All things Sarasota - The Jasmer Group: I JUST RECEIVED AN OFFER BUT I REFUSE TO COUNTER

I JUST RECEIVED AN OFFER BUT I REFUSE TO COUNTER

Have you ever been involved in selling a home where an offer was made and you refused to counter the buyers offer? Here is some advice for sellers to consider, especially in today’s economic environment.

If a buyer has taken the time to put an offer on paper and submit it to your listing agent, I think you would agree that this is a good sign that they are interested in purchasing your home.

Your agent calls and says, “great news, we just received an offer!” They come over to review it with you and you immediately get defensive. The offer price is way too low or the terms of the contract aren’t favorable. These terms could include financing contingencies, a long and drawn out closing date or a request for you to pay some of the buyers closing costs.

Do your best to leave your emotions out of this! Consider this a business transaction that, when completed, will get you to your eventual goal. That goal may be buying your dream home, retiring to a different state or country, downsizing and buyer a less expensive home allowing you to stash some cash, and the list goes on.

I have been involved in a few transactions with sellers who have absolutely refused to counter a buyer’s offer. 9 times out of 10 this is the worst thing you can do! Your strategy is that if you do not counter, the buyer will come back with a better offer in a few days. What!? This is like catching and releasing a fish where there are other fishermen around you and hoping the fish decides to come back to you because you think you have better bait on your hook. Why would you take a chance at losing an interested buyer when there is a lot of inventory for them to choose from? Chances are there’s another home out there that could work for them. You may have a special home unlike any others on the market. If priced properly, maybe holding out is the right thing to do, but that is a big risk to take. Make sure holding out for a better offer is worth the risk.

If you have received multiple offers while listed on the market that you feel have been too low, perhaps your agent is not being upfront with you. There is a high probability that your home is overpriced. If your agent has made you aware of this and you have refused to listen and agree to a price reduction, then you are missing the chance to get your home sold for the best price with the least amount of stress. I have seen more sellers that have ended up in foreclosure, short sale, not selling at all or receiving 20% less than an offer they received months or a year earlier because they held out for a better deal. As an agent, it’s hard to see this happen to a client. The agents best bet is to walk away from the listing if there is no agreement to reduce the homes price. The ability to sell your home depends on you and your agent working together to achieve that goal. If you have done your homework and hired a full time, professional and knowledgeable agent, take the time to discuss your concerns with them, they will do the same. Listen to the advice they have given you. This is their daily job. They eat, breathe and sleep real estate!

They have their finger on the pulse of the market and know what needs to be done to get your home sold.

Make the counter offer and keep the negotiations moving. This may be changing the price and terms, just the price or just the terms of the contract. You may have to go back and forth 10 times to get to a final agreement, but there is a good chance you will come to an agreement if you and the buyer are reasonable along the way. Not countering an interested buyer’s offer is not reasonable!

You may not always like what your agent has to say.  It’s not your agents’ job to agree with you all the time or be your best friend.  There are days you will not like them and you’ll wonder why you hired them. Ultimately, their job is to sell your home.  If that means you getting upset because your agent gives it to you straight, that’s ok.  You’ll thank them and get over it once your home has sold and you’ll be glad they weren't sugar coating anything.  In fact, I have a good feeling you’ll become great friends…

I hope this helps to keep you focused on the ultimate goal of selling your home!

Comment balloon 259 commentsDan Jasmer • August 26 2010 09:34AM

Comments

Dan, I am glad this is a public post!  

Very good points and advice.  It really is a delicate situation and you always hope for reasonable clients but we know that doesn't happen all the time!

Posted by Tricia Hoffmann (Your Home Free) about 8 years ago

You are right....one of the things we are paid to do is to negotiate the best price....sellers give us something to go back with and lets negotiate...

Posted by Dennis Duvernay Broker/Owner (Hillview Realty) about 8 years ago

I ALWAYS encourage both my buyers and sellers to counter until it becomes apparent that neither side is willing to give any more.  We can't always come to terms and agree on a contract but if we are to fail in our efforts I always want it to be the other guy who walks away.  That way I know we gave it our best shot!

Your comments about making this a business transaction are appropriate but as REALTORS we need to remember that we are privileged work in an industry where people trust us with assisting them in what is very likely one of the largest single purchases or sales they will ever be involved in.  Often they are selling a home where they lived as children, enjoyed family gatherings and holidays, raised their kids or watched loved ones die.  Buyers are often trying to find the "perfect" home to do all of those same things.  Don't we as REALTORS want them to "fall in love" with a home?  We are trained to look for that emotional reaction as a sign that they may be ready to put in an offer.  As REALTORS we sometimes talk about and toss around six-digit (or more) figures like it's pocket change and discuss 30 years of indebtedness like it's nothing.  We have to remember that if our buyers and sellers act emotional and crazy, or are offended by an offer or counter-offer, that they have every reason to do so!  This is an emotional decision and really, that's probably a good thing.  It's a wonder they don't act even more crazy, more un-businesslike, than they do!

Posted by Bruce Hammond, REALTOR - Port St Lucie Florida Real Estate Sales (Port St Lucie ReMax Properties in Port St Lucie for sale) about 8 years ago

Tricia and Dennis: Thanks

Bruce: I agree that emotions will always play a part, but it's better if buyers and sellers try to remove as much of that from the equation.  It can cause someone to buy the wrong home at the wrong price and it can cause a seller to lose a lot of time and money.  Trust is a huge component between a Realtor and a client.  Without it, they have little.  I did not mean to imply that the sellers home and memories weren't important, only that there are pitfalls to being overly emotional to the extent that you would walk from a potential buyer.  Many times we become psychiatrists and that's OK.  We are there to listen and provide advice whenever possible.  Our hope is that they understand we have their best interest at heart.  Thanks for adding your perspective!

Posted by Dan Jasmer, Changing the way you look at real estate (Coldwell Banker Residential Real Estate) about 8 years ago

This is important. Some agents take everything personally. The goal is to be objective and do the best for your client while not burning any bridges along the way.

Posted by Melissa Zavala, Broker, Escondido Real Estate, San Diego County (Broadpoint Properties) about 8 years ago

Dan - What an awesome, well-reasoned post! Now if we could only get buyers and sellers and their agents to listen, we'd be all set! :)

Posted by Coleen DeGroff, Haile Plantation Real Estate - Gainesville FL (eXp Realty) about 8 years ago

HI Dan,

Great topic, good post, giving the sellers a little time to reflect, get grounded again and being able to consider the alternatives. It  is important for them to not throw out the baby (the offer) with the bathwater (the realtor).

As long as they do not take out the shot gun, we keep on talking, and offer them options, right ;)

Happy selling

Posted by Peter Pfann @ eXp Realty Pfanntastic Properties in Victoria, Since 1986., Talk To or Text Peter 250-213-9490 (eXp Realty, Victoria BC www.pfanntastic.com) about 8 years ago

Dan,

Yes I am working on a deal now where my buyers, a young couple looking for their first home, made an offer. The list price was 179,900 and they offered 172,500. The listing agent called and said her seller was so insulted by the low offer she wouldn't even counter.

Luckily my buyers really really wanted this house and raised their offer to 177,900. But that set the tone for the whole transaction. We close next Tuesday. Since this is a public post I won't say any more. 

Posted by Ann Cordes, Home Ownership is Not a Distant Dream (Century 21 Randall Morris and Associates, Waco) about 8 years ago

Wonderful Post and I must say yes I have had this happen to me several times. We must remember that the media is telling folks such as this is a BUYERS MARKET and what happens with that they make low ball offers just to see how LOW CAN YA GO does anyone hear the music here are you bending over backwards yet is the bar wobbling any  hold on we are almost there and under we made it to the other side. I tell sellers take it like a grain of salt look at what they are offering and counter back with let's say just a little lower not much just a little lower raise the bar up please it is much easier to walk under don't ya think. But let's walk up to the bar together and raise it up does anyone hear the music here AHHH YES I DO and here we go to the table with a realistic counter offer. If the deal falls dead and the bar just fell off we at least heard the music and know we did not let our emotions get involved in this we are selling a property not a home. Great Post thank you for writing it and enjoy the music see ya soon. Laura

Posted by Laura Filip, What can we do for you today? (Laura Filip Broker , Opening doors for All Seasons of Life ) about 8 years ago

Dan, I agree 110% with you!  I have a seller currently that absolutely refused to counter the buyer's offer because it was too low, "we are too far apart".  I tried reasoning with her over and over again but it did no good.  Now we have lowered the price, as I told her we would have to do, and still no offers.  The worst part, she used to be an agent!

Posted by Lori Mode, Real Estate Made Simple (Keller Williams Realty - Elk Grove, CA Homes for Sale) about 8 years ago

I totally agree that a seller who refuses to counter may well come to regret that impulse!  I've seen lots of transactions come together from starting points that were so far apart that I'm sure nobody involved held out a ton of hope - but bit by bit thru continuing to negotiate - surprise!  We reach a place that everyone can live with!!  Hurray!

Posted by Nancy Conner, Olympia/Thurston County WA about 8 years ago

It is hard to believe sometimes when the transactions close, how horrible that first offer really was.  The smart seller grits their teeth and counters. 

Confidentiality in comments left on a post?  Would you talk about what a house is in contract for in your office with people not involved in the contract?  On the street?  Why online?   Isn't it a good idea when you are tempted to say online

"I am working on a deal now where my buyers....."    Or  "I am working on a deal now where my sellers....."

to resist temptation to post numbers? Others in your market can figure out who /  what transaction  was being talked about.  In my market the sale price is disclosed , becomes public record but the initial offer is never public record here.   I would feel like that was never something I could disclose without buyers and sellers permission, but perhaps Ohio law is different... in a comment not the post.

Posted by Maureen McCabe, Columbus Ohio Real Estate (HER Realtors) about 8 years ago

Dan: If this were the olden days of yore, I'd agree that you should almost always counter an offer. But with so many low-ballers in the market who throw 10 offers at the wall just to see if one sticks, I think there are a lot of times when an offer should be ignored.

Posted by Aaron Vaughn | Builder | Investor, If the deal makes sense, the cash will follow. (Conifer Homes) about 8 years ago

I agree encourage the seller to make a counter, and counter again.  This is what happened with my seller back in the Spring.  The contract was finally settled but a lot of negotiating occurred.  It was necessary to keep educating my seller every step of the way.  It wasn't easy but it was the right thing to do.  It was an unusual property the sellers needed to sell.  Margaret C. 

Posted by Margaret C. Taylor, St Marys/Calvert/Charles MD Real Estate Agent (Century 21 New Millennium MD) about 8 years ago

Fantastic post! I am re-blogging and also forwarding to my sellers.

-- Danny

Posted by Danny Batsalkin, Los Angeles Real Estate | 310.432.5706 (Keller Williams Realty - Beverly Hills) about 8 years ago

I post on another site, a consumer one, and a frequent question is: "There's a house that's listed at $x. How low can I go without insulting the seller?"

Argghh!!

I explain, of course, that the offer should be no higher than the comps (using a CMA run by the buyer's agent), and probably lower. How much lower? It depends on a lot of factors--the buyer's interest in the house, the seller's motivation in selling, the seller's equity (to establish a floor), and so on.

The second point I make is that you're not a mindreader. None of us is. I've known sellers who've been insulted at prices just pennies below their asking price. They already feel they're "giving their house away." And they've put in all these upgrades (few of which add to the value of the house), so they're expecting a full-price offer. On the other hand, I've seen sellers who've been delighted at offers 20% or more below their asking price. Sure, they'd have liked more. But they wanted to sell, and sell quickly. So, will the seller be insulted? Impossible to say.

And the third point I make is that at least you're making an offer. Let the seller be offended at the dozens of people who've looked at the house and not even bothered making an offer. At least you're making an offer. And what's the worst that can happen? The offer's declined or countered? Actually, not really. The worst (sometimes) is that the offer is accepted. That means the buyer could have offered less. (I know, I know. I'm approaching it from an investor standpoint. I'll acknowledge that in the retail real estate world acceptance is far better than an offer being rejected or countered. Still--something to think about.)

