Negotiating an offer to purchase - something that makes me want to shout "NO"

By
Real Estate Agent with Keller Williams Realty - Lakeside Market Center

The other day I was in a Macomb County MI real estate office
(I won't share which office) when I overheard a conversation
taking place by an agent and hisOne of the things that make me want to shout "NO" buyers (paraphrasing below):

Let's just write the offer and get it accepted.  We know it really doesn't stand a chance getting past the appraiser price wise, so at that point we'll just go back and tell the seller that they have to accept the appraised price.

It took all I could to not go into that adjoining conference room and give my 2 cents about this tactic. 

 



In my opinion I would not be representing my clients interests if we took this tactic for several reasons:
   First, my clients will be paying out of pocket for a home inspection and an appraisal.  Secondly, a seller never has to renegotiate a purchase price once it has been agreed upon.  They can walk away if an appraisal comes in lower than the contract price.

Setting up buyer clients to fail with their purchase is never a good business practice.   If a savvy investor wants to use this tactic then by all means, let it fly.  For first time home buyers I would never advocate for this.  Falling in love with a home and then losing it is too heartbreaking and frustrating for most home buyers.

My negotiating tactic?  (For some reason I don't like that word..but it fits in this scenario)  Education.   I research the heck out of a home and the location prior to my clients writing an offer.  We sit down and go over the recent sales of homes that are similar to the home that they wish to purchase.   In doing so my clients are able to make an educated decision about how much to offer for the home and be reasonably certain of being successful in their purchase.

No guess work.  No delay tactics (using an appraisal).   Just good old fashioned hard work for clients.

EDIT: Please read the comment section and specifically, Lenn Harleys comment that deals with conventional mortgages and another concern with this type of pre-purchase offer tactic.



Photo courtesy of BiscuitsMLP via Flickr Creative Commons Licensing

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  1. Donald Bradbury 03/01/2009 08:38 AM
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appraisals coming in low on a home purchase

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Anonymous #66
Anonymous
Anna Matsunaga

Wow, what did they propose to do if the appraisal came in @ offer price?

March 02, 2009 11:25 PM
Rainer
339,751
Kris Wales
Real Estate Blog & Homes for Sale search site, Macomb County MI
Keller Williams Realty - Lakeside Market Center

Anna, I don't know.  It would be interesting to find that out.

March 03, 2009 05:25 AM
Rainer
285,731
Diane Aurit
Lake Norman Real Estate
LKN Realty, LLC

Kris, Thank you for sharing this story...it is way too common these days.  I couldn't agree with you more.  All parties get hurt in this case.  That agent is one of the reasons why Realtor's suffer from a low level of respect.  Hopefully this market will weed agents like him out!  Your clients are so lucky to have you!

March 03, 2009 09:07 AM
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Erica Ramus
MRE, Schuylkill County PA Real Estate
Erica Ramus - Ramus Realty Group - Pottsville, PA

No seller rejected the offer with no counteroffer. Buyer walked.

March 03, 2009 06:54 PM
Rainer
339,751
Kris Wales
Real Estate Blog & Homes for Sale search site, Macomb County MI
Keller Williams Realty - Lakeside Market Center

Diane:   I hope there was sound reasoning behind this strategy, but I don't know that there was.

Erica:  Ouch for the sellers, but wise move by your buyers.

March 06, 2009 05:15 AM
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Rainer
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Kris Wales

Real Estate Blog & Homes for Sale search site, Macomb County MI
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