You Wanted To Lowball The Sellers. Don't Be Upset That You Didn't Get The House.

By
Real Estate Agent with Remerica Integrity, Realtors®, Northville, MI
http://actvra.in/xHv

You Wanted To Low-ball The Sellers. Don't Be Upset That You Didn't Get The House.

You've spent countless hours over many nights searching for properties on the Internet.

Finally, you have your list together. 147 houses. And you want to look at them all. In 2 days. Tomorrow and the next day.

What?

In today's market, 106 of them will be pending, meaning they have other accepted offers. Another 28 will be "short sales," and you already told me you don't want to wait that long.

Leaves us with 13 homes. My lucky number.

I schedule them, but in the morning my voice mail says that 4 of them went under contract over night. Down to 9.

Of the 9, 3 of them you don't even want to get out of the car for.

Down to 6.

We look at the 6 best homes on the market for you.

You like 1. Ready to put an offer in?

We go back to my office and while I'm running comps, you're talking about taking wallpaper down in the foyer and how many dogs will be awesome in the backyard.

I sit down with you, show you the comparables. They all point at you making an offer in the X price range.

Do you do that? Nope. You want to offer Y, which is about 20% BELOW market value. (notice how I used the letter "Y"?)

In goes the low-ball offer, almost immediately comes back an email saying that there are "multiple offers" and a form that asks if we want to keep our offer the same or change anything.

I remind you of the comps. You say "It's a buyers market! Besides, my Cousin's carpet guy got a house for blah, blah, blah."

Offer stays the same. You don't come close to getting it.

Don't blame the sellers. Don't blame the comps. And certainly don't blame me. Maybe next time you'll listen to a professional.

You Wanted To Low-ball The Sellers. Don't Be Upset That You Didn't Get The House.


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Re-Blogged 10 times:

Re-Blogged By Re-Blogged At
  1. Kim Carlson 03/21/2012 06:43 PM
  2. Rosemary Brooks 03/21/2012 07:07 PM
  3. Linda Lipscomb 03/21/2012 09:41 PM
  4. Joe Jackson 03/22/2012 12:16 AM
  5. Chuck Carstensen 03/22/2012 03:57 AM
  6. Debra B Albert,PA 03/22/2012 03:59 AM
  7. Carla Muss-Jacobs, Principal Broker/Owner 03/22/2012 11:00 AM
  8. Mike & Eve Alexander 03/22/2012 11:15 AM
  9. Debbie Walsh 03/24/2012 01:51 PM
  10. Elyse Berman, PA, ABR, GRI, Realtor 03/24/2012 06:39 PM
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Show All Comments
Rainmaker
1,245,735
Michelle Gibson
Hansen Real Estate Group Inc. - Wellington, FL
REALTOR

Eric - Two years ago I had several clients learn the hard way by losing a home, but thankfully I haven't had that lately.  Now I just have clients losing in a multiple offer situation and unfortumately most financed buyers can't compete with cash buyers and we have a ton of them.

Mar 23, 2012 07:10 AM #93
Rainmaker
235,873
Brad Rachielles
CENTURY 21 Prestige Properties, Ca BRE# 01489453 - Upland, CA
REALTOR, CDPE, Upland, CA

There is such a difference between making a competitively lower offer on an overpriced home, lowballing a seller and making a frivolous offer. As a REALTOR, I support competitive offers to help the buyer to get a realisitc value. I can even see a lowball offer on a hateful property that has been languishing for a long time, but I draw the line at frivolous offers. Certainly comps can verify that insincere offers just won't make it and are a waste of time.

Oh, I did see Charlie Dressen's video on this topic and recommend it. This is a very good post Eric.

Mar 23, 2012 09:18 AM #94
Rainer
42,219
Susan Kessler
American Allstar Realty - Phoenix, AZ

I had good success suggesting that the buyers compare the houses they had looked at to determine value rather than looking only at the list price and saying how much less should we offer.  (This method is similar to looking at sold comps, but better because they had physically seen the other active houses)  They put in an offer over list, but with an escalator clause stating that they would pay $1000 over the next best verified offer.  Of course, this does not work on REO listings but is good with a regular seller. They accepted this logic partly because they lost the first house they wanted and partly because they were here for only a few days.  Local buyers may not feel the pressure to get realistic quite a quickly.

Mar 23, 2012 10:45 AM #95
Rainmaker
541,032
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Phil, a couple of years ago this type of behaviour was only a little annoying.

Lisa, I guess buyers around here are slow learners.

K.C., I have the talk with every buyer right off the bat. Some listen, some don't.

LaNita, they're priced well, but the ones that are priced low, you better be ready to forget about what the listing says and go with the comps.

Loreena, of course you can! Let me know if you want me to call them and explain it in my own special way :)

Cheryl, absolutely it's their choice. It's also my choice whether or not to work with serious buyers or not, too.