So, go ahead and make a low offer. It's an offer, and if the seller is interested he/she can counter, accept, or reject.

I know I've approached your blog posting from the viewpoint of the buyer. But just flip it arround. The point the buyer has to keep in mind is: At least you've got someone who's made an offer. If you want to get upset, get upset at the people who looked and didn't even make an offer. There's no harm in making a counter-offer.

Posted by Donald Tepper, DC area investor helping heirs of inherited homes (Long and Foster) about 8 years ago

I think it all depends.  Sometimes not responding is a really good counter and is heard loud and clear and a more reasonable offer shows up from the buyers. 

Posted by Jo Olson, HOMEFRONT Realty @ LAKE Roosevelt - Stevens County (HOMEFRONT Realty) about 8 years ago

I've had a seller absolutely refuse to counter even though it was where the seller said they would originally sell. Ugh!! Seller countered back at full price, buyers walked only to come back a week later with a better offer. Go figure. In the end the house never sold. 

Posted by Valerie Duncan Stewart, Real Estate Agent-Broker, OKC, OK ((Metro First Realty)) about 8 years ago

Dan, what a great post! I wonder if we should advise sellers about low offers at the very beginning of listing process? To prepare them for this scenario, because it is likely to happen, and it can have a good outcome for everybody involved. 

Also, to add to "how low can I go" topic - it seems that some buyers need and like counteroffers. Gives a sense of a good deal they negotiated, some raw meet they had:) Of course they would have liked to buy at the very low price they offered first, but they might not feel the deal was good enough afterwards - because the seller accepted immediately. And for the seller - it's a starting point! the first step of a ladder, which may go way higher (or may not, of course). Buyer could have offered even less, why not think of that?

Posted by Anna Tolstoy (Coldwell Banker Residential Brokerage) about 8 years ago

Let me say it out loud- I CAN"T stand when sellers don't counter or re-enage. I work with LOTS of buyers and your points I echo. Seller's need to think of this as BUSINESS- with a  highly PERSONAL object- your home.

Remember- you get to be a BUYER too- of course - after you sell.

Very good post!

 

Posted by Mark Smith (Cherry Creek Properties, LLC) about 8 years ago

I think that some of the problem is that if they counter to an offer acceptable to the Seller, they then come back and try to beat you up after the inspection...The Buyer sometimes uses this time to renegotiate to their original offer...urgh!!!  I would, with a very low offer, rather end it up front...

Posted by Anonymous about 8 years ago

Great topic and very well stated!  It is always best to counter and at least try to negotiate.  This is so true when the home has been on the market a while and has had no other offers.  Better to at least try than to cut off your only source of oxygen before taking a breath...

Posted by Tammi Copsey about 8 years ago

Putting together a counter, or even putting out a counter that says "improve this term and that term" is better than nothing at all. Having said that I just got an offer for a listing with 100% owner financing, despite telling the buyer that we needed at least 20% down. (A pre-emptive counter). What should I do? Reiterate? Recounter?

Posted by Garreth Wilcock, Homes at Mueller (Sherlock Homes Austin) about 8 years ago

Dan,

I make it my #1 goal not to let a deal die on my end. I always get me sellers to counter something.

Posted by Mike Frazier, Northwest Tennessee Realtor (Carousel Realty of Dyer County) about 8 years ago

I have been involved in a few transactions with sellers who have absolutely refused to counter a buyer's offer. 9 times out of 10 this is the worst thing you can do!

Hi Dan,

Excellent point.  It's human nature for us to be emotional about our home sweet home.  I hope your post helps some sellers focus on their real goal - selling the property and moving forward.

Posted by Bruce Brockmeier, Coached By Crouch (Internet Marketing Consultant to REALTORS®) about 8 years ago

Thank you to all that have commented!  My main point is to keep the ball rolling.  Each transaction will be different, each area of the country we work will require different strategy.  For us, inventory is still higher than we would like, so a counter is necessary.  If you don't why even list the house for sale?

Hi Gareth, I would re-counter with your sellers needed terms or find out if he would be willing to take 10% down.  It sounds like your buyer may not be able to come up with the $$!  Best of luck.

Posted by Dan Jasmer, Changing the way you look at real estate (Coldwell Banker Residential Real Estate) about 8 years ago

Very good points, even though I am not a Realtor, i can appreciate a lot of what happens on your side of the fence...

Posted by Phil Stevenson, CRMP, Reverse Mortgage Expert in Miami and Florida (PS Financial Services 305-791-4874 or 888-845-6630) about 8 years ago

When I started, the one thing I remember was to never ignore an offer...  always counter...  You never know what the outcome will be.  Great post!

Posted by Chris Alston, Silicon Valley, California (Chris Alston (Keller Williams Realty, Silicon Valley, California)) about 8 years ago

I instruct sellers to counter if you are not happy. Its just an offer, they didn't say that, they wouldn't pay more.

Posted by Rob D. Shepherd, Principal Broker ABR, GRI (Windermere/lane county) about 8 years ago

On my very first listing, years ago, I received an offer that was way below asking. Now...I was new. I did not do the best job on pricing. The house had challenges of its own.

I called my mentor and asked for suggestions. He said to make sure to issue a reasonable counter offer - in all cases. The counter offer serves to determine the legitimate intentions of the buyer. If the next round of counter is still ridiculously low, there may be nothing there. If there is no response, maybe the buyer was simply a low-balling, bottom fisher. If a reasonable response comes back, maybe the house sells.

Not countering an offer that is unsatisfactory guarantees only one thing - the house does not sell.

Posted by John Juarez, ePRO, SRES, GRI, PMN (The Medford Real Estate Team) about 8 years ago

I have had that happen to me twice already this summer!  I tell them I have closed $50K gaps in negotiations before... and still my stubborn sellers resist. 

This is not the kind of market where I would advise a seller to be extremely inflexible.

Posted by Julie Ferenzi, Julie Ferenzi (john greene Realtor) about 8 years ago

Dan - Well written post and congrats on the feature. I always say "blame the market, don't blame your agent"!

Posted by Christianne O'Malley, Exceptional Service - Delivering Results in Reno! (RE/MAX Realty Affiliates) about 8 years ago

That's like giving up before you even try. Anyone who did this I would really question their motivation to sell.

Posted by Corinne Guest, New Homes Specialist (Barrington Realty Company) about 8 years ago

Dan,

Good post! those are true words you spoke and should be read by all sellers

Posted by Malik Crichlow, Maplewood,SouthOrange,Union Real estate (GoodBuy Homes NJ Essex & Union County Real Estate specialist) about 8 years ago

I would advise my client to counter at least to see if the buyer is serious, or just a lowballer. A conversation with the buyers agent, asking them to support the offer with comps can also help.

Posted by Bill Travis, Broker/Owner (Captain Bill Realty, LLC) about 8 years ago

Hi Dan,  Keeping the seller's emotions out of the negotiations is critical.  Engage, engage and engage some more !

Posted by Bill Gillhespy, Fort Myers Beach Realtor, Fort Myers Beach Agent - Homes & Condos (16 Sunview Blvd) about 8 years ago

I had this happen 2 years ago. My seller had an immaculate lake home, on Lake Oconee, but it was an older contemporary home with only 2 bedrooms for $524,000. We received an offer for $480,000, which I thought was a decent starting point. The seller was very offended, and said he would not waste his time making a counter offer. I called him  and discussed making a counter offer. He was uptight, and said "What do you want me to do?" I said just make a counter offer, even if it is not coming off very much. At least it will show movement on your part. If we did not make a counter offer, the selling agent said he would never bother showing it again! Well, the seller came down a few thousand dollars, and we ended up with a contract, and closed! I bet he is very glad now that he sold, since he wouldn't get that price now with all the better deals on the market!      

Posted by Alan Kent, Lake Oconee Real Estate (Keller Williams Realty Lake Oconee ) about 8 years ago

You won't sell a house if you refuse to counter.  Buyers are being cautious.  You don't know how high they'll go until you counter.

Posted by Tammie White, Broker, Franklin TN Homes for Sale (Franklin Homes Realty LLC) about 8 years ago

I'm not seeing this behavior as much since the market slowed down.  It used to happen all the time.  Great post!!

Posted by Chris Grus, GRI, e-PRO (Premier Realty Exclusive) about 8 years ago

Never say NO. It kills possibility. Err on the side of possibility and counter. Always. 

Posted by J. Philip Faranda, Broker-Owner (J. Philip Faranda (J. Philip R.E. LLC) Westchester County NY) about 8 years ago

I had the oopposite happen a few weeks ago. I got a low offer on one of my lsitings, the seller countered it, and the buyer walked away. Guess they have too many options.

Posted by Barb Szabo, CRS, E-pro Realtor, Cleveland Ohio Homes (RE/MAX Trinity Brecksville Ohio) about 8 years ago

I don't agree that a counter offer is always warranted.  I've had too many listings where the offer was 20% or more below the asking price and the buyer was fishing for a deal.  If the offer is a little low, then yes, it's worth countering.  However, the bargain hunters aren't worth talking to. They won't come up to a reasonable price and all that will happen is my clients will get frustrated.

Posted by Bryan Robertson, Broker, Author, Speaker (Intero Real Estate) about 8 years ago

Great post, always counter, it's the only way to have a reasonable business negotiation. Maybe buyers are fishing for a deal but there are just as many unrealistic sellers on the market too!

Posted by Christa Ross, Helping you buy and sell Pittsburgh's Best Homes (RE/MAX Select Realty - REALTOR and Green Homes Specialist) about 8 years ago

Dan  - it seems this issue is always out there, and sellers need to be reminded that taking the no-negotiation approach will generally not work. From what I have seen buyers these days expect it, but they are also often willing to walk the other way since there are other choices.

In a real sellers market this might work, but then you won't likely see offers below asking once buyers know how the market is acting.

You just never know what a buyer will do.

Jeff

Posted by Jeff Dowler, CRS, The Southern California Relocation Dude (Solutions Real Estate ) about 8 years ago

I agree with you Dan.  I always tell my sellers to respond, in some fashion, to an offer and to keep emotions out of it, since this is a business transaction.  Any offer, these days, is a good offer and even if the offer is low, a deal can still be made, as long as sellers don't get defensive.

Posted by Ellen Kippel, Licensed NY and NJ realtor 914-588-2365 (Weichert Realtors) about 8 years ago

I agree with you Dan.  I always tell my sellers to respond, in some fashion, to an offer and to keep emotions out of it, since this is a business transaction.  Any offer, these days, is a good offer and even if the offer is low, a deal can still be made, as long as sellers don't get defensive.

Posted by Ellen Kippel, Licensed NY and NJ realtor 914-588-2365 (Weichert Realtors) about 8 years ago

Been there Dan.  Great post.  May I re-blog this?

Posted by Bernice Dubon, Calgary Alberta Realtor (RE/MAX First 403-607-9117) about 8 years ago

Excellent points, Dan.  I actually have a page on my website at JudyGraff.com titled "3 Ways Sellers sabotage their sales" which goes into this.  Any AR members, feel free to use the text there.

Posted by Judy Graff about 8 years ago

Hello and thanks for all the feedback.  It has been great reading all your comments and I greatly appreciate being part of this network. 

If the seller thinks it's priced so well, they should have received a solid offer within 30 days.  Even in our market (SW Florida) this is happening.  If it's that good of a deal, someone will jump on it.   Sure there are plenty of bottom feeders looking to steal property, but most buyers have been brainwashed into thinking this because of what they hear in the media all day long.  The buyers are taking a chance- why don't you, as the seller take a chance as well with a counter!  So what if the buyer walks, at least you tried and you can move on.  Right?

As far as the seller becoming frustrated, I bet money that they would be more frustarted with NO offers, than a few low ball offers.  If you're getting that many low offers the house isn't worth the asking price or there is something that buyers can not overcome about the home.

Bernice- absolutely!

