Low-ball Offers

[Eugene]

Amy, Zillow does not show a sale for that property (though maybe it’s not in the system yet), and it estimates that the house is worth $1,260k.

http://www.zillow.com/HomeDetails.htm?zprop=69018416

In Del Sur, houses of this size/caliber went for 500-600k in early 2000’s.

I wouldn’t assume that the house was really sold. Even if it was, I’d make a note of it and follow up in a year. Chances are it will be REO.

[Raybyrnes]

The whole low ball offer is in my opinion a complete waste of time. Unless you know that it is a distress sale ie. divorce you are not going to find a seller who is going to bite on this.

The only people who have access to these deals are bankers, attorneys, and a select few realators. So if you are not currently on the in, then you are wasting your time.

[NotCranky]

“The whole low ball offer is in my opinion a complete waste of time.”

What do you consider a low ball Ray?
The art and labor of low-balling are demanding but offering 10%-20% under asking is a valuable strategy, done properly. If I were buying now and at least until it becomes a “seller’s” market I would almost exclusively write offers with a target of 10%- 20% under comps . I agree that offering 30%-50% below is a waste of time. Most the time writing anything past 20% is too and sometimes it is just a waste of time to bid on a property even at list price . It is a matter having the pulse on the target area and type of property and taking worthwhile chances, realizing rejection(no response really) is the norm but good results can be had.

[amy]

Hi esmith,

that’s interesting about zillow. When I tried to look it up the property on zillowon Monday when it went off MLS, the image they showed was of cleared land, but no houses. How soon do offers/sales show up on zillow? And how did you get the image with the completed houses? I just tried it again this morning and got the same thing I always had….Getting this home for $600 would be great…I can dream, right?

[SD Realtor]

Amy obviously your realtor did not do much research on the home. That particular home was listed for sale back in October of 2006. It was listed for 1.295M-1.395M. The listing did not sell and expired in April of 07. The listing then went back on the market 2 months later in June of 07 at 1.429M! Currently the property has a Lis Pendens filed on it so that would need to be dealt with before anybody bought the home.

Anyways the listing has expired, the house is not in escrow.

SD Realtor

[34f3f3f]

We still have would-be sellers taking personal offense at offers to purchase because they’re too low. In effect, these people still blame the buyers for their problems and haven’t yet accepted the idea that their problem was their purchase, not their sale.

You just need to allow the market conditions to do the tenderizing for you. That way it’s not your fault they’re losing out. Once the sellers are softened up enough to cooperate they’ll sell.

By the same token, buyers can take offense at being asked to pay such high prices. I don’t see any harm in assisting the tenderizing process with low ball offers, and rubbing in a bit of salt for good measure. But perhaps, don’t make low ball offers to agents that you may want to work with down the line.

[amy]

Hi SD Realtor,
I did know the house was listed previously as I have been watching it for some time, but my realtor never said anything to me about it. What is a “Lis Pendens”? Interesting that the listing expired, not sold. Why wouldn’t the builder have renewed? And why would the second listing price have been higher? I see that occasionally, but it doesn’t make sense to me, considering the market (of course, I am not up on these strategies like so many on this site are – I am hoping to learn from you all).

[waterboy]

Lis Pendens means suit pending. Also the builder might have listed it higher in hopes of selling at that level to break even….if not maybe they just foreclose

[johnnyre]

hey lowball this http://www.sdlookup.com/MLS-076066162-1530_Kenalan_Dr_San_Diego_CA_92154

[SD Realtor]

Hi Amy –

As waterboy said there is a suit pending. A Lis Pendens can be filed against a property for many reasons, to long to go into here, but it does need to be resolved before title can be passed along. Why wouldn’t the builder renew? Again, lots of reasons, perhaps they want the Lis Pendens to get resolved, maybe they think they will sit out the fall and come back in the spring, maybe they want to do more work on it… Why would the second price be higher? Not sure… maybe they needed mo money out of it… maybe they had high demand….

I don’t have a clue about bonehead moves like that…but at least it is not in escrow!

SD Realtor

[lonestar2000]

Lowballing is like landscape painting, it is an art form that takes time, patience, and a whole lot of wasted canvases until you get it right.

The payoff may be worth while, but you will not get it after making just a few offers.

[Raybyrnes]

Rustico,

You have your RE license so you are eliminating a layer charges. You work for yourself in the industry and you are already 3% ahead of the next guy becasue you don’t have the transactional charge. Additionally this is what you spend your time doing so to drop a low ball offer doesn’t waste your time.

For me I am far too busy to go around wasting my time on low balls. By the time one comes in the time invested, even if it works does not off set the value of my own time.

It’s like this. I don’t waste my time haggling at the car dealerships. I ususally know what they cost, what I can afford, and what I want. When I get to the dealership I am there to buy and I will guarantee you that I am going to buy in the bottom 5% range.

If I were a trained mechanic I might do things differently. Just as if I were a well skilled Realator but thinking that your are going to continue to throw shit at the wall and see what sticks. Sorry I just don’t think this is an effective strategy. Good luck to those who have more time on there hands.

[NotCranky]

Yes Ray you are right about a lot of that. Don’t get the impression I just scroll throught the MLS and throw out “shitty” offers.I set my parameters and work vey hard to meet or beat them and price is really a small part of it. You are right though, a RE licensee has some advantages. Being a general contractor helps too.

[Blissful Ignoramus]

hey lowball this http://www.sdlookup.com/MLS-076066162-1530_Kenalan_Dr_San_Diego_CA_92154

400 tablets of Sudafed and a teal 1996 Chevy Cavalier?

[Raybyrnes]

Rustico,

For you a low ball might be OK. For the aerage person who is looking for a first home my advice would be to focus on your carreer so that you can build saving and increase earning potential. Second eliminate waste. Spend 10 Minute s in the sunday paper cutting a coupon or 2. Thinking that there is some Magic Fairly powdder taht is going to allow you to pick up a home ion La Jolla for 300 K is a pipe dream.

My guess is that by the time home prices do come down interest rate will have adjsuted upward. Net result, I save on the taxes but I end up with a similiar monthly payment. Then I wait for rates to come down and refinance and the cycle starts over again.

I see your point I hope you can see mine.

[Author]

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