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The point I was articulating is that most buyers know that prices are going to fall further next year. The big picture favors falling prices. Ergo, the car (house) will be more pimped out (have more features) and cost less next year.
I'll try to bite my tongue and not say "I told you so".
No they don't. They do believe the prices will fall further next year. And they will believe it one year too many. Happens every time.
Last 5 houses I made offers on were turned down. Each one sold for less then I offered. (one of them at a 40% discount)
Yeah, you'll find those that lowball for the sake of lawballing. My agents think I'm crazy by making such offers, but I do know the market, and what properties in my area are selling for. More importantly, I know what properties will be selling for in 6 months, something sellers dont want to hear until is to late.
Hopefully you won't get offended, but I'm trying to be helpful. You say that you know what properties will be selling for in 6 months. Actually, nobody really knows... you might have an opinion but the seller will also have an opinion. For ex: when you tell a seller that you know his $400k home is only going to be worth $300k in 6 months, the majority of the time they'll get irritated with you for wasting their time, because they know you're just guessing and trying to get an incredible deal. So if later on they decide to lower the price, they're not going to call you, because your the person who wasted their time and instead they're going to take someone elses offer who didn't offend them with a lowball offer.
Sounds like wise advice, I hope more realtors will start to understand the importance of looking at a lowball as a starting point and remaining calm.
Some other realtor here pointed out that the majority of buyers don't want to haggle too much (I think that is accurate) and that out there, the lowballers are the ones who don't mind, the haggling vanguard if you will.
Couldnt agree more. I recently offered $110K on a property listed for $162K, (property needed work the bank, seller, didnt know about), they countered at $160K, I went to $120K, they withdrew their $160K offer after asking for loan approval documents and told me to talk.. (property on the market now for OVER 2 years).
Where did this 2 way communication go? I would probably have paid what their 2nd offer was, but to tell me to pound salt and withdraw their $2K original discount is an action I'll never understand.
The seller will be holding onto this property for another 6+ months, and eat another $5K in taxes. Heck, in the last week, the number of properties lised for sale in this neighborhood went up 55%
Hopefully you won't get offended, but I'm trying to be helpful. You say that you know what properties will be selling for in 6 months. Actually, nobody really knows... you might have an opinion but the seller will also have an opinion. For ex: when you tell a seller that you know his $400k home is only going to be worth $300k in 6 months, the majority of the time they'll get irritated with you for wasting their time, because they know you're just guessing and trying to get an incredible deal. So if later on they decide to lower the price, they're not going to call you, because your the person who wasted their time and instead they're going to take someone elses offer who didn't offend them with a lowball offer.
Well when I offer $200K for a property listed for $300K, they tell me no, and then only to lower the asking price to $200K a month later (and then sell for $182K), I consider my offer a very fair analysis as to what the property is worth. I would never project values out several years, or even project values across a state, but I do know what properties are worth in the neighborhood I'm dealing in, and I can compute the math figures showing where price values are headed by comparing sales prices now vs last week, and I can see and know in a moment when prices are turning around as the number of properties listed and sales prices fluctuate.
The fact will remain that a sellers agent has a duty to get the highest price possible for a property. By lowering the asking price to what I previously offered, without calling me and notifying me, and seeing if I'm still interested, they fail to act in the sellers best interest.
Not sure I should be concerned about a seller "being offended" and fail to see how I wasted an agent or a sellers time because I gave them a fair offer on a property they had listed. Its not my fault the market was tanking on them, and its surely not my fault they had over priced their property to begin with, something that was confirmed by watching the sales price come in lower then my offer.
Well when I offer $200K for a property listed for $300K, they tell me no, and then only to lower the asking price to $200K a month later (and then sell for $182K), I consider my offer a very fair analysis as to what the property is worth. I would never project values out several years, or even project values across a state, but I do know what properties are worth in the neighborhood I'm dealing in, and I can compute the math figures showing where price values are headed by comparing sales prices now vs last week, and I can see and know in a moment when prices are turning around as the number of properties listed and sales prices fluctuate...
A home on the market at $300 and currently valued at $200 is 50% over priced. I'm wondering why an agent would take a listing that much over priced. The comps would surely show it, and it's not going to sell at that price.
I've read the posts in this threat and it occurs to me that what we are REALLY talking about is negotiating STRATEGY, isn't it? The conversation seems to get bogged down in valuation issues, but in the end its about having a strategy that works.
Buyers who are ready to make multiple low-ball offers just to see if they can find the one seller (in ten...or maybe in a hundred) who will take it are doing so strategically. They see houses as commodities where price alone is the determining factor of value.
Evaluate it in terms of its strengths/weakness:
Strength: The buyer know their hard "walk away" position and has a tremendous leverage with a desperate seller. The buyer doesn't have an emotional attachment and will quickly move on if the seller isn't open to their price.
Weakness: It typically gives only 1 shot at getting to a deal because the majority of sellers will counter what they see as a ridiculous low-ball well higher than they'll really go, but at the same time it sours the tone of the negotiation and closes the door to future rounds of counter-offers.
This is an I WIN-you lose strategy. Is it effective? Yes, with a seller who is not emotionally connected, or who IS extremely desperate to sell. It effectively eliminates the seller's goals from the equation.
Location: Halfway between Number 4 Privet Drive and Forks, WA
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This is an I WIN-you lose strategy. Is it effective? Yes, with a seller who is not emotionally connected, or who IS extremely desperate to sell. It effectively eliminates the seller's goals from the equation.
You hit the nail on the head. And kudos for putting it so eloquently!
Of course, someone looking to buy a house for price alone can get a wonderful selection of foreclosures. All of a sudden, that's just not good enough?
Maybe they'll get lucky, maybe not. I'd take my house off the market or rent it before I would consider a lowball offer, but that's just me. I'm sure there are a multitude of sellers out there that would do the same.
But you never know, you might get lucky!
This is an I WIN-you lose strategy. Is it effective? Yes, with a seller who is not emotionally connected, or who IS extremely desperate to sell. It effectively eliminates the seller's goals from the equation.
That's a fair analysis. I think it's a smart strategy in a buyer's market, personally.
A home on the market at $300 and currently valued at $200 is 50% over priced. I'm wondering why an agent would take a listing that much over priced. The comps would surely show it, and it's not going to sell at that price.
It gets worse, the original asking price on the home was $799K.. Its in a very mixed community, lots of $100K properties, and lots of $1M properties.. Very easy to make an argument leaning either way.
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(property on the market now for OVER 2 years).