Posted by Dan Jasmer, Changing the way you look at real estate (Coldwell Banker Residential Real Estate) about 8 years ago

I have had sellers refuse offers and counters and then go on to get less.  I had one couple that refused an offer that was 15k less than asking and felt it "insulted" them.  They ended up never seller because they got caught in the market going down.  Eventually, it resulted 2 years later in a short sale and they were mad at me because I wasn't more insistent about them countering or taking the original offer!

Posted by Stefan West, Temecula-Murrieta-Menifee CA Real Estate (West Realty) about 8 years ago

Dan--Well said. My mantra to sellers is to always make a counteroffer. Even in the unlikely event that they got a price that they would be willing to accept, a counter is still in order. Don't want the buyers to think that maybe they could have offered less. In any event though, we have to keep the conversation going.

Posted by Buki Burke, (805)377-0236, Berkshire Hathaway Home Services CA (Ventura, California) about 8 years ago

Agreed, ALWAYS make a counter, even if it's back at full price or a small concession.

Posted by Danny Dietl, Buy, Sell, Lease - iMetroProperty.com (www.dannyrealestate.com) about 8 years ago

Spot on Dan.

Posted by Mike Morrison (Will & Will Real Estate Brokers, The Woodlands, Texas) about 8 years ago

Dan,  Great and timely post!  Just had a difficult one and had to REQUEST a counter.  I was told that the sellers were not even responding to "low" offers.  Although this ended with no agrrement in price, we did our best to present the clients desires.  My hope is that in this case, the sellers will recognize that they must be realistic about this market. 

Posted by Laurie Lohoefner about 8 years ago

Sellers often do not let us do our job.  They do get defensive and a lower offer is more difficult unless the agent can provide recent sold comparables to justify their price.

Posted by Karen Feltman, Relocation Specialist in Cedar Rapids, Iowa (Cedar Rapids/Iowa City, IA KW Legacy Group) about 8 years ago

Good post. Some buyers make verbal low ball offers . I always suggest that they put it in writing .

Posted by Gita Bantwal, REALTOR,ABR,CRS,SRES,GRI - Bucks County & Philadel (RE/MAX Centre Realtors) about 8 years ago

Thanks all!

Judy- thanks for sharing

Karen - If I represent a buyer and the home we are offering on seems overpriced (I usually don't show these anyway because I know where they will usually lead), I will always submit a buyer CMA with the offer.  You don't have to get into adjusting the comps, just a brief CMA to illustrate the offer price.  It helps.....sometimes!

Gita- it's natural for us to want to bypass the paperwork when someone wants to submit a low offer.  I'm learning that if you put it in writing, the seller is more inclined to think the offer over and react in some way. You also make the buyer show they're in fact serious about buying.  A buyer who does not want to take the time with the paperwork, may not be a "real" buyer.  Good point.

Posted by Dan Jasmer, Changing the way you look at real estate (Coldwell Banker Residential Real Estate) about 8 years ago

Totally agree, Dan.  I always tell my Seller clients: "Why slam a door shut" on a potential deal.  If it's a ridiculously low offer, my advice is for the Seller to try to check his/her emotions and respond as if it was a more realistic offer... keep their own bottom line in mind, instead of someone's unrealistically low offer.  Oftentimes, the Buyer is just throwing something out there to see if it will stick... otherwise known as dreaming!  If they're seriously interested in the property at a reasonable market-appropriate price, they'll usually come way up from their "low-ball" starting point.

Posted by Chris Jenkins-Sarasota Realtor, "Expect Success" (PalmerHouse Properties) about 8 years ago

It's amazing how sellers beg for offers and once they get one, they dig their feet in and refuse to negotiate and become hard to deal with.

Posted by Mary McLean about 8 years ago

Always counter offer or accept an offer. PERIOD.

That being said at the listing appointment I spend a good deal of time covering this issue. I start with what listing price it will take to get traffic. Without traffic you will not sell. The price I believe they will ultimately get for the home. Last but not least the offer price they will likely see at some point (this is usually a drastically low price) in an offer. This opens the discussion for how we will handle this type offer. We will counter until we all decide we can't get together on the details.

 The real issue is that to many agents take (way) over priced listings. I believe when you take a listing that you know is overpriced you have in essence "agreed" with the seller that the "agreed upon list price" is a possibility. No matter what you said during the listing discussion all they remember is that you "agreed" to list it at the "agreed upon price." It's right there in you documents!

When you miss the original list price versus the final sale price by more than 10% your credibility is on the line with that seller. Will they ever trust you again with their business or the business of their friends? Nope!

Bill

Posted by Anonymous about 8 years ago

You can lead a horse to water, but . . .

Posted by Peggy Noel, Bouchard, ABR, CDPE, SFR (RE/MAX Commonwealth) about 8 years ago

awesome post for reading while having breakfast!  Thanks for the reminder to being ready for the offer (having your sellers educated at the beginning of the listing and being prepared with the counter before you even have an offer)

It certainly helps with taking the emotion out of a buisiness transaction.

Posted by Robert Jarvis, MBA (Keller Williams, Chicago, IL) about 8 years ago

Thank you so much for this post. I am going to save it. I agree with the agent that said the sellers should be unhappy about all the buyers who did not make an offer. Always have the seller counter. You never know where it will go. You have to stir the pot! I feel that the asking price and the first offer price don't say much about the seller and buyer. It's in the first counter that you really get to know where people stand. How much the seller comes down in price with their counter speaks volumes and the same with the buyers counteroffer. Only when these counters happen do you really know whether the negotiating will continue. But you have to go thru the first round of counters.

 

 

 

Posted by Margaret DelColle, Margaret Barnes-DelColle (Coldwell Banker Preferred) about 8 years ago

Dear Dan:

 

Great post.Thank you for writing it and sharing with all of us.

I agree with every point you made.

Awhile ago I was representing a Buyer and the Seller didn't want to counter.. so we had to cancel the contract.2 weeks later I was looking for another home for my Buyers when I got a call from the Seller's Agent telling me that they've changed their mind.

Now we are under contract and the Closing is coming up.

 

Posted by Monika Phillips, PA (Keller Williams Realty Palm Beaches ) about 8 years ago

Great post, Dan! 

An offer, no matter how rediculous you may feel, means the buyer is serious about buying the home.  Offers are negotiable.  Eventually both parties will come to an agreement.

Brigita

Posted by Brigita McKelvie, Associate Broker, The Broker with horse sense and no horsing around (Cindy Stys Equestrian and Country Properties, Ltd.) about 8 years ago

I have just received an offer from an investor group that did not see the house, not even a preview from the agent, they throw the offer and say it's cash and that is the reason for the 50% less offer. I have explained that we are 20% under the estate appraisal and the offer is refused from the seller. Our board contract does have a sign off on the offer to indicate that the offer was presented. So I've covered myself.

I don't think it's a viable offer--it's just a low ball. There is no one to talk to If the offer was within a median range of the neighborhood, this offer is considerably lower, but it is their offer.

Jan

 

Posted by Jan McNulty (RE/MAX Suburban) about 8 years ago

I had the same stuation happen to me.  But 2 weeks later some new Buyer previewed the home and made an offer the Sellers countered and the counter offer was excepted.  So in the end it workd out.  But I always tell Sellers to counter because you never know.

Posted by Katrina Lee (City Choice Realtors) about 8 years ago

Good article!  You are right educating our sellers on the best way to proceed is one of the hardest parts of our job.  I sometimes wonder if sellers are reading the news when they say "it's worth more than that!" or "I can't sell it for that".  Even when I have been telling them we need to adjust the price. 

Posted by Steve Mallett, Dripping Springs Real Estate Agent (Mallett Integrity Team) about 8 years ago

I agree 150%. It is very difficult for most sellers to remove the emotion (and a lot of times their ego)  from the sale of their home. Before I list a home I try to drive home the thought that the seller should try to view their home as a product on a shelf at WalMart (or Macy's!). ANY offer should be taken as a complement that someone out there likes the home. EVERY buyer in today's market is out to get a 'deal'- they watch TV and read the headlines and feel that they should be getting a deal. Of course you have to EXPECT that there will be low ball offers. Preparing sellers as they list the home that this will happen i think helps if/ when it does happen.

Sellers should price their homes where they want to sell. Period. That gets buyers through the door and then if it is priced well can be perceieved as a bargain. I just closed a deal this week on a property that was listed at $495K. Buyers came through with a starting offer of $385. (Yep- $110 under). My sellers were insulted and didnt want to counter- I encouraged the opposite and advised that they had to come back with SOMETHING. We countered back and forth for 4 days. Property sold at $485K with no other consessions. Days on market? 30!

 

Posted by Deelyn Neilson (Liz Moore and Associates) about 8 years ago

So many times people are so unrealistic!!  Just closed one that I thought I never would get done because the seller was so out there.  Always counter!!

Posted by Suzanne Gantner about 8 years ago

How come no one gets upset at all the buyers that didn't make an offer

Posted by Rob Aubrey about 8 years ago

At the least, counter back at full price.

Posted by Jim Pirkle (Harvest Realty LLC) about 8 years ago

To take it one step further, I tell my sellers upfront the odds of getting an 'insulting' offer are great in this market. But I gain agreement, up front, that they will not let it offend them and we will do our best to reach our 'happy spot' for both sides. It seems to take the sting out of it before  it really does sting!

Posted by Donna Bosze about 8 years ago

when taking a listing I also have the conversation with my sellers that no matter how ridiculous an offer appears to always counter back. You never know what the out come may be. I explain if they refuse to counter we have a good idea of the outcome and that is not the sellers goal. Thanks for sharing.

Posted by Raylene Estabrook (Signature Homes Real Estate Group) about 8 years ago

We had this happening with our buyers: the seller didn't counter! We knew from the listing agent what his bottom line was but he didn't counter. Just didn't do it! After our first offer, he actually raised his bottom line. It took us 3 more offers (not counters) to get him to sign the contract. He didn't have to sell, he kept telling us. Another problem was: the listing agent had promised him to get x amount for the home. That didn't happen so I guess he was pissed and played hardball. It worked out to his favor so far, we are waiting for the appraisal this week.

Posted by TheMillsTeam YourSebringRealtors, 863-212-5441 (Advantage Realty #1) about 8 years ago

I agree - countering an offer is so easy, and it doesn't take the house off the market or cause any other negative impact - what's the problem? You've written a good post here for today's home sellers.

Posted by Joetta Fort, Independent Broker, Homes Denver to Boulder (The DiGiorgio Group) about 8 years ago

Dan,

Great post!   An offer begins a new part of a seller's letting go.   This can be a very emotional process made even more difficult if the offer is a low one.    As realtors we often have to work thru both parts of the process and often in a short time frame.   Most always,  even if an offer is low,  it is worth it to counter.    If buyer is serious,  they will often respond more in line.   If not,  at least you gave it a try.

 

Posted by Sandra Ormerod (Sotheby's International Realty) about 8 years ago

Fantastic blog!

Posted by Brian Rich (Coldwell Banker Tomlinson Group) about 8 years ago

Good advice for sellers out there! Sometimes it is hard for sellers to try and remove the emotional attachment. They need to, that's all there is to it!

Posted by Anonymous about 8 years ago

Dan this is a great reminder for our sellers that we have a fiduciary duty to present all offers. Emotions and ego have ruined many deals, but if you can take a step back and think logically and counter any written offer, the sellers are more likely to actually SELL their house.

Posted by Troy George, Real Estate Broker - Colleyville/Southlake - (817- (Colleyville, Texas Real Estate Expert - Synergy Realty) about 8 years ago

Excellent post.  I ALWAYS recommend a Seller to counterif the offer is unacceptable.  If you explain to the Seller, if put in the Buyer's shoes, they are just trying to see what they can get.  The media coaches constantly that Buyer's can call the shots.  I've not had any issues with Sellers when I implement this with them.  It helps pull it back into perspective for them.

