photo via istock
By now we all know that its buyer’s market. Most buyers are looking for a deal and many are looking for a steal. While there are some great deals out there the steals are few and far between.
These days more often than not when I’m working with buyers and its time to talk about the offer they already have a price in their head and its a low-ball.
Many buyers feel like a low-ball is a good starting point to get to a number somewhere in the middle. Having had the unpleasant task of presenting low-balls to sellers I can tell you that it puts the seller in a negative frame of mind and starts the negotiations off on the wrong foot. The seller feels insulted and usually angry. Sometimes they are so upset they don’t even counter because they don’t want this buyer to have their property. They are mad.
Some buyers have heard that low-balls are okay with foreclosures; that the banks will accept anything. Having listed over 80 foreclosures properties for Fannie Mae I can assure you that this isn’t the case. Most of the foreclosures today are selling at or around market value and those that are selling below do so because they need major repairs.
I typically discourage buyers from making low-ball offers unless through my research I have reason to believe it will be accepted. If the buyer really wants the property its not worth the risk of losing it over an offer that will never be accepted. By thinking carefully about the offer and evaluating the comparable sales I advise buyers to make a reasonable offer.
While it is a buyer’s market, sellers aren’t giving their homes away. Even if the first offer is a “starting point” for negotiations your chances of reaching an agreement are much better if you start from a realistic place.
