Counter offers

  1. You have chosen to ignore posts from jhwilly. Show jhwilly's posts

    Re: Counter offers

    In Response to Counter offers:
    A few agents have told me that an offer was made, it was too low, the seller didn't accept it, and the buyers walked.  Apparently buyers are not making counter offers.  They are putting in one bid, a low one, then walking.  I'm not sure if the seller counter offered but they couldn't come to an agreement anyway. So the question is:  is this really happening?  Or are agents saying this to dissuade me from making a low offer?
    Posted by Calmness


    Speaking from personal experience I would say this is happening.  I am currently selling my townhouse and I have received two incredibly low offers which I rejected.  Both potential buyers walked when I refused their offers.  I completely understand that this is a buyers market and have priced my unit $10k - $15k less than four similar units in my neighborhood that sold this month hoping for a quick sale so that my husband and I can by a home this summer.  It appears the lower we price our place the lower the offers are that come in.  I understand buyers are looking for a deal right now but they also need to be realistic when it comes to making an offer.  Not all homes on the market are over-priced.  They should do their research, see what similar homes have sold for in the neighborhood they are interested in, check the assessed value of the home etc. Home owners like myself who have their places on the market are already going to be taking a beating due to the drop in home values over the past few years and will not be willing to sell their homes for less than the current market value.  I hope this helps to answer your question.  I'm sure not everyone will agree with me but I thought that an opinion from a current home seller would be helpful.  Best of luck with your home search!
     
  2. You have chosen to ignore posts from ScottsdaleAZ. Show ScottsdaleAZ's posts

    Re: Counter offers

    Calmness - what you need to keep in mind is will the property appraise at the price the seller has listed.  Also, the price you want to offer.  Has the agent given you a market analysis of the neighborhood to determine your offer?  In this market, many seller's have already reduced their asking price.  If they receive a lowball offer, they may be offended and feel you are too far apart and not want to counter offer.

    I am licensed real estate agent, not seeking business, I live far away.  I hope some of my advice may be of help to you.
     
  3. You have chosen to ignore posts from Calmness. Show Calmness's posts

    Re: Counter offers

    Thanks jhwilly!  We are thinking of 95-96% of asking on one house.  That doesn't seem like a lowball offer to me but it may to the seller/realtor.
     
  4. You have chosen to ignore posts from BigWillie2. Show BigWillie2's posts

    Re: Counter offers

    5% under the asking price is hardly considered a lowball offer.   IMHO even 10% under at least deserves a counter offer.

    I've been on each side of a sale this past year,  thanks to a divorce, and Scottsdale nailed it.  The biggie is whether or not the property will appraise out.  You probably won't get approved for a mortgage if you're planning on paying more than the appraisal.  Otherwise you need to stop worrying about the Sellers feelings.  If they think 5% under is an insulting offer then I suspect they're not serious anyway and you should move on.  Never fall in love with any property, until after you've closed.
     
  5. You have chosen to ignore posts from dianamerl. Show dianamerl's posts

    Re: Counter offers

    I am a licensed Real estate agent. If you have any questions you can just PM me.

     
  6. You have chosen to ignore posts from MarieZorn. Show MarieZorn's posts

    Re: Counter offers

    I always warn my sellers to expect a low ball offer. It is going to happen even if the house is priced right. It is up to the seller's agent in my opinion to educate the buyer's agent why an offer is too low and go back to the buyer's and get real if they really want this house. If the buyers won't budge and they walk -then they were just trying to steal a house. And it wasn't going to happen. Its not a good way to start off negoiations anyway on a home you really want to live in!

     
  7. You have chosen to ignore posts from MarieZorn. Show MarieZorn's posts

    Re: Counter offers


    I know there are still many buyers looking. I did an OH last Sunday 8/8/ in Walpole. 26 parties came thru in 2 hours. The house went UAG. My question is with so many buyers looking & only 1 offer:
    Do you feel the market is shifting a bit? Do you feel like you can make a low ball offer and seller will participate? Do you feel like the market may continue to decline? Thoughts?
     
