you before you fire her.
By your own admission, you are lowballing the seller. She is giving you advice about how best to get a lowball offer accepted. If you wish to NOT take her advice by simply submitting your lowball without additional incentive to the seller then she MUST comply with your request to submit the lowball offer, and you deal with the consequences. You might not get the home...or you may need to backtrack and decide what a more fair offer would be.
Truth is, I never bought the assertion that a lowball offer would 'insult' a seller. That's broker bull**** talk. If I was selling my house and I got a lowball offer I'd simply say no and move on to hopefully other offers...and then if I kept getting lowball offers then maybe I'd have to own up to the fact that I've been highballing the buyers.
In the end, you work for yourself...and your broker works for you too. Take her advice if you think it makes sense, and don't take it if it doesn't. And if you're constantly disagreeing with her, find a new agent.
I see some issues that others are kinda dancing around. I think the OP should take a look these issues and decide what their real motivations are and what sort of help they really want / need from a buyer's agent.
Firstly it has been experience that lowball offers are not productive in helping the buyer get the house from that offer. If the home is listed at say $300k and most of the sales in the area are fetching around 90% of listed price and you offer like $250k odds are the seller (and their agent) will assume you are a flake. Even if the home is in poor condition the fact is relative to other homes that have sold or available as competitive inventory the seller is unlikely to drop that much on a single offer and may not have the motivation to counter. It is not so much an insult or a waste of time as just a step that some sellers will not follow...
Secondly, if your agent is NOT giving you solid advice based on honest information you should discontinue working with them. Period. Now if you know for a fact that there was no other offer on the previous home, and the listing agent was not saying something "like I am expecting offers", but those offers never materialized that is a gray area. If, however, you agent "makes stuff up" you are better off without them. Find a new agent that wants to advocate for your interests or you will regret it!
I do not believe that the buyers "work for themselves". I do agree that a buyer should be EDUCATED by their agent and on their own as to the current market conditions in their locality, the local practices and traditions of what other agents will expect, and the legal requirements in their state / county / city. Any agent that has worked for long enough to have a list of satisfied clients is the kind of agent that gets referred to new clients and ought to be trustworthy, though even "good agents" can get stressed out by hectic seasons, pressure to earn from a greater volume of lower margin sales, situations at homes that demand time that otherwise be devoted to clients and whole host of internal issues at various real estate offices / firms. Most agents VERY MUCH appreciate a detailed list of what is a MUST and what the buyer could live with. If the buyer initially says "I only want to see bargains" and then gets frustrated with the amount of updating that such homes would require it is real hard to switch gears (and price points...) and show "move in ready dream houses". All agents should be supplied with the kind of documentation that details what is a realistic range of prices to target. Sometimes it is helpful to translate an extra $10k in purchase price into $74 a month (or whatever current interest rates work out to...). This is NOT pushy, it is a way to help clients understand the value of cutting back on Jamba Juice and Starbucks and changing their perception of home ownership.
Buyers ought to be "on the same page" as their agent and when they are not BOTH agent and buyer need to hash out their expectations. If that happens in a clear way it helps both parties and leads to a better outcome for all.
Quote:
Originally Posted by number419
By your own admission, you are lowballing the seller. She is giving you advice about how best to get a lowball offer accepted. If you wish to NOT take her advice by simply submitting your lowball without additional incentive to the seller then she MUST comply with your request to submit the lowball offer, and you deal with the consequences. You might not get the home...or you may need to backtrack and decide what a more fair offer would be.
Truth is, I never bought the assertion that a lowball offer would 'insult' a seller. That's broker bull**** talk. If I was selling my house and I got a lowball offer I'd simply say no and move on to hopefully other offers...and then if I kept getting lowball offers then maybe I'd have to own up to the fact that I've been highballing the buyers.
In the end, you work for yourself...and your broker works for you too. Take her advice if you think it makes sense, and don't take it if it doesn't. And if you're constantly disagreeing with her, find a new agent.
Please register to post and access all features of our very popular forum. It is free and quick. Over $68,000 in prizes has already been given out to active posters on our forum. Additional giveaways are planned.
Detailed information about all U.S. cities, counties, and zip codes on our site: City-data.com.
Please register to participate in our discussions with 2 million other members - it's free and quick! Some forums can only be seen by registered members. After you create your account, you'll be able to customize options and access all our 15,000 new posts/day with fewer ads.
Two (or more...) problems...
