Don’t let a low ball put you behind the eight ball
January 3rd, 2008 - Categories: Selling a home in the Dothan area
By: Charles Woodall
Managing Broker
http://www.dothanhomesearch.com
I was over at my brother’s house just before Christmas helping put a trampoline together for my niece. His neighbor, who has her house on the market, came over to check out what we were doing. Without knowing me or what business I am in, she starts talking about a recent offer that was presented to her by her agent. From what I was able to put together, the offer was not just lower, it was substantially lower (a ?low ball? in real estate vernacular) than her list price, so she instructed her agent to reject the offer outright, and admonished her “friend” the agent for bringing her something so ridiculous. She basically blamed her agent for the low offer.
I haven’t done a market analysis on this particular house, and I haven’t been inside of it to know what condition it is in. I do know that the current list price does not at first glance look to be far out of line. So why did she get such a low offer? Simple economics. There were three sales in this area of Dothan in the last three months, and there are currently six houses for sale in the same area. Why wouldn’t a buyer, with ample supply to choose from, look for a bargain?
I never let on to this lady that I was in the real estate business, as she wasn’t really talking to me anyway. There will be a time and place for that. My unsolicited advice would be to never outright reject any offer. At a minimum, make a counter offer at or near full price to determine the motivation of the buyer. You just might be suprised when you find out that really want this house above the other five, and they would have bought with just a little negotiation.
What is a seller to do to combat these low offers? We’ve talked about it before here, here, and here. It never hurts to go back and re-read. Let us know your experience with low offers by commenting below!
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This entry was posted on Thursday, January 3rd, 2008 at 12:37 pm and is filed under Selling a home in the Dothan area. You can follow any responses to this entry through the RSS 2.0 feed. You can leave a response, or trackback from your own site.
I try to prepare sellers ahead of time for lowball offers. Too often, they take it as a personal insult to the home they love. I have always recommended a counteroffer, as you mentioned. I was in a class recently where the instructor recommended saying “No” to lowball offers, and leaving the ball in the buyers court. She said this often takes them by surprise and they end up submitting a better offer. Haven’t tried it myself.
We too have had the same scenarios here in Port Orange FL! Some of our sellers have been so angered over lowball offers that they counter their original asking price. We try to find out why the buyer is interested and why the offer is low if we have the property priced right.
Also if the offer is far below what the seller can accept, we suggest that our sellers make a prompt counteroffer anyway and not counter with their lowest acceptable price.
You certainly have to work with any offer you can get in this market. Just the fact that someone wants your home is a big first step. The next step is to back up your asking price with pertinent market data in a counter-offer. Many low-ballers just throw an offer out there to see where the seller stands. Sellers and their agents need to show that the price of the property is fair as compared to what others have recently paid for similar homes, and what’s available as an alternative. Many buyers, along with their agents, just don’t do their homework!
Lots of low offers in Crofton, Maryland, too. In the end, however, sale prices aren’t down that much from last year. I think buyers feel like they’re expected to make a low offer - any seller who gets one and doesn’t counter-offer is making a mistake, in my opinion.
All the buyers in today’s market are looking for “a deal.” It’s too bad they don’t realize that a “low ball” offer is insulting to a seller that prices his or her home to sell. Instead of the seller now working in good faith to make a reasonable counter offer so that you can ultimately reach something everyone can live with, they tend to counter at a higher price, just because their emotion has taken over.
I have no problem in telling my buyers they are making too low an offer and what I expect the counter to be and they- the buyer have to decide what final price they want to buy their new home for.
It seems that low ball offers are coming in all over the country. We just had one in Madison, NJ and it proved to be a buyer “just fishing.” One week later another “very” low offer came through and alas, we started negotiating and eventually we came to an agreement.
As realtors in this crazy market, we need to help our sellers realize that homes that are priced well…will indeed sell. The minute their home goes on the market they need to detach a bit and make a business decision devoid of emotion. Buyers are poised to come in low…the seller’s don’t have to take it…but a reasonable counter helps the process along.
You make a great point Perri. We as REALTORS have to help sellers remove the emotion and not be offended by these low offers. If we are successful at doing that, then the process will go a lot smoother.
you should be ashamed of yourself for encouraging your niece to play on a trampoline. those are death traps. i hope she doesn’t break her neck.