  8. You have chosen to ignore posts from nickknock. Show nickknock's posts

    Re: Counter offers

    Many agents encourage such offers, by saying bring all offers etc..  Even though you might not be making such a claim, the potential buyer by make the mental jump to all propraties. Remember, just because someone makes an offer, it does not mean you have to take it. At least you know people are notcing your home.
     
  9. You have chosen to ignore posts from WhatIsItNow. Show WhatIsItNow's posts

    Re: Counter offers

    A real problem here, I think, is that many sellers bought their homes at inflated prices that did not reflect their worth.  They reasonably do not want to take a loss.  But then again, buyers do not want to pay for inflated value just because that's what the house was "worth" during the false-boom years. And, of course, commission at the home's real value is going to be a lot lower on its false-boom price, which may have an effect on the agent's advice to the seller.
     
  10. You have chosen to ignore posts from wsmboston. Show wsmboston's posts

    Re: Counter offers

    In response to WhatIsItNow:
    Any professional and ethical real estate agent would never change their advice to a client based upon the potential commission.

     
  11. You have chosen to ignore posts from johnnyhung2001. Show johnnyhung2001's posts

    Re: Counter offers

    What if the appraiser for the house is much lower than the seller wanted to sell?
    How many seller agree to drop the price to its appropriate maket value?

     
  12. You have chosen to ignore posts from jimmy1be. Show jimmy1be's posts

    Re: Counter offers

    Sometimes it is just bottom feeders trying to see how desparate you are, other times it is a contractor looking for something he can flip to make a profit. Sometimes it is your prices is too high and a person is trying to see if you will move down to what they consider reality. When I sold my house 3 years ago we had all three types (although I do not think our house was overpriced and we sold it near our asking). Sometimes when someone bids a lowball offer they really want to purchse but do not understand the process (which works against anyone who wants a price to stay at A or B and not be flexible). If they are truly interested they will come back with another offer after the refusal. I have found it not worth your time to counter with $500 off when they are $40000 below your price. Just outright refuse it. THis is what a realtors job is, to explain the parameters and what each refusal and counter means. If you realtor cannot do that appropriately then it is time for a new realtor.
     
  13. You have chosen to ignore posts from jimmy1be. Show jimmy1be's posts

    Re: Counter offers


    In Response to Re: Counter offers:
    In response to WhatIsItNow: Any professional and ethical real estate agent would never change their advice to a client based upon the potential commission.
    Posted by wsmboston


    You say that but I know many instances where the Realtor did not inform the client on a better deal for them bacause the worse deal the people did not have a Realtor. Therefore the Realtor gets full commission instead of partial commission. And realtors self police themselves which we have seen in with Police officers does not work. If a realtor complained then they get blackballed. Not the realtor who is screwing their client.
     
  14. You have chosen to ignore posts from jimmy1be. Show jimmy1be's posts

    Re: Counter offers

    In Response to Re: Counter offers:
    What if the appraiser for the house is much lower than the seller wanted to sell? How many seller agree to drop the price to its appropriate maket value?
    Posted by johnnyhung2001


    In this market they may have no choice if they want to sell it. If it does not appraise for the price agreed upon, the bank will refuse to give the loan. THis happens all the time now, because people do not have 20% to put down. Now banks will not do 100% or more than it is worth. If you watch the market you see houses Under Agreement that then come back on the market and often this is because the bank did not approve the loan because of the appraisal. A house is worth what a person will pay for it. If someone is willing and able to pay 10% more for it than the market deems it to be worth, then that is what it is worth. Only issue is you now need to sell it for that, and just because you decided it was worth it does not mean someone else will.
     
  15. You have chosen to ignore posts from MarieZorn. Show MarieZorn's posts

    Re: Counter offers

    In Response to Re: Counter offers:
    In response to WhatIsItNow: Any professional and ethical real estate agent would never change their advice to a client based upon the potential commission.
    Posted by wsmboston


    Absolutely correct.
     
