Low Ball Bidding
STRONG MEDICINE FOR LOW BALL BIDDERS
Here's My Approach--By: John Kavaller- NYS Licensed Broker Associate
Let's get this point on the table right now. Good agents understand the need to negotiate a well placed offer favoring their client. As a buyer's agent, getting our clients the best deal possible is number two on the short list of getting the job done. Number one on the list, of course, is finding the right property for you.
When we find you the right situation, we formulate a strategy that will:
- 1) shape a seller's opinion of your ability to purchase and lobby that view
- 2) minimize your expediuture for the purchase.
By researching comparable sales, we determine the market prices of similar real estate. Historical sales within 10 miles (in a rural setting and far less in an urban one) and 6 months provide a realistic snap shot of the opening offer we realtors will suggest--at least that's my approach. There are nuances for adding and subtracting offered dollars based on individual features of a specific property.
May I suggest here that lowballing a home you really want to purchase is exactly the wrong view and path. Unless the seller is in default or other serious financial difficulty, your low ball offer will simply generate a no counter response. How do I know?
When I work as a seller's agent (By the Way--I work with about a 50 percent split. About one half of my client base is sellers, the other half, buyers.) I suggest that a low ball offer should not be countered because the void between will not be met reasonably. It also indicates the potential buyer is only interested in price and probably not the individual aspects of the property in play.
That's a very weak position for a seller. The buyer's thought process is: "If I don't get my price, I'll simply move on." There is no "fire in the buyer's belly". This attitude bodes poorly for successfully negotiating a legitimate price agreement.
When I first meet with a potential client, we discuss best practices that lubricate the buying process and result in a smooth purchase. If this first "get to know you" phase stays on track, I'll work diligently to find the right property and negotiate the lowest, legitimate price available. On the other hand, if the low ball model works best for you, please find another broker/agent.
"Realtor in CT" BROKER,ABR,GRI,CDPE,CIPS,SFR,MBA
Home Buyers Realty, LLC- Manchester, Bolton. Vernon,Ellington Address: Manchester, Connecticut
Office Phone: (860) 432-0885 Cell Phone: (860) 995-9473 Bolton, CT
Are we hungry for prospective clients that we forget to screen them ending us up with our precious time flushed down the drain?
Unfortunately, we don't really get the core of their motivation until they make a ridiculous offer.
After working with my clients via e-mail and telephone for almost eight months on sporadic basis, I was ecstatic to hear on the other line the excitement on their tone. The couple delightfully announced that this property might just be the perfect home for them.
I checked quickly online with extreme curiousity the property which triggered their attention. They have been scouting for houses on their own since they have been indecisive as to their wants and needs. They jumped from a residential to a condo. Or from the towns in the Northeast and down to the Southeast.
My excitement was compounded because the house was set on a lake community that I am very familiar with. Not only that. It was very rare to find a property in this area with almost an acre of land.
The house was as delectable as a chocolate fudge. It was deliciously adorable. I could not be more descriptive here as that was my personal opinion.
Anyway, my buyers seemed impressed as well. Were they so impressed to taunt them into making an offer?
Oh yes. They did make an offer. But I almost shrieked in disbelief after my auditory senses processed the number they thought the property was worth despite words of advice and sheets of information to guide them with their decision.
This property was a unique one. A RARE find. Hence, I have to pull out sales from neighboring lake communities for comparison. Even a seasonal home would not come closer to the amount they would like to offer for this year-round home. And for the price it was listed for, I was quite sure it would not last long.
Sixty percent below the asking price for a property that was like a gem. Rare and precious being a year-round home in a lake community with approximately an acre of flat level land. It was a home that would only require new roof in perhaps a year or so and a touch of paint on the fascia. The interior was all updated. These were the obvious.
After listening to the rationale behind the offer price, I would not want to hear anymore.
It is time for Adieu without further Ado. The price of gas is still pegged at $4 per liter and dogs' treats and food are not cheap. I work hard for my buyers to ensure that they find the right home.
But I have already learned my lesson. I set a demarcation line as to whom I should relentlessly focus my attention to and for whom I should continually exert due diligence. These are buyers who have realistic expectations of the market trend and who trust me as their realtor.
And by the way, the subject property has a pending contract as I am writing this which only proved that I was right.
Note From John Kavaller: Although this article is written about the Phoenix Market, it applies equally as well to the market here in the Sullivan County, NY Catskills
Low Ball offers on Phoenix Short Sales--Reprinted with Permission
By: Anna 'Banana' Kruchten - Phoenix Real Estate Broker,CRS
Phoenix, AZ-- Phoenix Property Shoppe--602-380-4886
Direct Website Link to Ms. Anna Kruchten
Ok folks listen up, please stop calling agents and telling them you've as good as gold, have cash, can close in two weeks etc etc etc on short sales. Just stop! Short sales don't work this way - they really don't. Some short sales can take 60 days others could drag out for a year. Really. I'm not joking. As for you having cash, well that's fine but the bank is not going to take an offer for 50% less of what they think they should realize just for you - especially if the home has been on the market for a week or two. It's just not reality. Now if it's been months and months or longer you might have a chance - might. But it's doubtful - just saying.
Yesterday I got yet another call just like this and we had a real hard conversation that he didn't want to hear. The guy suggested to me - hey I'm your guy who can close deals, fast and with cash so call me. No, I'm not going to call you back unless - UNLESS I knew the bank would even consider such a low offer. I know pretty much what a bank will take on a short sale in our hot Phoenix market and it's not 50% off. And BTW I've got two other agents that will be writing on this very property you called on and they know what needs to happen in our short sale market.
I am sure this guy doesn't know how short sales really work. It was if he was reading off a script from some short sale investor seminar he had taken recently. Is somebody teaching these folks how to buy short sales? No. In the past when ever we'd get the 'zero down' calls we knew for sure another seminar promoter had been in town. Since I don't read the paper I don't know who's advertising again. Somebody is making money on short sales and it's not the attendees but rather the promoters. Folks this is the oldest trick in the book.
If you are new to buying short sales the best move you could make is to call a broker or agent that understands how short sales really work and make an appointment. Listen to what she/he tells you -carefully - if you want to be a succesful short sale bidder. The agent has most likely been working on short sales for the last 4 or 5 years and knows what they're doing. Really they do. Save everybody some time and learn the short sale ropes in your area before making 'pie in the sky' verbal offers and proclamations of how you're good as gold. If you do you just might be the successful bidder on a short sale that would make an excellent investment. Now make that call to a good short sale agent and win the bid on that short sale.