Posted by Debbie White, Your K C Realtor (Reece Nichols) about 8 years ago

Always look at an offer as an opportunity even it is low.  The buyer may just want to see how you will react. I remember seeing a special about private Islands and one Islands was owned by Richard Branson of Virgin Atlantic, records, mobile ect fame.  Richard made an initial offer for the island of around 8,000 dollars but would up paying a few million for it.  Why did he offer 8k at first who knows but he would up buying it in the end............

moving moving keep atlanta moving

Posted by moving about 8 years ago

Dan,

I agree to an extent, however our market in Oklahoma has not been badly beaten down like others yet buyers think offering 20% under asking price is OK and it really isn't.  That's the best way to get the door slammed in your face, especially if the home is nice and priced right.

Yes there are exceptions but buyers have to be a little smarter if they want a chance to actually buy the home they want.  It just never ceases to amaze me the offers that come in.

How are things in Florida?

Posted by Russell Benson (Berkshire-Hathaway HomeServices/Anderson Properties) about 8 years ago

Dan;  Kenny Rodgers comes tomind...Know when to hold em and when to fold em, but you can't be in the "game" unless you play the cards you are dealt.  OK; a bit corny and I am not a huge country fan nor a game player, but... I do agree that you need to present any and all offers, if for no other reason, to enlighten your sellers as to what buyers are thinking in the current market and of their propety and pricing.  aloha,

Posted by Pamela Deery (Hawaii Life Real Estate Services LLC) about 8 years ago

From the Seller / Asset Manager perspective I have to disagree with you 100%.  If an offer is out of the ballpark, then it's out of the ballpark.  Assuming the agent did their job right, the property should be priced appropriately.  After that, an offer is going to make sense and be close enough to negotiate or it isn't.  The concept of countering every offer that comes in is absolutely silly and a waste of time.  Sometimes it is best to just say no and move on. 

Maybe the consumer market is different, but when you're dealing with trustees, receivers and commercial workout officers there are a lot of offers that are simply rejected.  If it is way off the reservation there is no response other than a verbal "try again".

Posted by Rich Kruse (Gryphon USA, Ltd.) about 8 years ago

I try to educate my clients as to you never know what the other side is thinking. Keep it alive to at least find out what the otherside is thinking. Kind of a chess match sometimes. This holds true when banks counter offers on Short sales and REO's. At least give it one round you may get a KO.  

Posted by Surprise Arizona Realtor Jim Braun Sun City Grand Active Adult Communities, Surprise AZ real estate Phoenix West Valley (Coldwell Banker Residential Brokerage Jim Braun Sun City Grand Az ) about 8 years ago

Boy you hit a "hot button!" Especially in this market...the offers are almost insulting, but again, an offer is an offer and it's important to work through it! Great post!

Posted by Mary Opfer about 8 years ago

Dan,

For clarity, you might want to consider removal of what appears to be a double negative:

"Not countering an interested buyer’s offer is not reasonable!"

I think you meant to say, "Countering an interested buyer's offer is not unreasonable!"

Other than that, a great post!

Posted by Art Lane (Long and Foster Real Estate, Inc.) about 8 years ago

Dan, you nailed it. 

I have been on the buying side on a few occasions where homes have been high-ball priced and the initial reaction to these offers--fully substantiated with a thorough analysis--is that my buyers are not serious.  The scary part about this is that the listing agents were injecting their opinion and their strategy not to counter into the negotiation, telling their sellers that the buyers couldn't possibly be serious.  BAD idea, especially in this market. 

On the flipside and coincidentally, we just took in an offer yesterday evening and the sellers were fuming.  One of them asked our team why we would even present such an offer.  Our role is to eliminate the emotion and get the business transaction together.  We have learned to explain to our sellers at the outset that buyers might be coming in with low offers and that they shouldn't be offended.  This usually helps keep them focused when a somewhat unattractive offer comes in.

Posted by Tim Klingman, President (North Shore Homes, Inc. (Milwaukee, Wisconsin)) about 8 years ago

Great post.   I was thinking about blogging with the question of how low is to low?   I loved your point about if they take time to put it on paper they are interested.    Even for a very low offer a counter is expected - to start the process and determine what is most important in the transaction to the other side.  

Posted by Gray Winn, New Home Specialist in Madison AL and Athens AL (RE/MAX Legacy) about 8 years ago

I just went round and round on a REO.  The bank countered back three times at same price! Ultimately, buyer and seller came to an agreement and COE happened last week!  Communication is KEY!  Nice public service to have this post available, thanks Dan!

Posted by Cara Marcelle Mancuso, Call a Marana neighbor, I'm THERE! LONG REALTY (Long Realty - Dove Mountain, Marana AZ) about 8 years ago

No truer words have been said in this evolving market place

Linda Marshall Realtors

Innerloop Houston Texas

Posted by Linda Jamail Marshall about 8 years ago

Great post on keeping the "fish on the line" as long as you can. If the home is priced right and you have an interested buyer, it is your negotiating skills that will close the deal. 

Posted by Brian Clayton, Real Estate Agent - Houston (Moudry Real Estate Advisors) about 8 years ago

I think it helps if the listing agent prepares the seller for all the things that might happen (like low offers) so they have time to reflect on it instead of flipping out when it happens.

Eve in Orlando.

 

Posted by Mike & Eve Alexander, Exclusively Representing ONLY Orlando Home Buyers (Buyers Broker of Florida ) about 8 years ago

agree with the post 110%, had it to happen more than once and it is frustrating. Also Lori and Bruce, regarding the one instance being a past agent, Realtors make the worst customers!!!

Posted by James C. Jones, PA (Century 21 Sunbelt Realty #1) about 8 years ago

In this market I prepare my Listing Clients upfront when I take the listing . " Understand that you may get a lowball offer" You must not take it as an insult. Alot of the homebuyers are looking for bargains now. They will try to get your property for as low as they can. However you have the right to say no. It is my obligation to bring you the offer and guide you in the process.

I make sure they understand this clearly. Doing this upfront is prepping them for reality if it should occur. Then when it does we deal with it they counter "but have the right to reject any offer".

This has worked for me ! As far as the unrealistic sellers . It does me no good to keep inventory that has no potential to sell. It harms the seller and me as  an agent. Thats why the key is to get it all out in the open during the listing appointment .

 

Posted by Lillian Nolloth (Howard Hanna Real Estate Services) about 8 years ago

I can never see the harm in countering. It only takes a few minutes of the sellers time and you just never know where the negotiations will end up. Negotiate until the the deal is either acceptable or dead and buried. Then dig it up and try again.

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) about 8 years ago

I just had this from the otherside.  My Buyers really liked this home. They wrestled about making an offer.  The home had not been on the market for even a week.  They made a pretty good offer.  And the Sellers flat out rejected the offer.  No counter. Just No.

Not sure what planet they were on but in the zip code where the home is located values have dropped better than 30% in the past 3 yrs.  The neighborhood within a mile of the house has generally dropped more than 50%.  Our offer still came in above their original purchase price during the bubble 6 years ago.

With my Sellers I always say "we always counter, we never reject no matter how much you don like the offer."

Posted by Rick Fifer, Broker/Owner, Vintage Homes Realty (Vintage Homes Realty) about 8 years ago

Totally agree, ANY offer is good and should be countered...

Posted by David Evans, HUD NLB Cumming GA (RE/MAX TOWN AND COUNTRY) about 8 years ago

I wanted to add that many agents don't know how to poresent offers to their sellers/buyers. Why do we call an offer "low" or "low ball"? Why not just present iot as an offer. We do not need to interject our opinion on the offer unless it is asked for.  

Posted by Bryant Tutas, Selling Florida one home at a time (Tutas Towne Realty, Inc and Garden Views Realty, LLC) about 8 years ago

I always tell my sellers, "Buyers don't know if they don't ask."

I tell my buyers to keep this low offer in mind when they get an offer this much less on the home they are going to sell. Last one was $80k under asking price. Didn't fly, by the way.

IF the seller did accept the ridiculous low offer, wouldn't the buyer think he should have offered less?

Posted by Donna J. Stephens, CRS (BHHS Ambassador Real Estate) about 8 years ago

Nice Post.  I have the same problem sometimes on the commercial side.  I have one client that has refused to counter twice.  The offers were a little low (but his asking price was way to high), but they still always deserve a counter.  We represented both the tenant and landlord on one of the offers, and just closed with the tenant on another space (a nice deal for a 10 year lease).  Now months after refusing to even counter on offers, he complains that his space is not being filled (and we keep telling him his price is too high, but refuses to lower it).  It's a shame that some tenants just don't take our advise.

Posted by Paul Piedra, Commercial Real Estate Specialist (Sabre Realty Group, LLC) about 8 years ago

Dan,Thanks for the blog it was very informative.I was taught to consider every offer and to weigh all options as it pertains to negotiations of the price and terms of the contract.thanks jhaz.

Posted by jimhazell about 8 years ago

I always encourage people to counter offer.  Even if it is just by dropping the price $100.  Give them something.  You never know what a buyer might be thinking.

Posted by Rob Arnold, Metro Orlando Full Service - Investor Friendly & F (Sand Dollar Realty Group, Inc.) about 8 years ago

I've had this happen several times.  In fact, the very first offer I presented as an agent representing the buyer.  We offered 97% of asking, and the buyer was insulted.  The listing agent called me back after the presentation, and she apologized for her clients behavior.   Sometimes the sellers are way overpriced, and they feel that their home is special compared to the other homes in the market.  Unless it's cash, we have to sell it again to an appraiser.... 

 As a listing agent, I've only had to flat out reject an offer once, and that was a $500K offer on a home listed at $819K.  My sellers put the offer in the shredder, and refused to even sign a rejection.

Posted by Geoff ONeill (John L. Scott Medford) about 8 years ago

When I read your "bi line" I was going to argue with you a little... you rascal. Then I see you were not advocating that... good post. You did get our attention.

I've bought and sold hundreds of properties for myself during the past thirty years and as an appraiser we see this all the time. What is "market value" if it isn't the give and take of negotiations. The negotiation is the counter offers. You hit the nail on the head Sir... How do you know what the bottom is unless you make an offer and have it countered. I have had some tell me that they won't counter as they felt the offer was too low in the first place, only to buy it for less a month or two later. 

Posted by Mike Young, FHA 203k Consultant 916-758-1809 (203kOnLine.com, covering the USA) about 8 years ago

What a great post!  always learning! Thanks for sharing some wisdom today!

Posted by Greg Jones, Greg Jones, YOUR REALTOR (Century 21 Rauh & Johns) about 8 years ago

BANG!....That's the sound of a seller shooting themselves in the foot by not responding.

In our area many buyers are just "fishing" to see how low a seller is will to go.  All buyers want to get "the best possible deal" so they start low just to test the waters. 

It can be VERY offensive to the seller, but should not be taken personally!  As long as your negotiating, there is still a chance to work out a deal.  When you stop negotiating you definitely will not!

I talk about this with all of my selllers in advance so they surprised by it.  As such, we ALWAYS respond and I have had many deals that ultimately closed at a price much closer to the sellers asking price. Keep talking!

 

Posted by Gayle Barton, Forsyth County Real Estate, Cumming GA Homes For Sale (404) 710-0204 (BERKSHIRE HATHAWAY Georgia Properties) about 8 years ago

There are times to negotiate an offer, and there are times not to even negotiate or respond to an offer. I agree as a general rule, you should always negotiate an offer to bring the parties together to a win-win situation and a closed transaction. But there will be the odd time that the offer is not serious, or that the intentions of the buyer are not very responsible or honorable, or clearly 'abusive'. My fudiciary duty is to protect the best interests of my client, but not necessarily to deal with idiots that are just doing things for fun just to see 'what would happen'.

Case in point, I had an offer last week on a listing at 50% (and we had the lowest price/sf already) of the list price and terms and conditions that were just ridiculous. I interviewed the buyer-agent, and his only response was that 'you won't know until you try'. So I countered on the phone informally to bring the offer some sort of level and never heard back from the buyer-agent.