  16. You have chosen to ignore posts from rlsrd. Show rlsrd's posts

    Re: Counter offers

    All of you make good points especially "Counter Offers". I took lowball to mean a price that is not reflective of the actual price.  Most realtors go in and tell homeowners what comparable homes in the area sell for.  Given that, a lowball is an offer that is more than 5% lower than the asking price.  Yes, people that lowball will walk away.  Also people that lowball will lowball again.  IE:  after the home inspection they'll nit pick this and that to try and get lower.  Also some people come in a little higher than the lowballer and then once they beat out everyone else they nit pick to try and work the price lower.  It really all depends on the motivation of the buyer and seller. How bad do they want the home or how bad do they want to sell.  Let me also say.  The value of a house is location.  Your better off buying a home that is in a great location and fixing it up, than buying a turn key home in a less disireable location("town"). 
     
  17. You have chosen to ignore posts from nickimar. Show nickimar's posts

    Re: Counter offers

    If the house is priced "right"  it will sell in 90 Days or less.  I'm seeing this with about 5% of the property out there, which tells me there are many sellers who are over the mark and decreasing the property 10k-15k each 90 Days isn't going to cut it.  You are chasing the market down. 

    Look at the assessment. If your asking price is the same or higher than the 2010 Assessment I can guarantee you are too high because Mass  Assessments are done 2 years out. So the data is 2 years old.  For some reason the Realtors are ignoring this one important fact.  If your house assessed at 
    500k for 2010, that means that is the assessed value from 2008, so that was the rough value of the house 2 years ago.  Now you have to factor in a declining market for the past two years. If it went down 5% each year (2009, 2010) then shave 10% of that price (500k)  So you are at $450k.  If it went down 15% each year, shave 30% off (500k and you are at $350k.   Voila you are in the ball park and you will sell  your home.  I see very few sellers in the ball park.  They want what their property was worth 2 years ago, often they want more because they took at beating.  Well it's not the buyers fault you took a  beating. Sit on your property, you are probably looking at another 8-10 years for it to peak again longer if the Govt continues to artificially  prop up the market by holding the interest rate steady or offering incentives.  

    I'm a buyer, I do the math and if they don't want what their property is worth in this market 2010 (not 2008 or 2007)  I walk because I know the market is poised to tank and time is on the buyers side right now.  It's a buyers market now, so it's time to shift gears if you want to sell your home.
     
  18. You have chosen to ignore posts from nickimar. Show nickimar's posts

    Re: Counter offers

    Another point I want to make is many buyers are starting to get desperate.  Since the banks are holding onto a lions share of property and they are holding back a significant amount in shadow inventory they have incredible influence on pricing.  They are able to control market conditions by withholding supply to drive up demand and price.  Many buyers are beginning to understand that. When the floodgates let loose this market will bottom out.  In addition to the surge of shadown inventory you have to consider that the interest rate is being artificially held down so the market doesn't collapse.  When these two things give, the entire real estate market it going to bottom out.  It is inevitable.  

    My advice to sellers is sell for what your property is worth now, don't wait unless you can afford to be in your home for the next 10+ years.   That is how long it generally takes to go through a full real estate cycle. The tax credit was extended until Sept 30th that is why it appeared that the RE market is stable, however that has expired now and there is nothing propping the RE market up now, so my guess is get ready for the ride of your life.   Look at the stats, they don't lie.  October stats will be an eye opener.
     
  19. You have chosen to ignore posts from nickimar. Show nickimar's posts

    Re: Counter offers

    Unfortunately there aren't a lot of ethical real estate agents.

