low ball offer....

[purpleeyes]

We just got an "offer" on our house. It is $39,000 LESS than the asking price. It isn't really an offer, just a feeler sent out to our realtor. If we like it, they'll write a contract.
I really don't want to take it, but I know I should. Another one might not come around anytime soon.

BOO! :thumbsdown:

[elaineandmichaelsmommy]

See now this is what I HATE about the current housing market. Everybody wants THE DEAL buyers think that everyone is desperate to sell or is willing to sell for whatever amount just to be done but they don't understand how much they are offending sellers and making everyone just plain old mad. It's ballsy and insensitive and I think realtors that encourage this behavior should be mmmmm. informed differantly shall we say.

[crl]

Can you counter?

Sorry,
Catherine

[arivecchi]

Last summer we got a massive "lowball" offer. That offer seems reasonable now. :(

[HannaAddict]

That doesn't sound that bad to me considering the market these days. But I also don't know where you are starting from. We sold our craftsman last year and had a couple of
low ball offers, both from people moving from out of the area. They had read that they should get a deal but we were in prime neighborhood, great school two blocks away, charm galore etc. We countered the first time, then didn't, and sold about five weeks later for within our target. Soooo glad we sold . . . things are lower this year and we would be looking at much less. It is no fun and hard not be feel upset or get emotional. Good luck. (if it makes you feel better, houses in a resort an hour and half away are selling for over ONE MILLION less than they sold for two to three years ago!! Crazy.)

[HannaAddict]

See now this is what I HATE about the current housing market. Everybody wants THE DEAL buyers think that everyone is desperate to sell or is willing to sell for whatever amount just to be done but they don't understand how much they are offending sellers and making everyone just plain old mad. It's ballsy and insensitive and I think realtors that encourage this behavior should be mmmmm. informed differantly shall we say.

It is just business. House prices are lower these days and offers will reflect that. No fun to be a seller. Friends just bought a cannon beach, or ocean front home for $800,000 less than it sold for in 2008. They made an offer $150,000 less than list price and got it. It had already been reduced by $400 k and was listed originally for less than the 2008 sales price.

[MamaMolly]

Ouch. How long have you been on the market? Is it the first offer?

[citymama]

I would definitely make a counter offer, unless you are ok selling way below asking.

[AnnieW625]

Counter back at $18,750 and see if they take it (people like crazy numbers like that). Good luck, if not see if you can both settle around $25,000 (I negotiate settlements for a living; it's not fun, but it's always a relief once I've settled in the middle).

[purpleeyes]

Thanks for the thoughts everyone...I wish I could counter! That would make this much better. No, apparently, they just sent an email to my realtor saying they could afford x amount and they also wanted $2500 in closing costs. If we were unable to accept that, they wouldn't bother writing a contract. So, they are basically completely avoiding the negotiating aspect. ;(

Arrivechi-you hit the nail on the head. This is what I am so so afraid of. After sleeping on it, I am pretty sure I am going to take it. :shrug: I feel like its all I can to right now.

[poohbear]

On a positive note, if you are buying, you will probably be able to do the same thing/get the same sort of benefit when you buy. Fortunately/unfortunately it's a buyer's market, but that works both ways (as long as you're buying).

[TwinFoxes]

It is just business. House prices are lower these days and offers will reflect that.

:yeahthat: We got offers, and countered them. I wasn't insulted...annoyed maybe, but they don't owe me, and I don't owe them, it's a business transaction. We made a profit when we sold, but we didn't get anywhere NEAR our asking price...but after 6 months on the market it was time to get what we could.

Then we were on the other side. One house we were interested in sat on the market for over a year at the same asking price. Finally they lowered it by OVER $100,000 (we had already bought another property). If they had priced it just $40,000 less to begin, we would have bought it. Their agent said they weren't taking "lowball" offers. They could have gotten $60,000 more from us, and not had to pay the mortgage on TWO houses (they had already moved). I guess our offer insulted them, but in the end they got way, way less than what we offered.

