Lowball offers
Bankrate.com has a piece today about prospective homebuyers lowballing sellers and whether it's an effective negotiating strategy. (Even if interested buyers are scarce, a seller may react with anger rather than a counteroffer.)
One point, though it might seem a no-brainer, deserves highlighting:
If the seller wants to sell the property, every offer deserves a counteroffer, and if the buyer wants to purchase the property, every counteroffer merits consideration.
Buyers: Have you tried offering a lot less than the asking price, or do you just move on if the price isn't right? Sellers: How have you handled low offers?
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Comments
This piece talks about low-ball offers, but not astronomical asking prices. I continue to see houses with prices 20% above zillow estimates (which itself could be inflated). Obviously it's not a low ball offer if the price is inline with estimates.
I usually move on because most of the sellers in this area are still not understanding reality.
Posted by: Sean | May 1, 2008 10:43 AM
That's precisely the problem. I would offer a "low-ball" price, but only if the seller is in the ball park. The sellers today are dreaming (or hallucinating). If they can't be realistic, they can just stay in their houses. I'll find something else.
Posted by: Anon | May 1, 2008 12:00 PM
I have two properties on the market righht now.
One is in the sinking cesspool of SE Florida.
Can't even get a (qualified) low ball there.
The other is a nice house in a stable neighborhood here recently listed that we are offering well below the market comps because the home needs a fair bit of work in addition to the cosmetic and design issues most buyers in this area would do wherever they bought.
The agent also reports a couple of 'verbal offers' that were speculator low, but would have given a flipper enough incentive to do the work needed.
We have one serious offer that is in process (contractor repair quotes) and will probably go through at a modest discount off our asking price.
Cross your fingers ;)
Posted by: MrRational | May 1, 2008 5:48 PM
Having just searched for a house, I can assure you that many of these "lowball" offers are indeed reasonable. Many sellers still think it is a year and a half ago and their house is the Taj Mahal. We found numerous as is houses (we were looking for a diamond in the rough) that were above the Zillow estimates (which I think are too high based on my own house that we sold). They had been on the market for months and in some cases years with only minimal drops in prices. We found a few that were selling houses for the same price a larger house on a better lot and in better condition had sold for in recent months.
Sellers need to realize that a house is only worth what someone will pay for it. Being in a "good" school district and having four walls isn't enough anymore. People want value when they buy and are realizing that housing prices are way inflated. 100% growth in value in 4 years is absurd, especially when you haven't made even basic maintenance repairs.
AND, to sellers, clean up your house! Fix minor things like loose wires, landscape your yard, remove clutter, and stage your house.
Posted by: Jeff Martin | May 8, 2008 1:12 PM