    In Response to Re: Counter offers:
    In response to WhatIsItNow: Any professional and ethical real estate agent would never change their advice to a client based upon the potential commission.
    Posted by wsmboston

     
  20. You have chosen to ignore posts from nickimar. Show nickimar's posts

    Re: Counter offers

    I just want to add, that I have walked away from homes that are ridiculously overpriced, and they did sell.  They will sell, there is a sucker out there somewhere who believes what The NAR is spewing, that we are nearing the bottom of the market when that is not true.  They panic and buy because they think they are going to miss out.  You know what, close to a dozen of those homes are being foreclosed on right now, within one year.  So it is very telling that people bought overpriced homes just a year ago and are losing them this year or trying to unload them with no luck.  As a buyer with children, I have no intention of joining that group of buyers.  I will stick to my guns and offer what these homes are realistically worth and not get caught up  in scare tactics about missing out.  When I get my children into a house I'm not going to have to tell them in 6 months that we are moving into the local shelter.
     
  21. You have chosen to ignore posts from nickimar. Show nickimar's posts

    Re: Counter offers

    Meant to type NRA not NAR

    In Response to Re: Counter offers:
    I just want to add, that I have walked away from homes that are ridiculously overpriced, and they did sell.  They will sell, there is a sucker out there somewhere who believes what The NAR is spewing, that we are nearing the bottom of the market when that is not true.  They panic and buy because they think they are going to miss out.  You know what, close to a dozen of those homes are being foreclosed on right now, within one year.  So it is very telling that people bought overpriced homes just a year ago and are losing them this year or trying to unload them with no luck.  As a buyer with children, I have no intention of joining that group of buyers.  I will stick to my guns and offer what these homes are realistically worth and not get caught up  in scare tactics about missing out.  When I get my children into a house I'm not going to have to tell them in 6 months that we are moving into the local shelter.
    Posted by nickimar

     
  22. You have chosen to ignore posts from Manwithoutastar. Show Manwithoutastar's posts

    Re: Counter offers

    Real estate agents sell (mostly) USED HOMES.

    Used Car salesmen sell USED CARS.

    Both sell on commission and usually know little to anything about the individual product that they are selling - only what the home owner may or may not tell them and what their used car sales manager may or may not tell them - such as if the car came from New Orleans after Hurricane Katrina or from an auction house.

    In both cases, you should not trust either salesperson! If you do so, you do it at your peril! It is YOUR MONEY - not the salesperson's money!

    One of the countless problems with buying real estate is that you're involved with an agent for an extended period of time and she uses that time to "get into your head" or your husband's head, etc.

    Your agent is not your friend and she is not your Mother, looking out for your best interests! If your agent doesn't sell you a home, she doesn't get paid!

    IT IS JUST THAT SIMPLE! Buyer beware and stop trying to "be friends" with your agent.
     
  23. You have chosen to ignore posts from ronrsr14. Show ronrsr14's posts

    Re: Counter offers

    Dirty real estate secret about listing price:

    Listing price has almost nothing to do with it. It's a fiction made up by the seller and his/her agent. Keep your eye on the value of the house.

    Listing price determines only WHO looks at the house.  People will only look at houses in their price range.

    If a house is overpriced, it helps other homes in its price range sell.   It will not sell for a long time, and will sell at a much lower price.  If a home is fairly priced it will sell relatively quickly.

    what is the house worth now? That's key - figure that out, then offer a bit less. If they don't care to sell the house for what it's worth, move on.

    If you can't determine the value, get some help from a pro.

    bests,
    -rsr-
    Ron R
    Certified Exclusive Buyer Broker
    4buyers R.E.
    ronrsr@4buyersre.com
     
  24. You have chosen to ignore posts from duffco12. Show duffco12's posts

    Re: Counter offers

    First of all, as a licensed Realtor, I have never let the commission be an issue in negotiations with either a buyer or seller client.  Most agents that I have dealt with are ethical although there are absolutely ones who are just looking at their bottom line.  I work to serve my clients, very often in this market without realizing any commission at all when the client can't find what they're looking for, another buying bids higher on the property or the house they have listed does not sell. 
    As far as lowball offers, I have both received them and submitted them. I always advise my buyers of the recent comparative sales, etc. to assist them in determining a fair offer price but in the end, it is up to the buyer - if they want to put in an offer, I will do it, even if I don't feel it is reasonable.  As one of my sellers stated, after receiving a very low offer on his property "If you don't ask, you don't get".  A buyer never can tell what situation the seller is in and what they will accept.  In this market, the inventory is higher but at the same time there is a lot of "junk" on the market.  It is riddled with short sales and foreclosures and often homes are on the market for a long time which encourages buyers to wait it out if they can't get a home they want.  They feel that they don't need to move quickly because the home will still be available later on at a lower price if they decide they really want it.  It is a tough market to be both a buyer and a seller but things are selling. Price them right to begin with and you will have most likely get an offer you can live with.