The house we ended up buying had 3 full price offers, because it was priced well. I wouldn't have paid any more for it. I saw what they paid for it 3 years ago...they lost almost $200,000.

But, I totally, totally, totally get why it sucks!!!

[arivecchi]

Thanks for the thoughts everyone...I wish I could counter! That would make this much better. No, apparently, they just sent an email to my realtor saying they could afford x amount and they also wanted $2500 in closing costs. If we were unable to accept that, they wouldn't bother writing a contract. So, they are basically completely avoiding the negotiating aspect. ;(

Arrivechi-you hit the nail on the head. This is what I am so so afraid of. After sleeping on it, I am pretty sure I am going to take it. :shrug: I feel like its all I can to right now. Having had my house on the market for nearly a year, I would take it if it is reasonable and you can do it. I so wish we had taken that earlier lowball offer, cut our losses and moved on.

[sste]

Do you mind telling us in percentage terms how much less the 39k is than your asking price? And do you know the list:sell percentage ratio in your area?

Also, is your house a "family" home that people with kids would buy? My impression is that the market for such homes goes way, way down this time of year because buyers can't move in before the school year starts and many buyers have school-age kids.

I also think there is something to be said for a bird in hand! And don't take it personally - - I am a potential buyer right now and its not that I want to take advantage of sellers or cut them to the bone . . . its that I am worried the market will continue to trend downward and I don't want to "buy" their financial liability.

[cono0507]

We just sold our home for $65,000 less than we paid 4 years ago. We ended up selling for 30% off the initial listing price.
It is painful to be a seller right now. But the market is what it is and it sucks right now.

However, now we are shopping for houses and I wouldn't hestitate at all to offer $39,000 under listing and negotiate from there. Not sure what % that is with your house sale.

Hang in there.

[Tondi G]

You can take the offer but tell them the $2500 in closing costs is on them. See what they have to say.

[amandabea]

Our house is currently listed for 35% LESS than what we paid four years ago, which is pretty much equal to what we put down on it, but I'd be happy with just about any offer at this point.

[ShanaMama]

Well, we didn't accept the lowball offer we got & hence are not movig this summer. :hopmad: it turned out to be the *only* offer we got. And I am kinda biting myself for not taking it, all the while claiming this was meant to be. I have very little confidence that we can get closer to asking price over the next year, but my house is still on the market so we'll wait and see.
FWIW, we put in offers $80k below asking. One of them was accepted but we ended up being outbid during attorney review.

[tiapam]

Thanks for the thoughts everyone...I wish I could counter! That would make this much better. No, apparently, they just sent an email to my realtor saying they could afford x amount and they also wanted $2500 in closing costs. If we were unable to accept that, they wouldn't bother writing a contract. So, they are basically completely avoiding the negotiating aspect. ;(

Arrivechi-you hit the nail on the head. This is what I am so so afraid of. After sleeping on it, I am pretty sure I am going to take it. :shrug: I feel like its all I can to right now.

OK, I have not been in the housing market since 2007 (thankfully) but this pseudo-offer seems very unprofessional to me. It is not hard or time consuming to write up an offer. That is how it should be presented. On paper, that they have signed. Otherwise you are asking for trouble. If they can only afford so much, then they should leave room for negotiation in their offer or present it as their final/best/only offer.

Also, for those who got lowball offers, did you counter? I would think that is the next logical step after a lowball offer if you have any flexibility at all, and don't absolutely have to sell.

[HannaAddict]

OK, I have not been in the housing market since 2007 (thankfully) but this pseudo-offer seems very unprofessional to me. It is not hard or time consuming to write up an offer. That is how it should be presented. On paper, that they have signed. Otherwise you are asking for trouble. If they can only afford so much, then they should leave room for negotiation in their offer or present it as their final/best/only offer.

Also, for those who got lowball offers, did you counter? I would think that is the next logical step after a lowball offer if you have any flexibility at all, and don't absolutely have to sell.

