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As a buyer's agent, how do they usually handle a buyer who wants to submit extremely low, lowball offers on a house that is priced correctly or even on the low end of the comparables? Do the agents try to guide them to be more realistic or is the agent required to send in the offers no matter how low they are? Can the agents refuse to submit the offer?
I'll also add that the agent probably did a poor job of educating their customer from the get-go. Eventually, that client is going to be peeved and complaining about their lousy, ineffective realtor who can't negotiate.
As a buyer's agent, how do they usually handle a buyer who wants to submit extremely low, lowball offers on a house that is priced correctly or even on the low end of the comparables? Do the agents try to guide them to be more realistic or is the agent required to send in the offers no matter how low they are? Can the agents refuse to submit the offer?
If the agent is serving as a buyers' agent, they must write and submit all offers.
That is the flip side of wisely never signing a buyers' agency agreement without a unilateral termination option for both parties.
No one, especially a real estate agent who is busy, wants to waste their energy and time on efforts that are going to go unrewarded. However, as an agent, all I can do is provide information that makes the buyer an informed buyer. I always have the option of not working with someone who insists on making stupid-low offers but I don't think I have ever opted out. My feeling is that you never know when a "low ball" offer is going to be accepted (I just had one close like that) so it is not a sure thing that an offer is "too low", and sometimes buyers will come around after losing several properties they wanted and start making more realistic offers.
I've wasted a bunch of time on people like this but they do pay off on occasion. BTW, it works both ways. I passed up an opportunity to list a property where the seller wanted a price that I was sure was too high and his reasoning was based on a number of wrong factors and his need to make a certain percent of profit. (He was an out-of-state investor.) Sure enough, another agent took it and it sold in less than a month and for close to the asking price. I taught myself a lesson there. You just never know.
I'll also add that the agent probably did a poor job of educating their customer from the get-go. Eventually, that client is going to be peeved and complaining about their lousy, ineffective realtor who can't negotiate.
All the responses have been helpful. I want to hear the legal and real life side.
It does seem that extreme low ball offers can be with more inexperienced agents who are not educating their clients on the market and showing comparables of homes they are interested in. I don't think we have any buyers agents agreements here though, so a buyer could just get another agent to send the offer if the original one won't.
No one, especially a real estate agent who is busy, wants to waste their energy and time on efforts that are going to go unrewarded. However, as an agent, all I can do is provide information that makes the buyer an informed buyer. I always have the option of not working with someone who insists on making stupid-low offers but I don't think I have ever opted out. My feeling is that you never know when a "low ball" offer is going to be accepted (I just had one close like that) so it is not a sure thing that an offer is "too low", and sometimes buyers will come around after losing several properties they wanted and start making more realistic offers.
I've wasted a bunch of time on people like this but they do pay off on occasion. BTW, it works both ways. I passed up an opportunity to list a property where the seller wanted a price that I was sure was too high and his reasoning was based on a number of wrong factors and his need to make a certain percent of profit. (He was an out-of-state investor.) Sure enough, another agent took it and it sold in less than a month and for close to the asking price. I taught myself a lesson there. You just never know.
Great response, especially the bolded part. Thanks
In Oregon, by law, the agent has to submit the offer.
Low ball offers are much more likely to be submitted by investors who know darn good and well what the market is. They submit a lot of offers and get some of them accepted. Agents who work with investors submit a lot of paperwork, but they can sell a lot of houses, too. The investor isn't buying one house every 15 years; he might be buying 4-5 houses a year.
As a buyer's agent, how do they usually handle a buyer who wants to submit extremely low, lowball offers on a house that is priced correctly or even on the low end of the comparables? Do the agents try to guide them to be more realistic or is the agent required to send in the offers no matter how low they are? Can the agents refuse to submit the offer?
I can only speak for myself but first, let's define lowball. To me a lowball is an offer that is 15-20% or more below market value and will more than likely just upset a seller.
If I have a buyer wanting a lowball I'll try to talk sense into them when we write it. If I know they'll be more reasonable and just looking for a starting point fine. I'll try it once with them. If they aren't realistic and want to just run around lowballing trying to find a deal and refusing to be realisic, then it's not worth my time. I'd fire that buyer because they'll just use my time and I would never actually get paid with them and if I did get paid it still wouldn't be enough to cover my time investment.
I can only speak for myself but first, let's define lowball. To me a lowball is an offer that is 15-20% or more below market value and will more than likely just upset a seller.
If I have a buyer wanting a lowball I'll try to talk sense into them when we write it. If I know they'll be more reasonable and just looking for a starting point fine. I'll try it once with them. If they aren't realistic and want to just run around lowballing trying to find a deal and refusing to be realisic, then it's not worth my time. I'd fire that buyer because they'll just use my time and I would never actually get paid with them and if I did get paid it still wouldn't be enough to cover my time investment.
I agree. A lowball is 15-20% below market value. 10% below asking isn't a lowball to me. Some sellers think $10k below asking on a $300,000 home is a lowball so it is a subjective term.
Legally in Oregon, if an agent has agreed to be a buyer agent for a client, then they must submit the offer their buyer wants to submit. I suppose they can refuse and terminate their agency relationship right there, but that seems like a good way to get a complaint filed against you. An agent should submit the low offer, do their best to negotiate it out, then terminate after that.
What you do practically depends on the buyer. Sometimes first time buyers need to throw out some low ball offers to understand that negotiations don't work that way. So that type of situation requires patience, and education to help them write low offers that are jumping off points to a good negotiation.
Investors throw out lots of low ball offers, knowing that 1 in 50 might actually stick. I don't work with clients like that because even with Docusign, it becomes too much work for the dollars involved in the sale.
Some buyers come from haggling cultures so they want to throw out very low offers because that is how it works from their native country. Again, this is a patience and education situation.
People who aren't investors that just want to lowball for the sake of lowballing hoping they get that great deal aren't my clients.
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