    Katie Duff - Realtor
    William Raveis Real Estate
    293 Washington Street, Suite 1A
    Norwell, MA 02061
    (617) 653-8433 cell
    (781) 659-6650 office
    www.raveis.com/katieduff
    http://animoto.com/play/046Q2zkWTnsYc81xAczKhw



     
  25. You have chosen to ignore posts from DougLord. Show DougLord's posts

    Re: Counter offers

    Sellers – unless the offer is for something totally idiotic ($1)  you shouldn’t get insulted by ANY offer.  ANY offer is better then no offer at all.  You don’t have to take it.  You don’t even have to counter offer.  If you have better offers, tell the potential buyer they are way off target and let them counter their own bid if they want to.  If you simply don’t want to sell your house for the price being offered, tell the potential buyer that.  However, don’t get insulted by someone offering you what THEY think the house is worth just becaue: i) you have to sell the house because you got in over your head; ii) you have no other offers; iii) your real estate agent tells you its less them some “comp” sold for 6 months ago; and/or iv) its 50% less then you paid for it. Over the last decade, real estate prices completely disconnected from reality and economic fundamentals.  Because the housing market isn’t as liquid as the stock market, the process of price discovery takes a lot longer following a bubble.  We are still going through the long and painful process of figuring out how much homes are really worth.  Everyone has their opinion, and different methods come up with VERY different values.  Don’t get offended because someone else uses a method that’s different then yours. Let me give you some examples. Since 2000, home prices have mainly been a function of interest rates and lending standards.  This is because we let the idiots over at NAR convince us that homes were investments (despite not producing any goods or income) that could never loose value.  American’s stopped thinking about how much they were paying for a home or how much debt they were taking on, and only focused on “how much home they could afford”.  In 1999 the 30-year mortgage rate was as high as 8.5%.  Today a 5/1 ARM is as low as 3.45%.  That means a $1mm mortgage costs as much as a $600k mortgage used to.  That’s 66% more.  And down payments went from 20%+ to <5% = 4x.  So in that context no one should have been surprised that housing prices increased 105%-125% from early 2000 to mid-2006 (+180% in Miami, +170% in LA, +150% in San Diego and D.C.). But there are other ways to think about it. From 2000 to 2009 the PPI went from 88.65 to 109.77.  That means building a house only got 25% more expensive.  Nominal GDP per capita went up 30% and median wages went up 25%.  By those measures I have difficulty explaining why housing prices are still 40% to 50% above 2000 levels. I’m a renter.  The owners would love to sell their house, but they didn’t have any offers when I moved in.  The price they are asking is 1.5x what I’d be willing to pay.  I don’t even bother making them an offer because I know they would convince themselves I am low balling them.  After all, if I got a 5/1 ARM at 3.45% my mortgage payment would only be 25% more then my rent and after tax deductions it would be 20% less.  And there are “comps” in the neighborhood that make their price seem cheap. But I have my own assumptions.  I use the 30 year rate.  I think Comrade O will take away the mortgage deduction for high-earners.  I think housing prices will only increase in line with inflation while my investments will do 3%-5% better, and I won’t pay more then 15x-18x annual rent because that is historically what the market has been before the run-up (they are asking closer to 25x). 

    My point is, what you call low balling is where the buyers think the market will be in 3 years.  Professional investors don’t get pissy about stock prices being below where we want them to be, we just buy more.  But I’m still glad someone is offering to buy my stocks, even if I don’t want to sell them at that price.

     
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