We started house hunting in April. The second trip out with our buyer agent, we fell in love with a home but were iffy over it's school district. That day, our agent mentioned a good starting offer would be 120k - 123k because it had already been on the market for 2-3 mths and that they reduced the price a couple weeks prior, from 132,900 to 129,999.
Jump forward: we've viewed over 80 homes (Metro Detroit Area - 78% foreclosures and very few buyers) and have decided to take a 2nd look at this home and make an offer tonight.
We tell him to type up 124,500 with 5k concessions...so that we have negotiation room. We want them to know we're serious but don't want to go in offering full listing price.
He says, "I thought we discussed the risks of low-balling these owners."
Am I crazy? I thought it'd be fine to come in just a little under 10k difference?
PLEASE advise!
My husband's now questioning the agents' confidence and negotiation skills.
2007-05-25 06:06:00 · 11 answers · asked by Teresa C 1 in Business & Finance ➔ Renting & Real Estate
If you have looked at 80 houses you should have a pretty good idea of the market and what things are selling for. I sell in the Cleveland market which is very similar to the Detroit area.
Has your agent given you a buyer's market analysis to show what similar homes in the area have sold for? That would be my first step before I even recommend an offer to my clients. If it is priced close to what other homes are selling for, then yes, you are low balling them. I always tell my offended sellers to counter and their knee jerk reaction is to come down $500-$1000. If your agent knows the market, trust their negotiating skills and their instincts. Your agent has done this far more times than you and can predict how the seller's will react to your offer. You aren't following your agent's advice of an offer of $120K-$123K. You are making an offer of $119,500 by the time you add in your seller concessions.
And while it is a buyer's market, seller's still have to pay off their remaining mortgages in order to be able to sell. Has your agent looked into how much they probably still owe on the home - we can do this here by searching county records.
After your agent has done his/her homework, why not go straight or close to what you really think it's worth instead of angering the sellers.
2007-05-25 06:50:39 · answer #1 · answered by Anonymous · 0⤊ 0⤋
Firts of all you have to keep in mind the the agent, unless you signed a buyer/broker agreement with him, is working for the seller. It is their ethical responsibility to get the most money for the seller as he can. Another thing to remember is that the agent makes the commission on the actual selling price.
With that said, he is also ethically bound to present any "real" offer for the property. He can tell you that he ha wished it be for more, but that is your decision. Be careful how much information you disclose to the agent. He can pass that along to the seller, in fact if that information would help sell the house, he HAS to present.
As an example, if you tell the agent that if they don't take this offer you would increase the offer by $5,000, he has to pass that as information to the seller.
Unless you have a signed buyer/broker agreement youhave no obligation to keep this agent. If you feel that he has been unethical find a new agent.
2007-05-25 06:23:42 · answer #2 · answered by ttpawpaw 7 · 0⤊ 0⤋
I don't know the real estate laws in your state, but you should know who the agent is representing. Some states do have non-agents or transactional agents that don't represent either party. However, if the agent represents the seller be careful in your dealings with them because they do represent the seller, and not you. In particular if they don't owe you confidentiallity then don't say something to them you wouldn't say directly to the seller.
Unless you actually signed a buyer agency contract with this agent, they are not your buyer agent.
I have seen cases where sellers get "offended" by what they consider a "low-ball" offer and refuse to deal with a buyer. (In fact I had this happen to me once with some land I was trying to buy, and they were so "offended" they wouldn't even accept more than their asking price from me.) It doesn't sound to me like your offer would be "low ball" but I can't predict how the seller would react.
2007-05-25 06:48:34 · answer #3 · answered by Michael Iarrobino 2 · 0⤊ 0⤋
Seems as though if the agent forgot about his initial suggestion (120k - 123k), perhaps he just slipped up on the details.
On the other hand, he may not be very professional, and might be putting some pressure on to close the deal and make a greater commission.
I would suggest that you remind the agent about his initial comments and see how he responds. If he goes into denial, it's time to bail out and find a new agent. If he admits his mistake I would stick with him.
2007-05-25 06:21:12 · answer #4 · answered by Michael W 4 · 0⤊ 0⤋
Racheal gives great advice. I personally think your offer is high, I would not offer that much.
But, your agent has access to their morgage information. If they are desperate to sell then you can take the amount they owe and add 10-12% and make that your offer.
MANY buyers would be thrilled to break even, many are selling for less then they owe.
Also, have your agent find out if they are in foreclosure. Their bank WILL let them sell it for a loss. You may find that 100k is perfectly acceptable as the homeowner gets nothing regardless of price and the bank wants to skip foreclosing.
2007-05-25 08:13:38 · answer #5 · answered by Anonymous · 1⤊ 0⤋
It doesn't sound to me like you're lo-balling at all. It's normal in the Vegas market to ask for 3% of the sales price toward closing costs, and then ask for a few more concessions. I don't know the Detroit market well, but I'm guessing maybe you could go as low as 115k. It might be best to listen to your realtor though.
realtor, Las Vegas
2007-05-25 06:10:40 · answer #6 · answered by Anonymous · 0⤊ 0⤋
It's just an offer. If the seller doesn't like it he/she can counteroffer. Perhaps the agent is afraid the seller will be offended by the low offer and refuse to negotiate. Sounds like you have plenty of other properties to choose from if they won't.
2007-05-25 06:15:14 · answer #7 · answered by lurkingonthirtyfourthstreet 3 · 0⤊ 0⤋
now is NOT the time to be selling if you really do not need to sell. market is still near teh bottom - if you can - wait at least 3-5 yrs - on top of whatever you do get right now - you will lose another 6-8% for real estate sales commissions and closing costs - so even it you got 110k, you would only wind up with 102K - and how does that much compare to what you owe on the mortgage?
2016-04-01 07:54:08 · answer #8 · answered by Anonymous · 0⤊ 0⤋
sounds like a very reasonable offer..the seller at that point can then counter your offer with mayb something in between..and if they dont might not be the house for you...your agent should be on board with you to get the most house for the least money...the only thing is he may have seen other offers come in like yours and the seller turn them down..can't hurt for trying and if it doesnt work out and your not confertable with your agent then its important to find another one who you feel is working on your best behalf..
2007-05-25 06:16:09 · answer #9 · answered by becca9892003 6 · 0⤊ 0⤋
Write the offer your way. Certainly there are risks in low-balling, but if the owner doesn't like the offer, they can reject it or counter. It is not a terrible offer.
Hope you get it!
2007-05-25 08:12:32 · answer #10 · answered by godged 7 · 0⤊ 0⤋