Does My Seller Care what Your Buyer Can Afford?

By
Real Estate Agent with Donna Homes, PLR 0480809

 As a listing agent, when I have a listing priced at $182,000, why do I care that the buyer only wants to pay $165,000 for a house?  I had a listing that closed a couple of weeks ago, but negotiations were a little difficult.  We were listed at a very competitive $182k for a 2700 sqft home built in 2002.  I know buyers in many parts of the country are drooling over that price!

I get a call from a buyers' agent asking if my seller would take $165k.  I tell her she can write up an offer and I'll present it, but that it seems pretty low for this house and not sure how the seller would react to it.  Of course I knew how the seller would react because I prepare my sellers at our initial listing appointment.  I run through several scenarios with my sellers so they know what to expect, the good and the bad.

She continues to tell me that her buyers are already approved to $169k, but only feel comfortable staying around $165k, oh, and they'll need closing costs.  It's like she's trying really hard for me to discuss confidential information about my seller to see if he'll take less, but I never fall for it.  I again tell her to send me an offer.  So, I let my seller know about the conversation.  By the way, the house was only on the market about 6 weeks.

 I end up getting an offer the next day for $169k with no closing costs.  Great, it's better than she said it would be.  We countered it back since it was still fairly low.  The buyers' agent is very upset that we countered and reiterated that her buyers' comfort level was only $165k and by submitting the offer at $169k with no closing costs, that they were serious about the house.

"I'm sorry, but what part of your buyers wanting to pay $165k has to do with my seller listed at $182k?  Why are you showing your buyers houses that they can't afford?" 

"Well, it's a buyers' market and my buyers thought your seller would be excited to receive an offer."
It's been 6 weeks, not 6 months... "Umm, what market do you typically work in that it's a "Buyers'" market?"

For people across the country who are in buyers' markets, we're not in Dallas.  Yes, we have a lot of inventory, but in most areas, houses are selling about 97-98% of asking price, and some individual communities are selling at a full 100%.

I looked up the agent in the MLS.  She has sold only a handful of houses in the past couple of years.  Great, another agent who "dabbles" in real estate as a hobby.  Just so you know, my seller sold for a very nice price at 98.11% of asking price, and the buyers' comfort level increased when another offer was on its way.

Remember, I work all of North Dallas County and Collin County including Richardson, Plano, Allen, Frisco, Carrollton, Garland, Rowlett, McKinney, etc... my car will take us anywhere you need to go!! 

 ARE YOU PACKED YET?!

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Rainer
3,043
Stephanie Fischer
Lewis and Clark Realty Inc. West - Yankton, SD

Donna:

I love how you handled yourself in this situation.  You never forgot who was in control and best of all you represented your clients just the way you should have.  Its funny how the comfort level can suddenly change....:-)

Apr 10, 2008 12:34 PM #1
Rainer
56,353
Peter Nikic
Broad & Bailey Realty LLC - Valhalla, NY

I think you did the right thing. You represent the seller, which means any information you get from the buyer or buyers agent is not necessarily accurate. The buyers agent probably knew that the buyer could do 182K, but wanted to make you think that it was 165K so they could get a better deal.

Good job.

Apr 10, 2008 12:35 PM #2
Rainmaker
281,780
Jerry Murphy
Long Real Estate - Anthem, AZ
Anthem AZ Real Estate

Hi Donna,

We feel your pain out here in Phoenix, only in a different sense.  Buyers who are lowballing already low ball listed prices (ie. REO's) and then getting perturbed that the bank did not accept 60% of their asking price, on a price that was already about 60% of the market value.  Oh how I long for this market to return to normal.  Best of luck.

Apr 10, 2008 12:35 PM #3
Rainmaker
526,226
Shirley Parks
Sands Realty 210-414-0966 - San Antonio, TX
Broker, 210-414-0966, San Antonio TX Homes
You were right and it sounds like you handled it beautifully.
Apr 10, 2008 10:22 PM #4
Rainmaker
107,450
Jill Wente
Better Homes and Gardens Real Estate | Gary Greene, Realtors - Spring, TX
Spring TX Real Estate

I represent a lot of sellers and I hear that from other buyer's agents stating the buyer only feels comfortable for their budget of paying $x.xx.  What should what the buyer feels comfortable budgeting for matter to my seller? It should not and it does not. The buyer is responsible for their budget not the seller. Its a silly negotiating statement.

Apr 11, 2008 01:04 PM #5
Ambassador
897,445
Missy Caulk
Missy Caulk TEAM - Ann Arbor, MI
Realtor - Ann Arbor Real Estate

I have said the same thing to Realtors, why are you showing this house when it is already 115K below what they paid, we are at rock bottom and you bring me an offer at 320 with 3% in closing costs. It made me sick to have to call my seller in NY. But, I did and we countered back very well. Now she says they don't want to pay that much. THEN STOP SHOWING HOUSES FOR THIS MUCH !! 

