As an agent I've been in the position of having a client who offers low to see what the seller will do. I also have to say there are times I've been totally surprised at the counter offer we get back and my buyers have jumped for joy and got a house at a great deal. You just don't know how motivated a seller might be.
As an agent on the listing side I've had sellers refuse to counter, want to counter at higher than list price and just get insulted and mad. I try to talk them into taking the emotions out of it and making a counter that does show a willingness to negotiate and to not get insulted by an offer. It beats the alternative of NOT having an offer.
We sent an offer today and apparently both the agent and seller were insulted, not only did it get sent back to us at list price it actually was sent more than 3 hours after it expired. It certainly wasn't the way to continue to negotiate.
We also recently had one who wanted to counter the loan terms. They actually wanted to bump the interest rate our buyer was "willing" to pay by more than a half of a percent. The fact that twice they countered the amount of the interest rate was enough to make our buyer move on to another house. Wonder who killed that negotiation, the seller or the agent?
My advice to sellers is never to take an offer they aren't happy with, but always to keep the channels of negotiation open. Sometimes a few baby steps toward someone is all it takes to get them to walk over to you. But if you push them down once or twice they are going to walk on over to another buyer. In the market we are having locally there is lots more inventory out there.
If you are a buyer or a seller you really should ask for an updated CMA and make a sound business decision and not an emotional one.
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I think it depends on the property the low-ball offer was written on. Awhile back, I had buyers who wrote an offer for $625,000. on a $775,000. house. However, the market was slower back then, and I could not find comps to support the list price for my buyer. I even asked the listing agent to help with it. And, what she sent was in an area about a mile away but on larger lots and a little more exclusive neighborhood.
At first the seller just declined our offer without countering; but within the week the listing agent called, and wanted to know if we would write another offer. We did! But for just $640,000. The seller accepted that one without countering. Sometimes you just never know!
Exactly why I think when there is an offer buyers and sellers need to be looking at comps (obviously true comps). In the rural area I live in it's not uncommon for comps to be 25 miles away. We don't have "neighborhoods" that are typical to cities. And yes, you never know and like I said I've been surprised a few times.
I tell my clients to counter back...remember yo have a live interested prty and you never know how high the will come.
Tammy Lankford
There are often surprises, on both sides. My hunch is that in some cases the agents, despite knowing and perhaps coaching their clients to not get emotional, tend to cause more issues than resolve them. As I tell sellers, don't be mad at the buyer who made you an offer, be mad at the ones who didn't. Now we have something to talk about
Jeff
William Feela exactly
Jeff Dowler CRS I feel pretty stronly that an agent recently caused serious issues in the negotiation process. But their loss. My buyers found another property and ultimately I believe they will be happier.
Hello Tammy ... I have never been to fond of low ball offers, and kind of find them to be a slap in the face towards the seller.
We have been taught as agents to present all offers to the buyers. And I try to explain to my clients that they can get more, of course unless they are very desperate to sell.
Robert (Alaska Bob) Swetz like Jeff said above, even with a low offer you have something to talk about, it's better than no offer.
Good morning Tammy. I just received a low ball all cash offer for a home we are flipping. I thanked the prospective buyer for the offer and let them know that the price was not acceptable, as you never know if there is a higher offer coming.
Sometimes it's better to stay in the game with smaller counter-offers, than to be completely out of it...
Tammy, if a buyer makes a ridiculous offer they are the ones that should not be offended by a ridiculous counter. They started it! Enjoy your day!
If someone places an offer, that indicates there is interest in the purchase of the property. If the offer is low, it might feel insulting to the seller, but the best course of action (in my opinion) is to consider the offer, and make a counter. You just never know where buyer/seller will meet.
Good morning Tammy. You are very smart and very right about any offer being better athan none. You never know so keep talking.
I've written a few and I've received a few. From my experience, if there is honest & open approach between buyer and seller, a deal can often be struck. The emotions of the agents involved can cause big problems in inflaming the clients and killing any hope of a deal.
Tammy Lankford
There are some low offers, or perhaps offers with terms that are not reasonable, that do become an agreement if both parties can work toward a meeting of the minds and the agents play their role appropriately and don't let THEIR emotions or agendas get in the way - sometimes it takes a while. Some never go anywhere - you just never know...I've had plenty of surprise when I thought there was no way we would get to an agreement.
It's tough for either party when you feel that the other side is not being "reasonable", however you might interpret that. And keeping emotions at bay IS a real challenge. Easy to say, harder to really do - been there done that 11 times myself
Jeff
I don't enjoy low ball offers from either side of the fence, but if I have a buyer that wants to make a lowball offer, I will usually reach out to the listing agent to see how willing the Seller might be willing to go low.
Tammy I agree and you have the right approach. Over reacting to an offer and shutting the door does not profit anyone.