When you are going to make a true lowball offer, usually the agent lets the other agent know and kind of tests the waters so as to not waste time of either side. It lets the other agent mentally prepare their clients for the offer so they won't just get mad but actually think about it. Just handing in the cold hard low ball on paper, without advance notice is just not done around here. When we were sellers and got a low ball offer the first time, then 10% off of what we were asking (doesn't sound that low now!), we did counter and the other side countered a ridiculous amount of one or two grand and we said "buh bye." Second offer of the same amount we just told agent nope, we weren't countering. Both of these couples were from out of state where real estate is way, way cheaper and were probably in shock on what a two bedroom one bath in a nice neighborhood goes for here. The offer we did take started out with the same dance, the agent said the guy was going to offer "x" - same as other two couples. We said we didn't need to talk then, since we didn't need to sell it (had bought it over ten years ago for much less and could rent it). The guy wrote the low offer, we didn't counter in writing but told our agent what our absolute bottom line number was, it was about 3% less than the list price. The guy wrote the offer for that price, then tried to nickle and dime us in the inspection and we offered a couple grand off the price, period, no repairs and it was done. Whew. He was from California and so didn't have sticker shock. We are soooo glad we sold last year, I don't think we would get that now.

[wellyes]

I am a potential buyer right now and its not that I want to take advantage of sellers or cut them to the bone . . . its that I am worried the market will continue to trend downward and I don't want to "buy" their financial liability.

That's exactly what it is --- buyers will eventually be SELLERS of that same house. House values around here have declined maybe 25% in the past 5 years. It's not unlikely that a house bought today will experience a similar decline in value over the next 5 years. So in some ways it doesn't make any sense to pay what a house is valued at today since it may quickly depreciate.

[mommy111]

I also think there is something to be said for a bird in hand! And don't take it personally - - I am a potential buyer right now and its not that I want to take advantage of sellers or cut them to the bone . . . its that I am worried the market will continue to trend downward and I don't want to "buy" their financial liability.
:yeahthat:
I am looking at homes right now, and I can tell you that in my mind, many of them are way overpriced. The owners are pricing based on what they bought for 5-7 years ago and I am looking based on what it seems they will be valued at 5-7 years from now. There have been so many houses that I've looked at online and thought their real value is about $100,000 less than what is listed. Not saying that is true of your house, but I've def seen houses like that. I would probably never drum up the courage to make a true worth offer that was that much less than listed honestly. I'd be afraid of hurting feelings like yours were :)

[KHF]

Then we were on the other side. One house we were interested in sat on the market for over a year at the same asking price. Finally they lowered it by OVER $100,000 (we had already bought another property). If they had priced it just $40,000 less to begin, we would have bought it. Their agent said they weren't taking "lowball" offers. They could have gotten $60,000 more from us, and not had to pay the mortgage on TWO houses (they had already moved). I guess our offer insulted them, but in the end they got way, way less than what we offered.


This is almost exactly what happened to us. When we were house hunting, we put an offer on a house that was WAY overpriced to start with. They already had a $10K drop in price, and it was still overpriced for the comps and the finishes in the house. We were not willing to go over $200K for the house and they stopped negotiating at $204K. Would not come down another cent. So we walked. We found another (better) house in a better neighborhood for $197,000 (they had theirs listed at $215, but needed out and they were realtors, so they knew what was up). The first house we put a bid on eventually sold for $190K.

It helps to know when you have bargaining power and when you do not. In this market, unfortunately most sellers do not. We sold our house quickly because we priced it very aggressively and it was a ranch w/ a basement in a sea of bi-levels. (It sold in 3 days.)

[WolfpackMom]

Thanks for the thoughts everyone...I wish I could counter! That would make this much better. No, apparently, they just sent an email to my realtor saying they could afford x amount and they also wanted $2500 in closing costs. If we were unable to accept that, they wouldn't bother writing a contract. So, they are basically completely avoiding the negotiating aspect. ;(

Arrivechi-you hit the nail on the head. This is what I am so so afraid of. After sleeping on it, I am pretty sure I am going to take it. :shrug: I feel like its all I can to right now.

