My Customer Lost Money Due to Her LOWBALL!

By
Real Estate Agent with Coldwell Banker Residential Brokerage 0458038

Unless you can justify a lowball offer, it's just a lose/lose to everyone.

My customer just learned this lesson to the tune of $10,000 because she listened to her well meaning friends who consider themselves real estate experts, as opposed to me, someone who assists folks in buying and selling homes 24/7.

Beautiful home with a great addition, priced a bit high but not by much.  On the market about 30 days.  Her friends insist we start exceptionally low for that house. I suggested higher and explain how a lowball offer can jeopardize negotiations. 

I present the offer.  The homeowners are lovely but reasonably put off.  Move forward a very sloooow week and we arrive at a price and go into attorney review; at one point we were at a stalemate over $5,000.

ANOTHER OFFER COMES IN $10,000 HIGHER, JUST AS WE WRAP UP AND GO INTO ATTORNEY REVIEW.  No lowball, no nonsense.  The other party wanted this house and provided excellent terms as well.  Now my client has a decision to make. Come up or walk away.

She has decided to come up.  BUT...HAD SHE COME IN AT A REASONABLE NUMBER TO START, SHE COULD HAVE WRAPPED HER DEAL UP MUCH LOWER. 

What have your experiences been with lowball offers, either writing them or making them as a buyer?  The tactic would work well undoubtedly when pursuing an investment property, as even the market for investors may be slightly smaller than your single family home buyer.  If you're not living there, it's easy to walk away.  

So when will a lowball offer work? 

  • When it's obvious the home is overpriced.  Your real estate agent should provide comps on recent sales going back six months.  The real estate agent you're working with SHOULD BE familiar enough with the area and the inventory to make that determination also. 
  • When the home has been on the market at least 60 days.  Don't bother lowballing a home that's just been listed.  The possibilities are strong in everyone's mind (and rightfully so) that someone else will offer more money.  Don't just go by the days on the market listed; a real estate agent should search the MLS by ADDRESS to see if the home has been listed before or not.
  • When you're offering CASH.  No mortgage contingencies can be a very strong motivator these days.  Let the home sit a bit if days on the market haven't accumulated sufficiently, but a cash offer is hard to turn down these days.

The feedback would be interesting; please share how your "lowballs" have panned out.

Posted by

 

"Antoinette" Scognamiglio (licensed as Maria), Sales Associate, Coldwell Banker Residential Brokerage, Route 46W & Crane Road,  Mountain Lakes, NJ 07046.  Cell Phone: 201.240.8699.  Email: AntoinetteSellsNJ@gmail.com.

Are you considering purchasing or selling a home in Morris, Sussex, Passaic or Northern Bergen County?  I specialize in those territories, with expertise in Lakefront property.  As a relocation specialist, I take exceptional care in assisting my clients in finding their new home and community.  Certified as an Accredited Staging Professional, I work with my home seller clients to ensure their home offers the highest level of appeal to buyers (and Realtors®!).  Please visit my website to learn more about my philosophy in conducting real estate business. 

(C) Antoinette Scognamiglio, 2014. All Rights Reserved.

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Patricia Kennedy
Evers & Company Real Estate, Inc. - Washington, DC
For Your Home in the Capital

Antoinette, this is a hard lesson for buyers to learn.  And a lot of the time, the sellers are so sick of you that when another offer comes in, they just take it!  She's lucky she didn't lose the place.

Feb 22, 2009 09:24 PM #1
Rainmaker
219,939
Antoinette Scognamiglio
Coldwell Banker Residential Brokerage - Mountain Lakes, NJ
GRI, ASP - Homes for Sale - Jefferson Township NJ

Patricia, you're entirely correct and I told my buyer how lucky she was that the seller's didn't take the "highest and best route."  They were very direct with her and respected the fact she came in first.  That DIDN'T have to happen!  Ugh!  Thanks for your comment!

Feb 22, 2009 09:39 PM #2
Rainer
128,997
Justin Ukaoma
Vizion KC - Kansas City, MO
Kansas City Real Estate Investments

People can be so silly sometimes.  I submit a lot of low ball offers on investment properties but that's about it.  If I'm working with a buyer I always insist we make a real offer.  Your client was very lucky.  In my experience most sellers would have just gone for the higher offer in a heartbeat.

Feb 22, 2009 10:51 PM #3
Rainmaker
219,939
Antoinette Scognamiglio
Coldwell Banker Residential Brokerage - Mountain Lakes, NJ
GRI, ASP - Homes for Sale - Jefferson Township NJ

Justin, thanks for your feedback.  Investment properties are a great lowball venue.  You're not living there; if you don't get the property, who cares.  On to the next one.  Yes, she was lucky.  Another tale to share, if anyone will listen!

Feb 23, 2009 08:22 AM #4
Anonymous
Jane Johnson

We recently moved to the Peaks from WV.  When selling our home there, we received a very LOW offer from a prospective buyer.  We, of course, declined, even though our home had been on the market for about four months.   We later received a very respectable offer, and the "lowballers"tried another offer, too.  There was no hesitation on our decision to not even THINK about accepting the "lowballer's" reasonable offer.  They definitely left a bad taste in our mouths!

 

Love your website, too. 

Mar 03, 2009 09:15 PM #5
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Rainmaker
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Antoinette Scognamiglio

GRI, ASP - Homes for Sale - Jefferson Township NJ
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