Posted by Richard Bazinet /MBA, CRS, ABR, Phoenix Scottsdale. Sellers, Buyers & Relocations (AZuRE Team - Realty ONE Group) about 8 years ago

Pricing will always be second guessed. If you're offer is immediately accepted, you'll think that it could have been lower. That scenario plays out from both sides of the ledger.

There are a LOT of low ballers who just throw offers at the wall, to see what sticks (to quote an earlier post). Seems like it will waste a lot of time to deal with them, but it will depend on your market and your situation.The job of a Realtor is to negotiate the best possible price, not necessarily the quickest sale, and many Realtors don't seem to understand that.

Sometimes an offer comes in that doesn't even warrant a response. At worst, send a message by countering at or above the original price.

Posted by Curtis Newport (Newport Enterprises, LLC - VA, MD, DC, WV, PA) about 8 years ago

Dan,

A superb and timely post!

 

Frankly, I think more Realtors need to say, "NO" to Sellers who refuse to counter-offer.  When I say "NO" I mean, cancel the listing contract.  Too often, we salespeople get caught up with this idea that if we have a lot of prospects we have a lot of sales and thus a lot of money.

 

Tom Hopkins taught all of us: only a qualified prospect puts money in our pockets!  The Seller who is unreasonable, overly-emotional, won't counter-offer, won't listen to reason and otherwise works contrary to the professional Realtor's advice is NOT a Seller and thus is NOT a listing.  Cast that listing aside, say, "NO" because you really don't have a listing, do you?

 

tcurranmortgage

Posted by Trevor Curran, tcurranmortgage (PowerHouse Solutions, Inc.) about 8 years ago

Great article!  This type of information should be given to all sellers before listing their home.  It is a challenging market and it is always helpful when a third party is able to convey the same information you have been trying to give to your client.  

Posted by Sara Miniman about 8 years ago

Great post! If a seller doesn't counter, my feeling is that they really don't want to sell and I'm just wasting my time. At least move off your postion a little bit. Show the buyers you want to work this out. It will at least keep both parties in the game for a bit to see if it will work.

I like your post so much, I'm going to reblog it. Congrats on the featured post!

Posted by Sharon Sapp, For Old Fashioned Service with Today's Results! (Century 21 Gold) about 8 years ago

Great post! If a seller doesn't counter, my feeling is that they really don't want to sell and I'm just wasting my time. At least move off your postion a little bit. Show the buyers you want to work this out. It will at least keep both parties in the game for a bit to see if it will work.

I like your post so much, I'm going to reblog it. Congrats on the featured post!

Posted by Sharon Sapp, For Old Fashioned Service with Today's Results! (Century 21 Gold) about 8 years ago

Very interesting and informative - I intend to show this to some of my clients.

Posted by Anonymous about 8 years ago

Often, the first offer is the best offer.  Counter and try to work it out.

Posted by Wendy Hayden, Chesterfield, Richmond & Powahatan (Photographer, Home Stager, ePRO) about 8 years ago

That's great advice, however, what about the agent who hustles you into a listing by telling you he has a buyer for your home that's willing to pay what you are asking and then brings you an offer below that number? I had that happen to me.

An agent shows up on my doorstep one Saturday morning (before I became a Realtor) and asks me if I'm interested in selling my home because he has a buyer who likes it and is willing to pay my price. So I say fine I'm asking 2.7 million. 

He then proceeds to bring me an offer far below that and suggests that I counter somewhere in between. I then tell him, irritated as I should, that I did not ask to list my home. He solicited or should I say seduced me into listing it. I've been in my home for 30 years and had no intentions of selling unless I received my Zillow "Make Me Move" price.

Now he's mad at me and is insisting that I submit a counter somewhere in between my asking price and his clients offer. While many RE professionals may think thats just good ole fashioned hustling I think it borders on unethical professional protocol. 

 

Posted by John DL Arendsen, Crest Backyard Homes "ADU" dealer & Contractor (CREST BACKYARD HOMES, ON THE LEVEL GENERAL & FACTORY BUILT HOME CONTRACTOR, TAG REAL ESTATE SALES & INVESTMENTS) about 8 years ago

Great post!  Selling your home is such an emotional transaction for most people!  I don't think they are ever totally happy with any offer - even if by some miracle they get a full price offer - then they think they priced their home too low!  It seems that sellers start getting defensive as soon as their home is listed for sale.

Posted by Kris Deaton (Shumaker Realty, Inc.) about 8 years ago

Dan what a great post! I have been known to (in a different market) when we received a really low offer to counter back at about $10,000 OVER full price. Just to put it into prospective. Sometimes when you are that far apart on a home that is priced right, it's just not going to work out. However, I usually highly encourage my Sellers to counter, no matter what!

Posted by Paige Walker, Real Estate Guru - Alexandria Pineville LA (Paige Walker) about 8 years ago

Well put Dan. A thorough, succinct description of how a seller needs to analyze their actions and thoughts when selling.

Posted by Robert Amato (Bob Amato of Empire Home Mortgage Inc) about 8 years ago

Dan.. Thank you for blogging about this, and educating the sellers.  We all realize their home is their castle... however this is STRICTLY a business deal.  If an offer comes in, they should work with it.. not just totally dismiss it because it doesn't meet their initial goals.

Posted by Valerie Osterhoudt, ABR, Cromwell, CT Real Estate ~ 860.883.8889 (Johnson Real Estate, Inc.) about 8 years ago

Good post for all of us to keep in mind. 

Posted by House Sale Advisors Lancaster and Lebanon Counties PA (House Sale Advisors) about 8 years ago

Dan,

Great post. I put an cash offer on a home about 10% below the asking price. the comps came in close to the offer price. My buyer was willing to go higher, but the listing agent refused to give a counter, saying we were to far apart. A cash offer and quick settlement with $20K down was not worth countering in the listing agents eyes.

My clients have since bought another home and we settled in three weeks. This home was a little underpriced and had multiple offers on it. We went in at full price and the offer was accepted. What a difference proper pricing makes, especially in this market. This was a better home for them and it cost them about 20K less. By the way, the other overpriced home is still on the market at the same price 4 months later.

 

 

Posted by Tom Horst (Exit Diamond Realty) about 8 years ago

Dan, This really stimulated a lot of interest and opinions. Your title was ingenious. Thanks

Posted by Wayne Johnson, San Antonio REALTOR, San Antonio Homes For Sale (Coldwell Banker D'Ann Harper REALTORS®) about 8 years ago

coming from a view of a lender, this is exactly how all contracts need to move along. With so many homes out there this will help more homes go into contract alot faster and hopefully minimize some of the excess inventorty out there. Good job on the blog.

Posted by Moises Alvarez about 8 years ago

Good post. My advice to sellers is: If you say no, the deal is dead and there is no sale. If you counter offer there is a chance that you will come to agreement and sell your property. Why slam the door closed?

Posted by Bob Pisa, Broker Associate, Commitment, Service, Satisfaction... (Downing-Frye Realty, Inc. Naples, FL) about 8 years ago

Well said Dan. I just ran into the same type of situation. It took a couple of days for my seller to understand that his offers have been few and far between (this was the only one in 3 months) and that it was worth a counter.

Posted by Mike Budzius about 8 years ago

Good post.  The fact is that unless a seller is seriosuly motivated they should not even waste time (theirs, ours, buyers, etc.) putting their home on the market.  I have been telling sellers for 3.5 years that "If they don't like the price they are offered today, they definitely won't like the price tomorrow".  In this market no motivation = no sale.  Since the market is not going to improve for many years sellers better get used to it.  See my blog post: Our Phony Real Estate Market.  In that November 2009 post I detailed the window of opportunity to sell a home for the highest relative price.  That window is now closed.

Posted by Jim McCormack, Nashville Short Sale REALTOR - Stop Foreclosure (Nashville Short Sale Specialist - Jim McCormack - Edge Advantage Realty, LLC - 615-784-EDGE (3343)) about 8 years ago

I love the fishing example. In a buyer market, sellers can;t really play hardball. In a hot seller's market, it does benefit to hold-out. A lot has to do with personal goals - why are you selling? If you need to get out, then don;t be a fool. If you'd like to move but can stay a while and money is less of an issue, then you probably wouldn't refuse in the first place.

Posted by Stacey Brown, REALTOR (ILM Realty) about 8 years ago

Great post with great advice.  I also try to prepare my sellers in advance that in this market, there is no such thing as a bad offer.  I also tell them that an opening offer is often a way for a buyer to get a sense of the seller's motivation.  There are a lot of bottom fieeders and there are a lot of sellers who are grateful for those bottm feeders because they MUST get their home sold.  In this market, a signed offer with pre-approvals is as as serious as a heart attack.

Recently I had an offer on a listing. The offer was very low and the seller refused to counter. I told him that the selling agent (who was not a buyer's agent) said the buyers were making an opening offer and were qualified for much more and will come up.  After 15 minutes of debate he did give me a small counter to offer to the selling agent. Unfortunately, the buyers did not come up again and for a month, the seller chastised me that he wasted a lot of time (15 minutes) for nothing.  A month later, the selling agent called and said that the buyers were coming up in their offer and indeed, they made quite a jump to the upside.  Unfortunately, though the seller came down a little bit more, the transaction did not come together.  The house is still on the market.

Moral for sellers: Keep your eye on your goals, don't be insulted by opening offers, and be aware that negotiations can take some time.

Posted by Marie-Denise Kratsios (Daniel Gale Sotheby's International Realty) about 8 years ago

To Ann C.

 

172,500 on a 179,900 price and an insult?  If it were my seller, I would call it full price, in my market.

 

Unreal

Posted by Joel Glasser about 8 years ago

To Ann C.

 

172,500 on a 179,900 price and an insult?  If it were my seller, I would call it full price, in my market.

 

Unreal

Posted by Joel Glasser about 8 years ago
Great thoughts everyone! I believe being calm and thinking clearly, objectively, seeing all sides can help give us the conclusion we seek, if we have viable sellers and buyers. See if we can listen to what motivated either the buyer or seller for the prices with which they counter. I'm in my tenth home, and attained my Realtors license 8 years ago-- been on all sides if the figurative fence. Taking the Certified Negotiation Designation, I believe would benefit all Realtors.
Posted by Sher Wenowitz, CNE, ABR, Realty Home Pride about 8 years ago

Dan, working with buyers in a buyer's market is particularly difficult with all the reports about sellers having to settle for a MUCH lower price than they expected.  Having a CMA available has helped me convince the buyer that the market dictates the price and keeps me from writing a ridiculously low offer, great post.

Posted by Raul Rodriguez about 8 years ago

Great post!  Good advice.  Of course, in the case of multiple offers (hey, it still happens!... quite a bit around here on exceptionally well-priced properties) it doesn't make a lot of sense to counter every offer.  Take the top few and counter though.

Cheers!

Nicole

Posted by Nicole Thome (USA National Title) about 8 years ago

I tell my buyer this phrase (I'm copyrighting it :))

"Do you want to submit an offer to buy the house or not to buy the house?"

The obvious answer they give me is to buy it. I tell them at this low ball offer you are submitting an offer not to buy it.

Often they say that if there's no counteroffer, we'll just wait a few weeks and submit another just a little higher. I then ask them are you willing to gamble that it will still be there when you are ready?

Another strategy I use is give them the difference in monthly payments between a price of $400k and the asking price of $435k. At $400k its $2,150 and at $435k it's $2,300. Then I ask them are you willing to loose the house of your dreams for $150/mo difference? This usually wakes them up.

Posted by Peter Rozsa (Cupertino, CA) about 8 years ago

A lot of buyers in this market make what I call the "shot over the bow" in hopes that the seller is in a tight situation and the seller will take their "lowball" offer. When the seller gives a reasonable counter and the buyer decides to step up and play ball then the deal will come together. Remember sellers cannot control the offers they get, only the offers they accept

Posted by Sterling Stock about 8 years ago

I typically ask the seller to do something......countering at a price just lower than asking shows the buyer they are willing to negotiate but possibly the offer was too low.  Hopefully, the agent working with the buyer will relay the sentiment to the buyer and keep the negotiations going.  I also work with a lot of buyers and in this market sometimes they just want a bargain and are not going to negotiate.