What would make me nervous about this, is come closing time are these people going to have fully approved mortgage etc. If thats the bottom line they can afford, then is money tight, or do they have a pre-approved mortgage for that amount? I know more than one person recently who thought everything was set in stone, then come closing time, the mortgage approvals didnt go through for the buyers and they lost the sale. One couple lost the sale because the mortgage company specifically told the buyers not to buy appliances or make any big purchases in anticipation of fixing up the new house, but they didnt listen, made some purchases and lost the mortgage for having racked up a few thousand dollars debt on the credit card.

I would counter to atleast not cover the closing costs, and keep in mind that you will have repairs to pay for or adjustments to make after inspection.

[khm]

In my area, realtors do talk to each other about pending "low ball offers" before getting to the paperwork stage. It is just a courtesy / heads up / the norm here. I think somewhere along the line it was decided that it was a better way to approach it vs. the cold hard facts on paper (as a PP mentioned above).

Whether or not this is true, who knows. It really depends on the clients and whether or not the realtor explains that this is the norm to their clients vs. letting the clients think it's just a weird maneuver.

You can simply say, "I'd like to see it in writing and we'll decide from there". If they are scared to put anything on paper, then maybe they are just not ready, regardless of what they are saying verbally.

It's the job of the realtors to hear what makes you comfortable and work with the other party. If this verbal stuff isn't what you want to deal with, then tell your realtor that. Insist in seeing all offers in writing. You can still reject it or counter. If you counter and they reject, you haven't lost anything, right?

No matter what, I do hope that you are able to "make up" the loss on the buying side. It is a tough market out there, keep your chin up by looking at both transactions vs. just the selling side!!

[brittone2]

We got an offer 2 weeks in for20K under our asking price. They also wanted 8K in closing costs because they were "cash poor" (lots of details there). We were so torn. 2 weeks in, kwim? But I wanted to be done. We eventually cut down the closing costs we were going to pay out considerably and DH's new employer agreed to cover half our realtor's fees. Both realtors also agreed to take a 0.5% reduction (buyer's mother was the agent in our case).

In our case, we were able to break even for what we paid for the house (5 years ago, market in that area is still pretty solid as it was never really all that inflated), get our full equity back, and cover the closing costs. We decided it was worth it to take the offer and be done. (eta: we had decided in advance that we'd live with the "break even" point and consider ourselves lucky to not have lost anything considering we bought 5 years ago.)

Then they requested 800 in repairs, quoted a price for those repairs to be done by the father of the buyer (contractor). Ugggh. I was getting so fired up at that point, as the repair requests were for super small things (pound in nail on board on deck...$25, installation of anti siphoning devices for exterior hoses at a cost of a few hundred (our agent consulted w/ someone and installed some plumbing piece for $16 that did the same thing) and so on and so on). FOrtunately my dad is still in the area and knocked out almost everything in a few hours, and then we left the buyers a roll of insulation for something else they wanted to fix. They were obviously trying to pad their closing and end up with some cash, but it didn't work out that way for them. Everyone is trying to squeeze out every last drop of cash/lower payment they can as a buyer. It can be tough to swallow.

It was frustrating, but in this market, I was glad to be DONE. We are in a rental for another 9-10 months most likely and will be house hunting toward the end of our time here. Prices in our new home state are still high (and I think a bit inflated). On the flip side, we're hoping to get more house for our money than we would have in a better market, and we'll likely be asking for closing costs as well.

It is just business, but it is hard to step back and view it that way. It is tough. My parents are trying to sell and are overpriced right now IMO. They own their house outright but will likely take a bit of a loss (way less of a loss than many, many people are dealing with in the current market though, so I try to keep that in perspective).

eta: in our case, buyers were only approved up to X amount (200K) and we had to be under that (NC housing prices are very inexpensive). I kept thinking it would all fall through but it worked out. They were getting an FHA loan and we saw the approval. Crossed our fingers. THey put the offer in to us in May and things were backed up due to the crazy # of closings in April. Mortgage docs were delayed a bit and closing got pushed back a few times. We did eventually close.