Sorry I'm just ticked at Realtors right now !  

Apr 11, 2008 04:59 PM #6
Rainmaker
67,820
Denise Allen
Resh Realty Group - Chesapeake, VA
Realtor@ Chesapeake, Hampton Roads
Of course there are the sellers who wished they would have sold their home a year ago when that offer came in because they are still there.
Apr 11, 2008 06:46 PM #7
Rainmaker
25,776
Leonard Thomas
RE/MAX Dallas Suburbs - Richardson, TX
Donna, you handled that like a pro and you brought up a very important tactic in negotiation - "know thy opposing Realtor"!  It never hurts to check out the other Realtor's production and current activity in the MLS - it can give you lots of information to help serve your clients' best interests.  Bravo!
Apr 13, 2008 10:36 PM #8
Rainmaker
964,442
Greg Nino
RE/MAX Compass, formerly RE/MAX WHP - Houston, TX
Houston, Texas

Donna,

She sounded wet behind the ears from the beginning. The verbal offers really get under my skin. If you want to be taken seriously - PUT IT IN WRITING! A buyers mkt doesn't increase equity! I had a seller priced at 279k who received an offer for 250k. He was so annoyed he directed me to counter to 278,000. I think the buyer's agent got the point. I always look up the other agent before negotiations. I find it critical to better understand who I'm working with. Babysit or worry less transaction?

Apr 22, 2008 11:16 PM #9
Rainer
100,660
Cheri Smith
Prudential Gary Greene, Cypress TX - Cypress, TX
Realtor Prudential Gary Greene

Donna, I feel like I am spending more money than I make at this point. Why? Because I seem to get the people that think they are going to a flea market when purchasing real estate.

They think sellers are desperate. So they think sellers will haggle with them like its a lamp they are buying. Listed at $200,000, we will offer $150,000 and see if they meet us somwhere in the middle. lol.Who cares if it is priced right.

 You can show them comps, you can show them appraisals and they still don't get it.

I don't know if your agent was the problem or the buyer was the problem. Maybe both. Sounds like both.

I have no patience for some buyers these days. I have even less for the agents I am meeting.

 

 

 

Apr 23, 2008 09:44 AM #10
Rainer
75,570
Frank Schulte-Ladbeck
Frank Schulte-Ladbeck Professional Real Estate Inspections - Houston, TX
Donna, I was watching the data for Houston, and even the Realtor Association was hinting that we are heading towards a buyer's market. My neighbor listed her house for what she considered a fair price with her Realtor. She came to talk to me about it, and I repeated the data that I had heard. I told her that I just did not know what circumstances she would find. Within three weeks she obtained an offer slightly below her asking price. I decided to look closely at my subdivision. Homes listed with a Realtor sold within a month, while FSBO are still on the market after six months. We are actually doing better than the city numbers in this one spot. It goes to show you that even neighborhoods could be different than other areas in town.
Apr 23, 2008 10:54 AM #11
Rainmaker
31,102
Tom Ikonomou
Best-West Realty Ltd. - Kamloops, BC
Kamloops B.C Real Estate (250-318-0479)

Don't you hate it when you have to S.P.E.L.L  I.T  O.U.T  ?

Apr 23, 2008 12:03 PM #12
Anonymous
Anonymous
Anonymous
Donna, you already asked the question, but it deserves a repeat..."Why is the agent showing homes out of the buyer's price range?"  For my buyers I do look at listings that have been on the market for a looooong time to see if it's feasible to bring in a lower offer, but I am cautious about it....and I do my research with comps.  I know I have to represent my client but it's also my reputation on the line so I make things very clear with my clients about what to expect if they want to bring a low-ball offer ~ which is usually a seller that won't even consider a counter. 
Apr 23, 2008 12:17 PM #13
Rainmaker
1,386,226
Donna Harris
Donna Homes, PLR - Austin, TX
Realtor, CDPE & ASP - Hill Country Lakeway Austin

It looks like I haven't been responding to people, but at one point, this blog reproduced itself and I had been putting all the responses there. Now, this version has popped up again, so I'll start responding on this one instead of the other one.

Joddie, Exactly!  And I ask that question all the time.

Tom, I missed it.  Can you R E P E A T that please?!

Frank, I believe FSBOs are always on the market longer because the consumer has started to realize that going directly to a seller without representation is going to be a headache and they are probably watching a lot of Judge Judy and wanting to stay out of court!

Cheri, I get those buyers too.  It gets easier when they lose a couple of houses, and then they get really serious when they really don't want to lose the house.

Greg, I don't like verbal offers either, but she was only doing what the "National" news tells a buyer to have their agent do which is try to gather as much of the confidential information as possible.  I can't fault her for trying, but my lips are tight when it comes to sellers' motivations for selling.

Apr 24, 2008 11:48 AM #14
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Rainmaker
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Donna Harris

Realtor, CDPE & ASP - Hill Country Lakeway Austin
Are you Packed for Austin? I can help!!
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