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June 7, 2009

Real estate poll: Low-low offers

Homebuyers got a chance to weigh in on their price expectations via poll last week. Now it's your turn, sellers and future sellers.

Let us know: What's your policy about how to respond to significantly low offers? To "lowball," according to Merriam-Webster, is "to give a markedly or unfairly low offer." In this market, that seems to be in the eye of the beholder -- one person's "unfairly low" is another person's "just right."

So for purposes of this poll, let's say an offer that's at least 15 percent below your asking price. A $255,000 offer for a house on the market for $300,000, for instance.

Posted by Jamie Smith Hopkins at 1:40 PM | | Comments (8)
Categories: Polls
        

Comments

You missed at least one option in your poll. I had irrational sellers counter with a price raise. At the time the house had been on the market over a year. They did me a favor, I'm very happy we did not buy.

Holy cow -- that never occurred to me as an option. But that's what the "other" choice is there for: things that would never occur to me.

I believe the general thinking behind a low-ball offer is to encourage the seller to come back with their bottom line or near bottom price. It saves time and energy and both the buyer and seller can move on quickly to the next property or buyer. Although it's hard to put emotions aside, it's best to try to focus on the business proposition and negotiations versus the perception that an offer is "unfair"or even considered an insult.

If you are not insulting the seller, then you are overbidding. The tables have turned.

Defining "low ball" as some rather significant percentage below the asking price (such as the 15% you suggested, in initiating this poll) is not useful. It's impossible to say an offer is "low ball" at a certain percentage when realtors and sellers are still pricing at points distinctly "high ball". Until we get to fair market value list prices, I contend nothing is "low ball". My definition of fair market value, for example, is 3-5% above 2001 prices.

But, MET, I brought up the phrase "lowball" specifically to point out that it's not a useful phrase.

I'm not defining lowball as 15 percent lower than asking price. I'm asking sellers and would-be sellers how they'd react to an offer at least 15 percent lower than their asking price.

I think MET has correctly defined where the debate should be.

Well, my agent put in a verbal "low" offer (cuz you know, she didn't want to do all the paperwork for something that she didn't think had a chance) and what we got was more like BR described - a response of "we won't go any lower than..."

Then again, 6 weeks later, they did "go lower than..." but that's how this market's been playing out, and how it's played out in times past. So from a buyer vantage, MET is spot on.

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About Jamie Smith Hopkins
Jamie Smith Hopkins, a Baltimore Sun reporter since 1999, writes about the regional economy. Her reporting on the housing market has won national and local awards. Hopkins is a Columbia native and has lived in Maryland all her life, save for 10 months spent covering schools in Ames, Iowa.
She trained to become a wonk by spending large chunks of time as a geek and an insufferable know-it-all.
Baltimore Sun articles by Jamie
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