Michael, it was a slight exaggeration to make a point.

Richard, inventory is getting scary low here, too!

Jared, frustrating is being nice.

Kevin, it seems that list price is only there these days so we know where to look for price ranges of homes.

Barbara, you're right! Even a list of 20-25 houses is too much!

Gita, you're welcome. Share away!

Scott, they lose the dream house and they compare every house after with it. If they'd just listen...

Ed, thanks. Same to you.

Vanessa, sure it adjusts, but I don't think it goes up and down daily. Markets ebb and flow, and we're ebbing and flowing into a sellers market!

Margie, yeah, but guess what? The bottom already happened. There was no way to know exactly when it hits until it's behind you.

Terry and Phil, yes. Everything is still "on sale," not on the "clearance" rack anymore.

Than, great point. When the stars line up and we agree with them, only then are we "knowledgable." haha

Charita, is should be real simple. I don't feel sorry for the buyers, either. I feel sorry for the agents who have to work even harder to make sure they get a house at all!

Derrick Team, I've yet to have a seller "take it." There's usually multiploe offers on homes like that.

Tonya, sometimes we end up beating our heads against that wall, too.

Dominique, the good deal is that most homes are about 40-50% off! They don't need to cut them by another 20%+

Mar 23, 2012 12:50 PM #96
Rainmaker
541,032
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Richie, you're right. You know what you qualify for, now get the house or move on. It's not a game (for most).

Barbara, read the comment I wrote right there ^^. Same exact thing.

Kristin, thanks! Glad you liked it!

Pamela, a low-ball offer isn't a realistic game plan for anyone, except maybe an investor. And that's only because they throw tons of offers around.

Larry, I think it's going to take longer than a few months to break that mindset.

Robin, that's the kep for everyone involved. Make the closing!

Mike, another perfect analogy.

Eve, thanks! Tell all your friends about it :)

Bill, you're right. Some don't.

Ginger, I'll give them the benefit of the doubt in the beginning, too. Once it's clear, it's time to cut bait.

Jane, I've had some that did listen to me right off. Next thing I know, they're asking me why they paid "so much" for their home? They talked to someone who "knows better."

Cameron, comps rule the real estate world right now.

MaryKay, but did you learn from it? That's the key!

Jane, how long will it take before the "media" starts telling everyone about the LOW INVENTORY and the appearance of a sellers market??

(nobody), the only way a low offer should be attempted is if the house has been on the market forever and/or it's a total dog.

Myrl, it depends on the list price if it'll be above it or not. List price seems to be a lost art form these days.

Jeanne, I don't have a crystal ball, but I can come pretty darn close to knowing what it's gonna take to get an offer accepted.

Bryan, exactly. I get some that've worked with another agent before me and the first thing they do is tell he how stupid the other agent was because they couldn't get their (low-ball) offer accepted!

John, no. I do not have to love them. And I don't. So there.

Erica, if they're priced right, they get multiple offers here.

Gretchen, I think it's gonna take the general public a while to figure this out.

Don, you got it.

Mike, 50k on a 249k house? Why wouldn't they get THAT one?!? haha

Joy, more often than not, I'll tell them there are multiple offers and their response is something like "That's okay. Leave it where it it. There's plenty of other homes if they don't want to take our offer." Ummmm, no, there AREN'T plenty of other homes!

Ed, they will eventually get it, but I don't want to look at more houses and put more offers together. Just be serious and let's get this done!

Michelle, cash buyers are everywhere! They're just running around buying everything up! It's amazing!

Brad, you said it perfectly. Why didn't you write this blog?

Susan, I love the idea of an escalation clause, but how do we truly know it's legit?

Mar 23, 2012 01:28 PM #97
Ambassador
1,294,452
Kathleen Daniels
KD Realty - 408.972.1822 - San Jose, CA
San Jose Homes for Sale - San Jose Probate Agent

Eric,  I only work with buyers by referral.  It has not always been that way ... it's just where my business is today.  Buyers must not only be qualified, they must be motivated.  If their motivation is low-balling offers ... it's not a buyer I choose to work with.  On the other hand ... as a listing agent, when buyers low-ball and the agent is upset that we did not counter their offer ... my response is typically ... we did not need to ... we have other offers that sellers were happy to accept.  Expecting a counter-offer is not a good strategy!

Mar 24, 2012 12:49 PM #98
Rainmaker
728,494
Debbie Walsh
Keller Williams Realty - Middletown, NY
Hudson Valley NY Real Estate 845.928.8000

Great post Eric.  I saw it on Carla's blog and I am here to reblog it too.  Congrats on the feature!

Mar 24, 2012 01:50 PM #99
Rainmaker
610,155
Don Sabinske
Don Sabinske, Sabinske & Associates Inc. - Zimmerman, MN
Sabinske & Associates Inc.

As Alan would say, "Holy Morklefeathers"!  Were you watching that same scenario as it unfolded it front of me last week?