I've never heard of a counter increasing the interest rate. Did I read that correctly? Better scroll back up and re-read.
If it's too low just advise the seller to say thank you for your interest and glad your buyers liked the home.
I just finished giving one of my agents a little speech today about not trying to presume what will fly and what won't fly because he doesn't know. None of us know. We don't know what a seller or a buyer will do. Just present the offer and deal with the counter.
Do you write in an expiration for your offer or is this a part of your contract?
Joe Petrowsky without any sort of counter offer?
Lawrence "Larry" & Sheila Agranoff. Call 631-805-4400 (c) I totally agree
Wayne Martin I see it as a starting point, not ridiculous. I've worked out many deals that started with low ball offers.
Kat Palmiotti I totally agree
Sheila Anderson we came to terms today. Now 25% of my current listings are pending. I need new listings.
Jenna Dixon I hate dealing with off the chain emotions
Jeff Dowler CRS I believe our own experiences help us to help others in this business. Walking a mile in those shoes so to speak.
Brian England does a listing agent ever actually tell you a seller will take less without their client's approval of that in writing. Yikes
George Souto I sure don't think so.
Carla Muss-Jacobs, Principal Broker/Owner our finance contingency says these are the terms buyer is willing to seek loan approval for, we fill in LTV, interest rate, # of years, and type of loan ie (conventional, fixed rate) And yes the agent actually decided for our client what terms he should be willing to accept. Mind you we'd talked with loan officer who could have locked him at the rate we had in the offer upon ratificaiton of said offer. He also ultimately purchased a home at that exact rate of interest.
Edward Gilmartin that would never be my advice.
Elizabeth Weintraub Sacramento Real Estate Agent, Top 1% of Lyon Agents show them the comps and let them make a decision is what I tell my agents.
Margaret Rome, Baltimore Maryland it's part of our offers and counters. We fill in the date and the time the offer is open for acceptance. Offers signed beyond acceptance time in offer are voidable by either party.
Great post Tammy and I like to tell my clients not to take it personally, and that it is business. And an offer is an offer!
Sharon Paxson it just doesn't make sense to bow up at someone making an offer on your house.
It's interesting to see that sellers in GA can evaluate an offer based on lending terms that really don't affect them. It seems to me that the things that should impact a seller's decision - price, closing date, contingencies, repair requests, etc didn't come into play here.
I have had buyers turn down offers only based on knowing their house wouldn't meet FHA, USDA or VA minimum standards when we got an offer with a buyer needing that after we clearly stated in the MLS the seller would not accept those terms. However we NEVER countered back the buyer MUST apply for a conventional loan. That would be silly.
And honestly I have actually met the sellers on that particular house and I just don't see it being THEIR idea. I think it was a clear case of an agent on a power trip who cost the sellers a deal. House is still on the market and our buyers are happy in their new home.
Best to counter all serious offers. The only ones that worry me as a listing agent are the offers from known "flippers" that only tie the property up long enough to shop it around to other investors at a higher price.
Tammy Lankford I think it has happened and I always think to myself that they shouldn't have said that, as I would never give up our hand, when I am representing a Seller. Most of the time, they won't say it though, but it's like playing poker, you look for "tells", signs that they are answering the question without actually anwering it, haha.
It's tough....both sides. Remaining calm and listening to the voice of reason (hopefully your agent) is the way to go.
I think there is a point were an offer is not worth taking seriously, and generally if ignored and the buyer is serious they can come back. But an offer less than you are willing to accept is not a reason to get insulted. It is just the start of a conversation.
Tammy, after an initial written offer it's fairly typical to verbally negotiate an agreement then write up a clean contract....makes low ball or lengthy negotiations a little easier. Although, I can't remember anyone countering an interest rate...I do get it...to some extent.
Rob Arnold don't really see that in my market
Brian England I so agree that sometimes the other side will readily give up info, sometimes even if I haven't asked.
Sharon Tara sold my BFF's house this past summer. Keeping her calm was no easy feat. She resently said to me she would not want herself as a client.
Jane Peters well I agree that two chickens and goat on a half million dollar house is just laughable, but most of the time it's the start of a conversation
Nick T Pappas no verbals in my office. Electronic signatures are just too easy to do verbal. And them countering a rate our buyer could have locked in at makes no sense to me. In fact the pre-approval letter included the rate.
Tammy, verbals are just so easy...never had a problem yet! I agree countering to a rate that would definitely be locked in is silly.
If they didn't sign it, it wouldn't hold up in court. Too many times I've had agents tell me their clients agreed to something and signatures NEVER get on paper. So we just stopped. Put your money where your mouth is so to speak.
Just another example in how GA and NC differs in their contract, there are no loan contingencies in the NC contract. It is all part of Due Diligence and there would be nothing for the seller to counter regarding loan terms. Unless there is seller financing involved, why would a seller care what the interest rate was?