Posted by JoAnna Morris (ERA American Realty & Investments) about 8 years ago

Dan, I have experienced this very situation.  An offer was made and my client told me "Don't even respond to that.  It's an insult."  Well I let him sleep on it and called him the next morning.  "Bill, let's live to fight another day.  Just counter back."  Long story short, we wrote the contract with the same buyers and closed the deal.

Posted by Mari Suzara, Charleston Area Realty about 8 years ago

Great post; I once had an offer- try to picture the location--single family home, on a 6 lane divided highway, next to a 24/7 gas station/convience store and next to that the on ramp to the Interstate.

 

The seller's refused to counter because THE BUYER'S WIFE USED HER MAIDEN NAME; DID NOT WEAR JEWELRY OF ANY SORT, WOULD NOT PROVIDE THEIR MARRIAGE LICENSE  ( the wife was a professional, and all of her lcienses predated her marriage, and easier to keep the maiden anme then change it; they had 2 or 3  children, by the way) AND THE PRICE WAS TOO LOW.

 

The offer was cash, no contingencies; close at the seller's convience. 

 

(The buyers thought that they might be able to get a zoning variance and use it as an office).

 

Buyers walked; sold them somethign else; 8 months later, listing agent called me, were the bueyrs till interested, sellers would counter.

 

(NO).

 

 

Posted by Joel Glasser about 8 years ago

Nice post. Keep the blood flowing.  Ya stop it and your dead...

Posted by TIM MONCRIEF, Over 2,000 homes sold….. (Keller Williams Realty) about 8 years ago

Dan that was really well put.  I encourage both my buyers and sellers to be open to negotiation.  That's what the whole thing is about-coming to terms, and if you aren't willing to negotiate, you aren't a buyer OR seller.

 

Thanks for sharing.

Posted by Eric Castongia (Zephyr Real Estate) about 8 years ago

Excellent post - you have to keep emotion out of negotiation.  You have nothing to lose and possibly everything to gain by making a counter offer.

Posted by Terry McCarley, REALTOR, SRES, CDPE - Cape Coral, FL (REMAX Realty Team - Cape Coral FL) about 8 years ago

Interesting post. As this is a business steeped in emotion... that's where we come. Nothing happens until we make a counter offer. Not making, even a token counter offer is like cutting your nose off to spite your face. The seller, by not making a counter offer, may be being as unreasonable as the buyer making a real lowball offer. The seller wants to sell for the most and the buyer wants to buy for the least. Nothing wrong with that. Let's negotiate!

Posted by Doug Dawes, Your Personal Realtor® (Keller Williams Realty - Topsfield, MA) about 8 years ago

RIGHT ON!  Excellent solid common sense commentary presented in a knowledgeable way!  Excellent.  Thanks so much.

Posted by Doreen Johan, Sunset Coast Michigan (RE/MAX Sunset Coast) about 8 years ago

sorry for any spelling errors and typos in my prior comments

Posted by Joel Glasser about 8 years ago

Dan, Excellent post!  I think the catch and release fishing analogy is perfect. This definitely should required reading for sellers!

Posted by Bruce Kunz, REALTOR®, Brick & Howell NJ Homes for Sale (C21 Solid Gold Realty, Brick, NJ, 732-920-2100) about 8 years ago

Your title grabs the attention.  But your point is the opposite...and well said.

Thank you

Posted by Randal Jenkins (Coldwell Banker F I Gray and Sons Residential, Inc.) about 8 years ago

Great post.  The flip side is buyers who don't offer because, even though they like the house, they think it is over priced compared to comparable homes they have seen but the price to too high.  They are afraid the seller won't even counter.  Maybe not, but once a seller gets more than one offer in the same range they may realize they are over priced.

 

Posted by Paul Howard, Paul Howard Realty, 856-488-8444 (Paul Howard, Broker, Paul Howard Realty 856-488-8444) about 8 years ago

I love the analogy about fishing and throwing back your catch. I am always looking for ways to express the situation to sellers in a way that they will understand their actions and this is perfect for even those who don't fish to understand. Thank you!

Posted by Rochelle Edwards, Genuine Experience, Genuine Advice (S. Todd Real Estate Ltd., Brokerage) about 8 years ago
Excellent post. Real estate is local!!! The last couple of times I adviced my sellers take the offers and ran. They didn't listen and guess what the market tipped over and lost thousands of dollars. Now those sellers never doubt my advices and had me sold their houses. I use that to share with my prospective sellers and they know that I am serious with my advices and don't mess around with it. I eat, chew, walk, talk, dream, drink and celebrate real estate. Why wouldn't you listen to me but go listen to your uncle who has an engineering degree? LOL
Posted by Tina Binh Pham about 8 years ago

I'm in the Silicon Valley where home prices are unbelievably high (compared to most of the country).  Example $500K for a 3/2, 1,500sqft. detached home, on 6000 sqft. lot, 50 years old.  What would benefit a lot of sellers to keep in mind is that $500K is A LOT of money from buyer's perspective.  So when a seller doesn't counter he risks losing an interested buyer who's going to spend that $500K on someone else's house.  I think some sellers put too much financial value on their home because they have emotional ties to the home.  This is common but when it comes to selling it, the buyer's biggest priority is paying an appropriate price, not on how much the seller loves the home. 

Posted by Leanna Scott about 8 years ago

Dan, this is such great advice.  I especially love the fishing analogy!  I could have used it with a seller/agent who was representing himself in a recent transaction where I was on the buyer's side.  Now, imagine that you are the fisherman and your bait has been in the water for about a year.  Just as the buyer/fish starts to nibble at it, you scream and rail at the agent-fish who brought them over to your line.....  Thankfully, it all worked out, but it was stressful going for awhile there!

Posted by Jennifer Prestwich, Madison & Co Properties (Henderson, Thornton, Broomfield and Westminster) about 8 years ago

Release fish????  Say it isn't so!

Posted by John Bennett about 8 years ago

Great post! Exactly what I tell my sellers!

Posted by Linda Jandura, Realtor, North Carolina Buyer & Seller Specialist (Raleigh Cary Realty) about 8 years ago

Sellers - in this market you have two options - assuming you hired a great agent and trusted them enough to get you priced at FAIR MARKET VALUE based on comparable sales in your area:

1. Counter offer - and have a real chance to come to acceptable terms - and get your house sold at a price acceptable to you. It could take 5 counters or more - but your agent will prove their value to you.

2. Reject the offer that 'insulted' you - chase the market down with price reductions and possibly end up selling it a year later at the same price (or just below) that was originally offered and you refused to counter.

Trust Your Agent's Instincts - As Agents, we are working in your best interest!

 

p.s. - the correct option is "1"

Posted by Mimi Fisher about 8 years ago

awesome post..I just encountered this. It was an estate sale and one of the family members was holding out..I was dealing with the local sister and I asked her if I could call her sister in TN and give her a come to Jesus call...She let me and we sold the house. 

Posted by Joel Jadofsky, One of the Top Realtors in Panama City Beach Area (Keller Williams - homes for sale - Florida - Gulf - Beach ) about 8 years ago

Well, if you don't counter it will not sell. (maybe later?)  I had an experience a few years ago where I presented my client's reasonable offer at the kitchen table to the seller. Her two co-listing agents became emotional and angrily stated that she definetly would not sell at that price and it was even too low to consider a counter. I observed that the seller didn't say anything ,but let her agents do the talking.  I made a summary predicting that home sales were slowing down and prices were softening and that the seller might have regrets if she didn't consider accepting the offer as it was.

The two  co-listing agents then told me to take my offer and leave. I left but I left the offer on the table and said to the seller. "I will leave the offer here for you too think about over night. Have a good evening."  I figured that it was a no go and informed my buyer that it was highly unlikely the offer was going to be accepted.

The next day around noon I got a call from one of the selling agents. "We'll, I guess I have to apologize to you, I was wrong. She called me this morning and accepted the offer."

Now things always look clear in the rear-view mirror after you ran it over, but having the foresight to accept and ignore two agents who were advising her not to accept or counter an offer.......

 

 

Posted by RICK DILLION (Realty World Silverado) about 8 years ago

I've never in my 5 years of this business (I don't think I've quite reached veteran status) run into a seller who did not counter even if it was with the current list price. Sometimes buyer and seller are just too far apart for one reason or another, but negotiation with a win/win objective on both sides usually gets the job done. An immediate rejection of the buyer's offer without a counter will short-circuit an important part of the sale process. Very good post!

Posted by Gary Bellinger, Esq., REALTOR® - Retired (EXIT® Realty Partners) about 8 years ago

Ididn't read all the responses but here's my 2 cents worth. First are they buyers occupants or investor flippers? Second how much are they qualiffied for? Lots of agents are showing way over the buyers ability. If you are firm on the price just state it in the mls.

Posted by Dale Falkowski, The Honest Agent Full Time Pro (Remax Town & Country) about 8 years ago

I think your first few comments really hit the nail on the head. Since you can't expect buyers and sellers to set aside all emotion, it is the agent's job to remain unemotional and be the voice of reason.

Youre are so right in pointing out that sometimes agents have to say things that sellers don't want to hear. But it IS your job.

I've known SO many agents who routinely got caught up with their client's emotions...even to the point of animosity between agents in the same office. They weren't doing their jobs.

 

Posted by Marte Cliff, Your real estate writer (Marte Cliff Copywriting) about 8 years ago

If a property is priced correctly, what is a reasonable offer? Every offer should have a counter offer based upon the goals and objectives and your exit strategy. Regardless of the offer price, every offer should be presented to the seller, yet many PINO agents don't forward offers to the sellers.

A Pro always acknowledges an event and contacts the people involved, don't you? Creating and maintaining relationships are keys to success.I agree, regardless who you represent, the goal is to close, so persuasion, justification, and conversion are the keys to success, aren't they?

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) about 8 years ago

Dan - The firt point that you made, I think is the most valid.  Although suggesting to the Seller that it is in their best interest to counter an offer, which I totally agree with, the most important thing you said in your article is to not take this personally.  I have seen so many situations where a year ago, the Seller received an offer, didn't take it and this year they have re-listed their property for $100,000 or more less than the year before and if they had only listened to their Realtor, they would have ended up with more than what they will end up with now OR worst cases they have had an NED filed or are trudging through the tedious process of a Short Sale!!  Please listen to your real estate professionals -they DO have their fingers on the pulse of the market and can provide you with market data and help you make an EDUCATED decision.

Posted by Jill Limberg about 8 years ago

Great stuff. One of the things I have always done with sellers is to bring to the initial meeting all the ingrediants of the CMA and go over it with them from a buyer's point of view and decide together what price to list it at as opposed to just telling them what I think the price should be.

This way because they took part in how we arrived at the price they are more open to negotiating since they understand the market, via the comps etc., and we established the need for flexibility up front. It isn't a shock or surprise for them if they have already considered what this market is dictating.

Posted by Don Humphrey, Coldwell Banker (Coldwell Banker-homes for sale in Vancouver, WA) about 8 years ago

Dan, great thoughts and good advice to sellers in this economic market. And for agents, we need to realize that every offer is an opportunity to negotiate an acceptable transaction for our clients.

Posted by Pete Deininger, Breckenridge Colorado Real Estate (970-389-0372) (Breckenridge Associates) about 8 years ago
And then there are the buyers--in Las Vegas (default capital) who, when told of multiple offer situations, shown what A DEAL they have before them, still want to offer less than asking price...then curse you for the one(s) that "got away"!! Denyce Thomas, Realty ONE Group-Las Vegas/Henderson, NV
Posted by Denyce Thomas (Realty ONE Group) about 8 years ago

I have had a client who has made three offers on three different homes and none of them were willing to counter or they countered back at full asking price. I find it strange that people have not changed their mindset about the economy espically when it comes to housing prices. The good news in all of this my clients found a great home for even less money that the three others that they looked at.

