We talk about how hot the market is, but not every seller is enjoying the benefit. Of the 850 NSDCC houses for sale, 41% of them have been on the market for 60 days or longer – and that’s not counting those that have been ‘refreshed’. These are ripe for a lowball offer.
But we live in a very polite marketplace, where buyers and agents alike are so concerned about offending people. You rarely see an offer that is more than 5% under list price, and it’s because buyers just figure that the seller wouldn’t take it, so instead they keep looking.
The agents working with buyers tend to be newer agents, and they don’t want to offend any of the seasoned listing agents either.
But lowball deals happen.
Have you seen a sale close for a price well under the list, and say to yourself, “Dang, I would have paid that amount”.
It’s usually a home that has been on the market for a long time and been forgotten, usually because the seller was reluctant to lower the price. Finally a lowball offer comes in and, well, heck – they just sign it out of frustration.
Many times the lowballer approaches the listing agent directly. The agent, motivated by the double-commission, then has to coax the seller down in price.
The sellers, who haven’t seen any other offers and are left to their own devices, make the deal – convinced it’s all they can get.
Note to Sellers: If you have a lowball offer on the table that you are thinking of taking, pause and take a breath. Then lower your price to the midpoint between your current list price, and their offer price for 24 hours, to see if any other bidders emerge.
There might be some polite buyers who would be happy to pay more than the lowballer, if they only knew you might take less!
Your “Note to Sellers” advice, JtR, is extraordinarily wise and correct. Once again, you prove not only why it’s important to “Get good help” but why buyers/sellers should call you…
Thanks Susie!
A lot of this stuff is only obvious after the fact. Another example is the pocket listing, and how those mostly benefit the listing agents, not the sellers.
One more thing on the lower-to-midpoint strategy:
Once the buyer sees you mean business, he would be more likely to consider your counter-proposal. (you’ll have the ‘fear-of-loss’ working for you)
If a house is priced 20% over market, is a market-based offer a “low ball” offer?
The phrase “lowball offer” is a tried and true realtor idiom designed to shame and ridicule buyers into offering more than market value and which hinders sellers from accepting an offer that might conflict with their (or their agent’s) false perception of market value.
How dare you suggest! 😆
or maybe that house was actually priced high in the first place and the buyer proposed a realistic price.
Some buyers overpay and new sellers in area think their house is worth a lot more just because a little time has passed- when nothing has really changed – they just have to wait for another “over payer”.
like you said in an earlier post, buyers just quickly fold.
It’s all about the offer (details)
Is there an old pre-1976 classic car or truck thrown in?
Not to be the party pooper but buyers can work together when putting together offers the same way sellers and their agents do.
Just have a friend (or several friends) submit a much lower offer than you plan to. If they get the offer accepted they pull out for whatever reason. Most likely they won’t. This will make your lowball offer look like a much better offer.
This only works when higher offers arent being submitted.