Luckily, I took the bull by the horns and showed them three more properties, they picked one, and offered what I suggested, and they are now in the process of owning a home.

Mar 24, 2012 02:10 PM #100
Rainmaker
818,640
Paula McDonald
Chevaux Group, PLLC - The Woodlands, TX
CHEVAUX Group ~ The Woodlands, TX 936-203-0279
It is sort of like the doctor telling a patient what they need to do and that simply ignore it. Not ever a good thing.
Mar 24, 2012 02:16 PM #101
Rainmaker
488,619
Elyse Berman, PA, ABR, GRI, Realtor
Realty Associates Florida Properties, Boca Raton, FL - Boca Raton, FL
Boca Raton, Delray & Highland Beach- 561-716-7824

Eric,  I see this scenario play out all the time.  Inventory has gone down and the sellers are starting to play hardball and getting their prices, of course, depending on the community.  The low ballers are left out in the cold.  Reblogging.

Mar 24, 2012 06:36 PM #102
Rainer
91,167
Tanja Cisliek
Future Home Realty - Seminole, FL

OMG, Eric, you could have written this blog about my life on Thursday!! This is pretty much what happened to me, just with a condo versus a house in your story. I wished the media caught up with the current trend, real estate is yet again evolving, and clients are not caught up yet with their expectations!

Mar 24, 2012 07:27 PM #103
Rainmaker
682,187
Ruthmarie Hicks
Keller Williams NY Realty - 120 Bloomingdale Road #101, White Plains NY 10605 - White Plains, NY

I've had quite a few buyers like this lately that really don't "get" the market and think that prime properties are for sale for pennies on the dollar..That just doesn't work. 

Mar 25, 2012 01:16 PM #104
Rainmaker
541,032
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Kathleen, I'm still working on getting to the point where I'm working with a lot more listings and fewer, more serious buyers.

Debra, thanks! Glad you came over to comment.

Don, yes, I was watching you. I liked the way to took control of the situation and got things done.

Paula, yes. I bet it happens to doctors, just nowhere near as much as with us.

Elyse, sellers should be cautiously optimistic these days!

Tanja, you caught me. I changed it to a house so you wouldn't know I was writing about you and your condo deal.

Mar 25, 2012 01:55 PM #105
Rainmaker
541,032
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Ruthmarie, the phrase "pennies on the dollar" will haunt me forever. I'll write a blog about it one day.

Mar 25, 2012 01:56 PM #106
Ambassador
2,034,548
Todd Clark
Keller Williams Realty - Beaverton, OR
Broker - Beaverton, Oregon Real Estate Expert - (503) 524-9494

When this happens I quickly remind them that I told them what I thought they should offer "I do this everyday" and that they would have more than likely gotten their dream home had they listened to me. I give them one more chance and if they do it again, they are paying me a retainer fee for my services because clearly I'm not going to be helping them buy a home anytime soon.

 

Mar 25, 2012 07:36 PM #107
Rainmaker
391,565
Kristine Ginsberg
Morris County, NJ: Elite Staging and Redesign, LLC - Morris Plains, NJ
Morris County, NJ Stager

Everyone has a story of how they know someone who "stole" a house, blah, blah, blah and think it's acceptable to put in a lowball offer. They got what they deserved and missed out on a great home because they got greedy and thought it was just fine to insult the buyers, not listen to their professional Realtor and bid 20% below market value! Serves them right and hopefully they've learned their lesson!

Mar 26, 2012 11:28 AM #108
Rainmaker
541,032
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Todd, love the idea of a retainer fee if they're just going to keep playing some game.

Mar 26, 2012 11:44 AM #109
Rainmaker
661,558
Pacita Dimacali
Alain Pinel - Oakland, CA
Alameda/Contra Costa Counties CA

Eric

Congrats on the feature. You painted a scenario that gets played over and over again. But yet, people don't learn even when we tell them it's NOT a buyer's market. And if it had been one, it came and wen quickly (in my neck of the woods anyway).

You're right, maybe next time they'll listed to a real estate professional and not the cousin's carpet guy.

Mar 27, 2012 05:04 PM #110
Rainmaker
541,032
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Kristine, greed is a bad, bad thing.

Pacita, thanks. Hopefully the "expert" will be allowed his due next time.

Mar 27, 2012 06:54 PM #111
Rainmaker
541,032
Eric Michael
Remerica Integrity, Realtors®, Northville, MI - Livonia, MI
Metro Detroit Real Estate Professional 734.564.1519

Max, I agree with most of what you've said. I didn't say "some buyers are uneducated or ignorant." I do educate my buyers (and sellers) as much as possible and ultimately let them decide what they want to do. I'm on their side, period. If I feel that they're unrealistic or a waste of my time, I'll act accordingly.

Apr 19, 2012 05:46 PM #112
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Rainmaker
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Eric Michael

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