Posted by Michelle Plumb (Coldwell Banker Ocean Beach Properties) about 8 years ago

I have had a client who has made three offers on three different homes and none of them were willing to counter or they countered back at full asking price. I find it strange that people have not changed their mindset about the economy especially when it comes to housing prices. The good news in all of this my clients found a great home for even less money that the three others that they looked at.

Posted by Michelle Plumb (Coldwell Banker Ocean Beach Properties) about 8 years ago

Dan great post, I've said the same thing to my clients you just did it better!  I'm taking notes.

 

Posted by Deborah Varelis (Sato Real Estate, Inc) about 8 years ago

Dan great post, I've said the same thing to my clients you just did it better!  I'm taking notes.

 

Posted by Deborah Varelis (Sato Real Estate, Inc) about 8 years ago

Great post.  I would also say that my advice to clients is to always make a counteroffer to anything on the table - whether it's the first offer or the tenth counter.  A client can always counter at the same price, terms, and conditions as their previous offer.  Just keep the balls juggling and let the other side be the one who will walk away, not you.

Posted by Brad Pihlstrom (Edina Realty) about 8 years ago

I have always advised my sellers to work the first offer until you and the buyer can't come to terms because you never can tell it may be a while before you see another.

Posted by Joy Caldwell (Coventry Glen Realty) about 8 years ago

Isn't it amazing how many sellers don't take an offer or counteroffer that's close to what they were asking and then it cost them more money in their ongoing monthly housepayments, HOA fees, etc. than the difference in the offer they received.

Posted by Gary Burleson, Myrtle Beach Homes, Condos, Foreclosures, Investment Propery (Beach Water Realty - www.beachwaterrealty.com) about 8 years ago

Churchill said, "Talk Talk is better than War War."  Half the fight is getting someone talking with you. 

Posted by Gene Riemenschneider, Turning Houses into Homes (Home Point Real Estate) about 8 years ago

For goodness sakes - counter!  In this market, buyers are often testing the water.  If you have a buyer, don't let them get away until you have fully exhausted negotiations.

Posted by Miriam Dillon, Realtor in Rosemary Beach, SoWal and all of 30A (Rosemary Beach Realty) about 8 years ago

Yes, I recently had one where my client was the low-baller (lower than my recommendation), and we started a $190K house at $160K.  I had worked with the Listing Agent before and we were determined to keep our clients moving toward the goal.  At least twice we gve a "final offer" and received a counter back! In the end, we got the deal done at $172K, the number I told my client in the first place!  Had the seller not countered - no deal!

Posted by Pam Ruckriegel, Negotiating the Best Deal for You! (Louisville Real Estate Pros - 502-435-5524) about 8 years ago

well said and so true.

 

Posted by Marlene S Giles, RE/MAX 1st Olympic ,Lynchburg, VA about 8 years ago

Great information, let's hope many folks will read it, good job.

Posted by Deborah Grimaldi, (401) 837-9633 (Albert Realtors) about 8 years ago

Great post...I agree 100%.  A Realtor's job is to get the home sold not to to become best friends...I'm sure they will appreciate you in the end.  

Posted by DeJaniera B. Little about 8 years ago

Great blog.  Totally spot on.  My principal broker says exactly what you say and his company has been the number one company in Ulster County for the last 16 years.  Do I have yourpermission to reblog this as I would like to share this with my neighborhood.  Thanks and keep writing.

Posted by sandy reid, period homes, second home market (Westwood Metes & Bounds) about 8 years ago

Great blog.  Totally spot on.  My principal broker says exactly what you say and his company has been the number one company in Ulster County for the last 16 years.  Do I have yourpermission to reblog this as I would like to share this with my neighborhood.  Thanks and keep writing.

Posted by sandy reid, period homes, second home market (Westwood Metes & Bounds) about 8 years ago

9 times out of 10 I encourage clients to counter. Every once in awhile an offer is so ridiculous and so poorly wrtten with no proof of funds, pre-qual, etc. it's truly not worth it. But you're right, unless your property is truly unique the buyers will notcome back higher.
Unfortuantely I also blame selling agents because if you know you have priced a property under market or well and they come in $50K less, most the time that agent has no client control and obviuosly didn't run the comps.

Posted by Laura Coffey, Keller Williams VIP Properties (Keller Williams VIP Properties) about 8 years ago

Great topic....especially these days!!! 

On those REALLY "bad" offers (and bad is a very transient, relative term!!!) I tell my sellers "we've had XXX people through the home who have all offered us nothing...this buyer is serious about your home, really wants to purchase it, and have begun by offering $xxx.  Let's see where we can reach an agreement.  We can't get the home sold without first having someone TO TALK TO.  We now have someone to talk to!"  I prefer not to say You, Your Home, Your agreement...I view it as "our" challenge and "our" effort to reach a mutually agreeable arrangement.  We sure have our work cut out for us these days!

Thanks for bringing this up and letting it be a public post.

Posted by Judi Bryan, Your Chicagoland Connection (Executive Realty Group) about 8 years ago

I have had sellers refuse to counter with me doing everything short of getting on my knees and begging them to counter. Often a few months down the road they ask me to get the offer back. Every time the buyer has already moved on.

Posted by Alan Grizzle, Full Time Realtor, Lifelong Resident of Dahlonega (Chestatee Real Estate) about 8 years ago

Well said, Dan! I plan to save this blog and show it to any seller who refuses to counter an offer on their home. It doesn't happen often but when it happens in this market, you have to wonder if the seller really wants to sell. Just as certain buyers who make lowball offers are accused of being on a fishing expedition, sellers who overprice their home can be fisherman, too.

Posted by Ann Steinemann, REALTOR, GRI, PPS (Russell Realty,Westlake, Ohio 419-602-0339) about 8 years ago

I admire sellers who refuse to counter bad offers. So many buyers are trying to steal properties these days. An absurd offer does not deserve a counter.

Posted by zeta cross, Getting Greener Makes Your home worth more! (Smart Green Realty) about 8 years ago

I understand how frustrated sellers can be and its tough to keep the emotions in check. With so many homes on the market, Buyers have so many choices. They don't need waster there time with a unreasonable Seller.  Keep the fish on the hook.

 When I work with buyers we try to find 1st and 2nd choice -- If 1st seller will not be reasonable then we are on to the 2nd. 

Posted by Jennifer Marks (On Maternity Leave) about 8 years ago

I'm also glad you made this a public post. I think your analogy about the fishing was perfect. I only deal with buyers so I can see how tough it would be with some sellers to take an offer personally. Your scenario with the sellers was also just right.

The market is tough enough as it is without misunderstandings causing lost sales, for all parties involved.

Posted by Jon Quist, Tucson's BUYERS ONLY Realtor since 1996 (REALTY EXECUTIVES TUCSON ELITE) about 8 years ago

Dan,

Thanks for bringing up the topic.

I tell my sellers that the byer has just "served" the ball into your court, you just have to hit it back.

Buyers are constantly being told that they can low ball everyone, so it should be no surprise by a seller to receive a low ball offer.

Just make a reasonable couter offer and see what happens. This is how it happens when buyers and sellers are selling anything in this world.

The key as a listing agent is to stay calm and not freak out thinking you are protecting your seller. You as the listing agent can make the transaction smooth or living hell for all, it is up to you and your behavior. Your job is to stay calm and keep the transaction moving.

I am in Arizona, so we deal with this all the time.

Take care,

Bob Dickinson RE/MAX Excalibur 602 527 8086

Posted by Bob Dickinson, Local Expert Globally Connected (Realty One Group Scottsdale, AZ) about 8 years ago

So, Mr. & Mrs. Seller, you are insulted by someone who wants to buy your home and you feel you have a better chance of selling it to all of the people who have not expressed interest in buying it?

How about this, we pretend that the buyers have made a reasonable offer that's just a little too low. Let's counter it accordingly. Then the ball is in their court and they will either work with us or they won't, but why would you assume that they won't? They may just be feeling you out to see how low you're willing to go. If you don't counter their offer, then you're never going to know how high they'll go. Remember, these folks want to buy your home! Isn't that what we're looking for?

Posted by Bob Krus, What About Bob? For All Your Real Estate Needs! (Keller Williams Foothills Realty) about 8 years ago

Oh hey, an activerain blog post where the title is senselessly provocative and the article is actually about the opposite thing.  What's that, you say?  Negotiate a contract until mutually agreeable terms are met?  Wow, I hadn't considered that!  Thanks!

Posted by Torgie Madison, Websites and Contact Management (Quicksilver Real Estate Solutions, LLC) about 8 years ago

Wonderful post!  The buyer has one chance to 'go low', and the seller's counter-offer will set the tone of the negotiations that follow.  I remind my sellers of the possible strategy the buyer might be utilizing.  You will soon discover how much the buyer loves the home as the negotiations precede or if they were just looking for a deal.

Posted by Eileen Knode, REALTOR (Long and Foster Real Estate) about 8 years ago

In the past, when the market was good..........remember that.  I represented a Builder (as his Lisiting Agent) that refused to counter any offer 5k below his asking price.  He was insulted and let me know in certian terms like, "tell that _ _ _ Buyers Agent to show his homes to buyers who could afford them". (He was being nice.) Belive it, I did have a good portion of the buyers return with full price offers! I did very well with him for about 8 years, until I was just sick and tired of dealing with him.  Of course I never told the buyers agents what he said.  I went to work!  By letting the agent down gentley, that he was not going to counter and reminding him/her what we already knew, was that the buyer wanted the house! And we wanted a commission! Now lets figure out a way to get this buyer in this house.  The builder, built a very good house in good neighborhoods and even if he was a cranky _ _ _ he stood behind his product.  I always remember "The Sale Begins When the Customer Says NO!

Posted by Pete Prisock about 8 years ago

You've said it all very well. Sellers are only hurting themselves in the long run when they refuse to counter an offer.

Posted by Kate Wheeler, CCIM - Murphy NC Real Estate for Sale (Country Homes and Land Murphy NC Realtor ) about 8 years ago

From a seller's perspective, when does it make sense to not respond?

Let's say I have a house on the market for $250,000 which according to my agent is realistic and there are comps to support the price. In the old days, you could assume there was 10% wiggle room so an offer in the $225-250 range was expected.

Suppose you've got an unscrupulous investor making lots of offers and they write up an offer for $150,000. As they're being unreasonable to begin with, is it worth anyone's time to counter? I vaguely recall giving a counter at full price but can't recall any details so what do you do in this situation?

Just remembered, we got offer for like $650,000 and we didn't counter. House eventually sold for $840,000 so yes it was an offer worth ignoring as it was what they could afford and they hoped we were desparate which we weren't as negative cash flow for 15 months was just $1,500/mo

Posted by Tina Gleisner, Home Tips for Women (Home Tips for Women) about 8 years ago

Dan - Thank you so much for addressing this as many of us have been working with this on a daily basis. I always try to let my sellers know that it is not an insult that the buyer is just attempting to get the very best "deal" they can and now it is their turn to relook at everything including how long the home has been on the market, and to give the best counter they feel comfortable with then they can be done if they choose.

Posted by Marie LaVoise, CENTURY 21 Platinum Properties (CENTURY 21 Platinum Properties) about 8 years ago

Funny!  My Realtor told us to not to counter and we never got another offer.  The house is now rented on a 5 year lease!  What a jerk!!!

Posted by wendyv about 8 years ago

In our current market, you have some buyers who are looking for a 'steal', and they make ridiculous offers on properties.  In our area, buyers don't have too many opportunities to get an accepted contract with a low ball offer.

But, if the offer is decent, then the sellers need to respond to keep the channels of communication open.  Everyone knows the game that has to be played.

 

Posted by Scott Deaton (Deaton Group Realty) about 8 years ago

When presenting low offers to sellers (and depending on how good a relationship I have with them) I often say, "Don't get mad at the people that made this low offer.....get mad at the 10 people that looked at your house and didn't make an offer!"

Sellers often have an emotional reaction. I encourage them to counter even if it is to counter at list price.

