lowballing

[Peace]

A friend just made an offer of $400,000 on an asking price of $450,000 (for a second home).

The seller’s realtor said that she thought the sellers would be insulted by the offer and wouldn’t even counter. My friend said to tell the sellers not to bother to counter because she knew her budget and that was the the most she would pay.

Friend’s realtor asked her if there was any negotiating room and my friend said “yes – if the sellers wanted to take the furniture that was fine because she didn’t give a shit about the furniture” but she would lower her offer to $395,000

Now things really are getting back to normal!

[yooklid]

How long before they’ll be wishing they took the 400? Before the 395 seems like wishful thinking?

[Peace]

Oh yeah, I should have added that the place is being sold furnished.

[PerryChase]

Let us know how it goes.
Perhaps you could track that listing and see what (and if) it eventually sells at. That would be a good reference point as to how the market in doing in that neighborhood.

If it were me, I’d have low-balled at $350k. If the seller really thinks that his house is worth $450k, let him sell it to someone else at that price and have the last laugh. Why get insulted if you know you’ll have money in the bank? The sellers who get insulted by a low-ball offers are the desperate ones.

[speedingpullet]

Yes, it would be interesting to see what the last selling price was. Or even what they’re paying in property tax…

Its always astonishing that anyone could be ‘insulted’ by making 200% profit over the space of 5 years. Or, at least, trying to.

[Chrispy]

It is a Realtor’s fiduciary duty to present all offers, regardless of how well she/he thinks they will go over. I think a lot of agents want to “pump up the volume” (of both their commissions and their reputations) and try to shame the buyer into offering more.

I read on another board that the serious bargain shoppers are presenting five low-ball offers to five sellers and letting each one know that the lowest acceptance price will get the business. And, all offers expire in 48 hours.

Nice switch on the old “seller is entertaining offers” line of crap so pervasive just a year ago.

[salo_t]

For the last couple of months I have been submitting lowball
offers. I usually look at the tax records and see if they are even able to go down in price (some just owe too much money) Then I do the math and figure what that place would rent for and come up with an amount. Usually its at least 100k off the asking price. One thing I see happening when I submit these low offers is that they put them in a pending status or just take them off the market all together. One condo I sent an offer to is still pending after two months. The agent sent me a nasty voice message and said that she got a full price offer.
Actually I’m seeing prices drop so fast now that I stopped with the offers. I’m just saving money and waiting until next year.

[waiting hawk]

I got it made because my realtor is a renter also. He don’t care what he submits. I told him, “I’M INSULTED BY THEIR LISTING, so why not insult with the offer. A cabin in Lake Arrowhead was 340k reduced to 250k. I submited 150k. They countered with 249k. I countered with 149k. It’s wake up time sellers. I’ll go right to the other tons of for sale signs and throw offers. Or wait. Either way I win. Its funny that the prices/comps come down and there is nothing people can do about it.

My website tracking Temecula and South Riverside County

[no_such_reality]

WH, that’s just mean. Must be why I love it.

I’ve been thinking while I look at all the homes in my neighborhood, that several of them would be good homes, once they get back to half their current price.

Maybe I should just get off my butt, and put the offer in now for the price I’ll be able to buy it for in 2009 or 2010 before they have a chance to trash the house.

[an]

That’s exactly what I’m doing too. I keep track of houses I would like to buy and seller saying they’re motivated, I ask my realtor to put in a verbal offer for the price I want to pay, regardless of the listing price. So far, no bite, but as things get desperate, maybe I’ll catch a good deal and not have to wait so long.

[BradPitt]

Good luck on your friends lowball. Being insulted by a lowball is kinda ridiculous. This is business. You either take it or you don’t. No need to get all emotional about it.

Assuming that 450K is accurate and fair market value, then their pricing it at 430K should easily sell in any market. If they are in distress, they may consider your offer. Otherwise they shouldn’t need your friend.

If they are just trying to overprice it, then yo friend may have a high chance.

Wait.. your friend is buying at 10% off in SD? Are we not in the “everything is going to crash 30-50% forum”? Did you warn him?

[SD Realtor]

I have a couple of prudent clients who I work with who have submitted plenty of lowball offers. I usually call the listing agent prior to submitting it to give them a heads up on what is coming in. I also tell them the amount just as a courtesy. I cannot control whether the listing agent will submit the offer or not but absolutely it is a duty for the agent to present the offer unless the seller has given the agent instructions otherwise. There are cases where a seller may tell an agent to not even present offers under a certain price.

[justme]

Five parallel offers:

Chrispy, this is something I’ve been wanting to do.

How do you go about it, exactly? In each offer, are you
putting as a “contingency” that the acceptance price must
be

a. no higher than your specific offer
b. lower than the the acceptance price of your other 4 offers,
which you list on your contingency page

Is this how it works??

[sdcellar]

I’d just say that once all offers have been received after the 48-hour period the buyer will consider them together and choose the property that suits him.

I believe that’s how sellers used to run it in the days of multiple offers. Not really a nice way to do business, but what goes around comes around…

Doubt the MLS forms handle this (as they do for multiple offers from buyers), but if it’s included in the offer terms in the first place, I’d say there’s not much the seller can do about it (other than decline the offer).

[justme]

Excellent, sdcellar.

This gets around the problem of having to commit to
enter into contract on the “lowest accepted offer”
property.

All you are committing to is to enter into contract
on *one* of them.

Of course, what I want is to pick the “best deal” among
the accepted offers or counteroffers. The best deal
may not be the one with the lowest price point, as
sdcellar correctly inferred.

Now, how do I find an agent that is willing to do this
type of “reverse multiple offer”?

Or have you had success writing up the offers and
submitting them yourself?

This in turn brings up the interesting point
of “representing yourself”.

If I remember correctly, the usual resposne from an agent
is that they cannot give you part of the comission “because
that would be illegal, hence you may as well get a buyers
agent”.

This is of course bullshit because you aren’t
really asking for a comission as such, you are asking the
agent to rebate their comission from the seller, who can
then pass it on to you in the form of a lower acceptance
price.

Is the listing agent obligated by law to present such
an offer?

[Author]

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