I am not a big fan of the lowball offer, but what if it gets accepted?

By
Real Estate Agent with Keller Williams Realty

Photo courtesy of svilen001I presently have 7 short sales listings in my listing inventory and I'm not a big fan of the person that comes in within one week of the home being on the market and writing an offer for 40-50% of the loan amount.

The fact is, when a buyer calls on one of these short sale properties, I refer them to another agent in my office as I don't like to work both ends of the transaction. I don't feel I can be fair to all parties involved with all the work that is involved in a short sale.

But, what happens when this buyer comes back with the agent I referred them to and puts that offer at 50% of the amount left on the loan? Is my buyer insulted or do they just say I'm going to lose this home anyway and they want to sign the offer and let the bank decide?

Now, from my point of view it is a great thing to have an offer on the property, because it now gets a negotiator assigned and we can start the ball rolling on this property and hopefully get a better offer on the property that is better for the bank and the community as a whole. Selling a property a 50% of the loan amount doesn't help comps in a neighborhood.

As time goes along you see that the auction date is now been announced and you still have 5 months before that date arrives, but the next day you get an e-mail saying they are accepting the buyer's offer. WHAT? That was a joke, are you really serious?

Now, my seller would be happy because they have no foreclosure on their record and their lawyer is making sure they don't get a 1099 at the end of the year and the buyer is happy they are getting a great deal, but I'm still sad for the community and the United States tax payer.

The community now will have another home that brings down the comps for the area and the bank will have a loss that they will take to the government for more of our money as part of the bailout. Sometimes, I have to wonder what the banks are thinking, but at the same time, I can't blame these people that put these offers in knowing that sometimes, they may just get them.



Todd Clark - broker
Kastings & Associates
Phone: (503)524-9494
Fax: (503)622-8739

Posted by


Todd Clark (broker w/ Ken's Home Team)
Keller Williams Realty
Todd@IFoundYourNewHome.com
Phone: (503)524-9494
Fax: (503)746-9573

 

 

 

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 I am a licensed Realtor who specializes in Washington County, Oregon and also work in both Clackamas and Multnomah Counties including the cities of Aloha, Beaverton, Canby, Clackamas, Gladstone, Gresham, Happy Valley, Hillsboro, Milwaukie, Oregon City, Sherwood and Tigard. All information contained in these posts are copyrighted and cannot be used without prior written approval authorization from the author me Todd Clark. If you are looking for an outstanding agent please give me a call I would love to help you with all your real estate needs.

 

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Topic:
Real Estate General Information
Location:
Oregon Washington County Beaverton
Groups:
Addicted to Active Rain
Almost Anything Goes
Diary of a Realtor
ETHICS and the REALTOR
Investing in Real Estate
Tags:
lowball offers
accepted
banks
community
buyers
sellers
investors
deals
foreclosures
short sales

Comments 126 New Comment

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Todd Clark
Broker - Beaverton, Oregon Real Estate Expert - (503) 524-9494
Keller Williams Realty

Cameron - The sad part is the loss mitigation departments don't seem to be getting that point that they would be better off accepting the offers presented instead of foreclosing on the property.

Pam - That is what I'm talking about, the glut of homes that are short sales and REOs are affecting overall prices no matter what is being said by appraisers. If someone has to sell, they need to lower their price to compete with these sales.

James - I know your pain, I've had one in since September 1st and they are still jerking the buyer and seller around.

Jennifer - I really think it maybe a win for the buyer and the Realtors. OK, maybe the seller also.

Dean - I think it should be our decision as to the impact to the tax payer, heck I am a tax payer and I voted these idiots in and I plan to vote them out!

February 19, 2009 09:09 AM
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Todd Clark
Broker - Beaverton, Oregon Real Estate Expert - (503) 524-9494
Keller Williams Realty

Billie - Go love your man and don't worry about reading past the headlines, that is all that is really important anyway.

Simon - You may want to read the contracts that some of these banks are sending to the closing table. They are writing in things like the seller agrees to pay back the deficiency sometime in the future at a point the bank chooses. Basically they are trying to get sellers to sign contracts at the closing table... So watch yourself and I would have them give the contract to a lawyer or they may get a big surprise in a few years.

Christianne - I didn't even think of that. The local schools here get most of their money from our property tax and if that goes down, so will the state budget and we all know who they want to cut first.

Ross - Seems this one wasn't, but on a whole you are correct.

Mike - I'm with you as an investor, but I still see my own property go down in value. I've watched my own home go down in value by $40,000 in the last two years because of short sales and foreclosures in the neighborhood. Each area is different here and some areas aren't hit as bad, but I'm not prepared to buy 4 or 5 more homes in my neighborhood.

Regina - It does seem weird that they act like that, you would think they would want to get rid of these problem loans and homes as quickly as possible.

February 19, 2009 06:20 PM
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Todd Clark
Broker - Beaverton, Oregon Real Estate Expert - (503) 524-9494
Keller Williams Realty

Stephanie - In this area that this home is located it didn't take a bad as hit as other areas of Portland, but I do agree with what you said about what the bank will accept. But, this time they did accept an offer at 54% of today's value and half of the loan amount due. It is also not an FHA or VA loan, the bank couldn't sell this loan apparently.

Scott - By duties are to whom ever I have a signature from at the bottom of my contract. Be it the buyer or the seller, I will represent them to the fullest, I just saying!

Diane - I agree it certainly is a big mess right now! At least the president seems to be trying to do something, will it work is the big question.

Brian - That was what was so surprising on this one, the bank accepted the offer and actually pretty quickly, I was really really surprised at that more than the price accepted.

Dawn - I react the same to any offer on any of my listings... "Is this your highest and best offer?"

February 20, 2009 05:28 PM
Rainer
30,303
matt mathews
mathews Realty Group

Got to say that here in Socal-Inland Empire to be exact, 50% below loan amount is right where the market is!  My last Property had a 1st @ $450K and a 2nd @ $53K.  Offer got accepted at full appraised value = $274,900.  The sad thing is, another home just sold in same neighborhood for $259,900.  What would you consider a low ball offer on those two properties??   

February 23, 2009 06:39 PM
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Todd Clark
Broker - Beaverton, Oregon Real Estate Expert - (503) 524-9494
Keller Williams Realty

Matt - In your case I would say that an offer for $160,000 would have been what I consider a lowball offer. From talking to others about your situation in your area, I think the market just stalled and then the prices started to drop and then in just snowballed.

I am hoping we don't have a repeat of that here in the next 6 months to a year. Thanks for your question it is a valid one as each market is differnt.

 

 

February 23, 2009 06:48 PM
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Todd Clark

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