One of a real estate agent’s jobs is to act as an intermediary between buyers and sellers. This part of the job becomes particularly difficult when the buyers and sellers don’t appear to be on the same page. One timely example is with low ball offers.
Low ball offers suck. It doesn’t really matter which side of the table you’re on. They just suck. As a buyer’s agent they suck because there needs to be justification for the offer in order to make the sellers even consider it. Some low ball offers are so bad that there really is no justification other than “This is what my buyer thinks the house is worth and what they’re willing to pay for it.” There are no comps that logically make sense to support the low ball price.
As the seller’s agent, low ball offers suck because you want to help the sellers determine if it really will become a viable buyer or not, but do so without the sellers getting offended and refusing to respond. You really also don’t want to waste a lot of the sellers time if it isn’t really a viable buyer.
So it becomes a bit of a balancing act. If an agent submits a lowball offer, I always ask them if they have justification for the offer that I can use when presenting it to my seller clients. Sometimes they do, sometimes they don’t. When I’m representing the buyers in a low ball situation, I always try to make sure we have some comparison homes to use or that there is some other tangible fact we can use to support the low price.
Really, what neither side wants to see is the seller come back and say “Take your offer and shove it.” This may actually happen behind the scenes, but we try not to convey that message because despite the ridiculously low starting price, there may actually be an acceptable overlap between the buyers and sellers. If everyone gets all huffy, we’ll never find this out.
Even when a buyer makes a low ball offer they still, at some level, want the house. They just want to pay as little as possible. It’s definitely in their interest to provide some relevant facts or data to justify the price and in some cases they can perhaps persuade a seller to take an offer they would have otherwise walked away from.
For example, earlier this year I was in a situation where I was representing a buyer that was presented with the sellers “last and final offer” during our negotiations. My buyer did want the house, but did not want to pay more than a certain amount, which was still less than the sellers “last and final offer.” I spent an hour crafting an email with all of the reasons why the buyer was the best person for the house, the reasons why they were offering what they were offering, and just exactly what was going on in the real estate market in their price range in that town. I got my buyer’s approval on the email and sent it off to the seller’s agent. They called me and said, “Wow, that was a really good email! I’ll pass it along to my sellers and have a conversation with them.” The sellers accepted. My buyer ended up getting the house for less than the sellers “last and final offer” because we were able to make a compelling argument.
In the current market climate, it’s important to get buyers and sellers to keep talking if there is some indication of interest in the house. Low ball offers are painful for everyone involved, but sometimes they evolve into something palatible for both sides. You’ll never find out if you don’t remember to keep it civil.
And props to Johnny Paycheck…