Best of luck. It is a tough, tough market. Tough decisions, for sure. I think you need to look at what % this is under your asking price, whether this puts you underwater/how much equity do you walk away with, etc. What will your carrying costs be to hold this for another 6-12 months (hopefully a worst case scenario...).

[brittone2]

This is almost exactly what happened to us. When we were house hunting, we put an offer on a house that was WAY overpriced to start with. They already had a $10K drop in price, and it was still overpriced for the comps and the finishes in the house. We were not willing to go over $200K for the house and they stopped negotiating at $204K. Would not come down another cent. So we walked. We found another (better) house in a better neighborhood for $197,000 (they had theirs listed at $215, but needed out and they were realtors, so they knew what was up). The first house we put a bid on eventually sold for $190K.

It helps to know when you have bargaining power and when you do not. In this market, unfortunately most sellers do not. We sold our house quickly because we priced it very aggressively and it was a ranch w/ a basement in a sea of bi-levels. (It sold in 3 days.)

This is somewhat similar to the scenario we ran into. We were the sellers, and in our case we decided while it was unpalatable to see the price they offered (we were already priced competitively, and offer was 2 weeks into our house being on the market), killing the deal over just a few thousand, in this market, was crazy. So we worked w/ them and eventually struck a deal. Dh's employers were great and stepped up to help with realtor's fees, and both realtors also took that 0.5% cut on commission (both had to run it through their agencies) to get the deal done. Any wiggle room on any of those things? Every little bit helps, IMO.

[purpleeyes]

They *finally* wrote the contract, guys! After 3 more showings and bringing friends and family by to see it...it was crazy low and we didn't counter, but my realtor took the closing costs out of his commission, so I felt comfortable with it.

I am very, very glad to be done with this. Being free and on the path to starting over was pretty much worth the low price! :D

[ShanaMama]

That's great! I hope everything goes smoothly from here to closing. After that, send some buyers my way!

[arivecchi]

Good luck! Hope all goes smoothly! Send some real estate mojo my way!

[wellyes]

It's not ideal but there are many sellers who'd be thrilled to get it done the way you did. Congratulations!

[mommy111]

So glad to hear it went well!

[HannaAddict]

Congratulations, it will be a relief to be done. It is tough out there.

[brittone2]

They *finally* wrote the contract, guys! After 3 more showings and bringing friends and family by to see it...it was crazy low and we didn't counter, but my realtor took the closing costs out of his commission, so I felt comfortable with it.

I am very, very glad to be done with this. Being free and on the path to starting over was pretty much worth the low price! :D

So happy for you!!! Glad it worked out. It is so, so nice to have it behind you in this market!!
:bighand:

[WolfpackMom]

Congratulations! I am sure this is a big load off of your shoulders!

[rbsmom]

We're in the same boat. Our house has been on the market for 6 months (only 10 showings - higher priced home for our market). we got our first offer last week (after lowering our price $80k!!). It is $20k less than what we were listed at (PLUS $7k closing costs), but we've already been in our new home for a month (hubby's new job dictated the move) and they also have no more money to spend. We took it - inspection is tomorrow.

My thoughts are if it sits for another 5-6 months we would spend more than that in mortgage/electric/alarm/lawn maintenance/gas/etc..... We'll be taking a $40k loss on the house.

In this market, you really do have to take what you can get. And to make matters worse, the new house my hubby "fell in-love with" within 1 minute, the seller wouldn't negotiate (it was only on the market 20 days. We paid nearly full price. Go figure!!

I think my old neighbors will want to kill us though - they are still priced $20k - $70k over our contracted price (for comparable housing) - we just screwed the comps...

[Tondi G]

CONGRATS! Hope it all works out and that you are on your way to wonderful positive changes in your life!!!