I submitted a low offer recently and the listing agent said the sellers didn't want to respond to the offer. Didn't hurt my feelings, but you never know where the buyers may have come up to.

Posted by Anonymous about 8 years ago

Great post and responses!  I can't wait to use this information in the future with buyers and sellers!

Posted by Alicia Tomkinson ~ New Homes Savannah, GA (Konter Quality Homes & Konter Realty Company) about 8 years ago

As Realtors, a good part of the value we bring to the table is our unique market knowledge and negotiating skills.  Simply accepting or rejecting an offer is not considered negotiating!  Here in Boise, Idaho; I have never suggested rejecting an offer!  Instead, I always come back with "something" even if it is full price close in 45 days so I can honestly say the we were still "negotiating" when the other people quite if it doesn't move forward.

Posted by Jim Paulson, Owner,Broker (Progressive Realty (Boise Idaho) www.Progressive-Realty.info) about 8 years ago

Great post!  Can I "borrow" your fish analogy!  That was great............

Posted by Woody Edwards, A Realtor® Who Answers His Phone! (First Choice Realty, Inc) about 8 years ago

This is brilliant!  I'm not a fan of declining offers.  Thank you for putting this out there.  I especially enjoy you "this is a business transaction...keep your emotions out of it"

Posted by Leigh Ann Holman, REALTOR - Century 21, River Valley, Arkansas (479)774-5166 (Leigh Ann Holman - Century 21 Glover Town & Country) about 8 years ago

I think the most important lesson from this post is ALWAYS COUNTER!  If the offer is ridiculous, counter at one dollar less than the listing price but NEVER walk away from an offer.  I was fortunate to work with a saavy agent and we brought her 130 offer on a 190 property up to 170 and closed the deal.  The buyers just wanted to get the best deal they could get and in this market were totally unsure of what they could get it for.

 

Keep emotion out of the equation.

Posted by Marnie Matarese, Showing you the best of Sarasota! (DWELL REAL ESTATE) about 8 years ago

Oops! I meant I especially enjoy you saying "this is a business transaction...keep your emotions out of it"

Posted by Leigh Ann Holman, REALTOR - Century 21, River Valley, Arkansas (479)774-5166 (Leigh Ann Holman - Century 21 Glover Town & Country) about 8 years ago

The need to respond to a buyer willing to begin the conversation, almost no matter where they begin it, is something I discuss with my sellers at the time we sign the listing.  "Buyers, and especially buyers above $300,000, are NOT coming out of the woodwork in our market, and if one of them choses this house to pursue, let's see if there is a way to make you, Mr. Seller, happy and create a deal."  If you haven't suggested that you are a proponent of countering to most any offer at the time of listing,  then let them have the emotional, defensive, offended reaction and get it out of the way.  And then explain, calmly, that this buyer has chosen their house out of the many that they could have and that they can either get angry or maybe get their house sold. but it takes a two-way conversation to make it happen.  How many times have you found a low-ball shot across the bow is followed by something much more tolerable to the seller? and immediately in some cases.

Posted by Jill Ford (Keller Williams Realty of Pinehurst) about 8 years ago

Great post!!  I think it is important to emphasize that this is a business transaction and a negotiation. Counters are essential!

I cannot even begin tell you how many times I have submitted an offer on my buyers' behalf and been told that the seller will not counter because they do not like the terms of our contract.  This is always confusing and frustrating for me (and my client). 

Thanks for the post!

Posted by Heather Schaible, REALTOR®, PMC, SFR, ABR, GREEN (West Associates) about 8 years ago

Excellent post and great responses.  I too long for days gone by when the buyers agent actually presented the offer to the sellers with me present and had the opportunity to explain their offer which helped the seller to determine if they in fact wanted to counter at all.  I still send a thank you letter to the buyers agent and politely state that the seller has decided not to counter their offer and that the seller would be happy to entertain another offer more in line with the asking price.  This seems to set the stage for both intentional low ballers and true offers alike.

Posted by CJ Johnson, Sales Consultant - Build On Your Lot @ DWH (David Weekley Homes ) about 8 years ago

Dan, this is a great post!  I'm glad you are allowing the public to see this as well - - what a great "education" and you've made it so easy to understand :)

Posted by Joanna Piette (New Home Resource, LLC) about 8 years ago

Fortunately, my current transaction only had one counter, it wasn't too awful (just $5000 difference).  But in my personal home buying over the last 30 years, I've had a few deals where it went into 4 or 5 counters back and forth.  One of the last counters was fighting over retaining or giving the refrigerator, and that went for about 3 days.  (Yes, it was a HIGH END fridge...)

Posted by Mark Druckmiller, Customer Care coordinator - Real Estate One headqu (Real Estate One - Saline, Michigan) about 8 years ago

Great advice.  I think for me as a realtor there were some great words of wisdom as well.  Sometimes, I let my emotions get in the way and forget to keep my business sense about me.  Thanks for the post.

Posted by Brien Berard, Maryland Real Estate Agents - Laurel Real Estate (Remax Professionals Laurel MD) about 8 years ago

I agree with most of this discussion. There are pros and cons to both sides.  

I recently submitted an offer that was 60K lower than asking...but the house was overpriced.  It's a short sale...the house is a wreck and the LA hasn't been at the house for months.  How do I know this..her flyer still has pictures of the SNOW from last winter.  The Seller after mulling it over for a day finally signed.  What I did submit with the offer..were all the things wrong with the house.  The house looked like the 5th army had camped there and left during the night.  I take that back..the 5th army would have probably cleaned up the place before they left.  

Today I received an offer on one of my listings. It came in $150K off list.  List is about 15K high...maybe. The owners have no debt on the place, it shows like new. I told them to flat out reject this offer.  It's an investor throwing out offers..to see what sticks.

Sometimes you have to read between the lines..and it's a fine line.

Investors have no emotion and are about as reliable as the psychic down the street.  

Buyers looking at houses out of their mortgage approval need to be counseled.  If they can only afford $300K then they need to look in that price range and not something $150K higher.

Prior to showing or writing ...the agent needs to have a "let's get real conversation" with their clients. If I have clients and they have an approved price range..that's where we stay.  If they don't like what is in that price range..then they have to figure out how to get into the higher bracket and get the house they want...

I am a good negotiator..but sometimes..when offers are so stupid and poorly written... I just want to bang my head on my desk, pop a couple prozacs and call it a day.

It's Friday and this week..I had about 3 really stupid offers...my head hurts!!!

Have a great weekend.

JohannaD

Posted by JD about 8 years ago

I agree with most of this discussion. There are pros and cons to both sides.  

I recently submitted an offer that was 60K lower than asking...but the house was overpriced.  It's a short sale...the house is a wreck and the LA hasn't been at the house for months.  How do I know this..her flyer still has pictures of the SNOW from last winter.  The Seller after mulling it over for a day finally signed.  What I did submit with the offer..were all the things wrong with the house.  The house looked like the 5th army had camped there and left during the night.  I take that back..the 5th army would have probably cleaned up the place before they left.  

Today I received an offer on one of my listings. It came in $150K off list.  List is about 15K high...maybe. The owners have no debt on the place, it shows like new. I told them to flat out reject this offer.  It's an investor throwing out offers..to see what sticks.

Sometimes you have to read between the lines..and it's a fine line.

Investors have no emotion and are about as reliable as the psychic down the street.  

Buyers looking at houses out of their mortgage approval need to be counseled.  If they can only afford $300K then they need to look in that price range and not something $150K higher.

Prior to showing or writing ...the agent needs to have a "let's get real conversation" with their clients. If I have clients and they have an approved price range..that's where we stay.  If they don't like what is in that price range..then they have to figure out how to get into the higher bracket and get the house they want...

I am a good negotiator..but sometimes..when offers are so stupid and poorly written... I just want to bang my head on my desk, pop a couple prozacs and call it a day.

It's Friday and this week..I had about 3 really stupid offers...my head hurts!!!

Have a great weekend.

JohannaD

Posted by JD about 8 years ago

In Canada the real estate market is not doing too badly, and low ball offers don't happen that often, but I have actually encountered a listing agent who was not even interested in seeing my offer. Over the phone, he wanted me to tell him how much the offer was for, which defeated the point of presenting the offer. There was a little hostility, which ended with him telling me that I should not even bother with the offer unless it was a certain dollar figure. Since there were other listings in the same building, we decided to present an offer on a different unit, which went very well. The agent was friendly and cooperative, and we got it for about $30,000 less than the asking price of the first unit. This was a pretty new building, and the units were identical, with the only difference being that is was down 3 floors.

The first listing was on the market for about a year and a half before it finally sold, and the one my clients bought was on the market for less than a week.

However, sometimes I do see offers that are so extremely ridiculous that it is obvious that you are dealing with someone who does not have sincere intent, and in our more stable market in Canada, I could see situations where there really was no point in responding to an offer that was not in the realm of market value. This could be true of anything... Even with my truck, I had someone offer me about 25% of its value, so I just threw out the guys number... That would have continued to be a watse of time. We are not desperate here.

Posted by Burnaby Realtor about 8 years ago

Each offer is different and the facts of each dictate what is the best negotiation tactic. Sometimes "knowing when to fold them" is absolutely the best way to go. I just inked a deal this week representing the buyer that the seller declined to counter based on an appraisal they had completed less than 5 weeks ago. We requested a copy of the appraisal and after I thoroughly reviewed that document and informed them about why it was not even close to accurate they immediately dropped over $50K from their last stance. After they dropped another $20K we were ready to play ball.

 

I have walked from negotiations on both sides and had very good results. There are many ways to play the same hand but there are times when presenting a counter offer is not in the best interest of your clients. Negotiating "the deal" to me is the best part of our profession.

Posted by Tom Priester, Paradise Sharks (Paradise Sharks ) about 8 years ago

I disagree with you!  Our emotions do immediately come into play.

Not only was I insulted by a proposal on my home.  I have maintained a bad feeling towards the realtor who did this and we are both in a small religous community.  She has lost business "hopefully" from the shameful proposal.

 

The potential buyer ended up making a reasonable contract and then backed out.  Each property is unique and mine offered something to that person that she could not have found elsewhere.  She came back and I had her pay $4,000 insult added price to purchase my property.

She we can be insulted and agents should be aware that they should be responsible.  It isn't a give away because of foreclosures.  Each property has unique features and each seller has their own set of circumstances.

 

St Louis Painter

Posted by Sonny Landau (St Louis Home Improvement and Painting Companies) about 8 years ago

I recently closed a lender-owned property where our offer was 40% lower than the asking price.  They countered back $1000 less than ask.  We countered back $1000 higher than the first offer.  This went back and for for TWO WEEKS - a counter/counter each day.  The listing agent relayed some of the conversations with the seriously out of touch asset manager.  She finally went to his supervisor with the explanation of why this was a good offer and take it. 

My take on it is if there is a dialog, there is still the potential of a deal.

Posted by Bea Lueck (Coldwell Banker Rox Realty) about 8 years ago

There is an old saying that the first offer is the best offer. Work it.

Ty

Posted by Anonymous about 8 years ago

There is an old saying that the first offer is the best offer. Work it.

Ty

Posted by Ty Lacroix (Envelope Real Estate Brokerage Inc) about 8 years ago

Dear St. Louis Painter,

I think you missed the point of the article.  First of all, it is the ethical responsibility of a Realtor to bring all offers to the seller unless the seller has expressly requested to be shown no offers below a certain dollar amount.  It is not up to the Realtor to decide for you whether or not you will accept an offer.  Secondly, if emotions are allowed to drive business decisions, then most decisions made will be badly made.   There is nothing insulting about someone bringing in a low offer... in fact, in some cultures, bargaining is the norm.  What Dan was trying to point out is that an offer begins a negotiation.  The seller can counter by dropping the price just one dollar if he feels the offer is too low.  That gives the buyer a clear signal as to whether or not to continue the negotiation.  No matter what you think your home is worth, the market sets the value.  Your home is worth what someone will pay for it.  Period.  It is unfortunate that you would demonize the agent for doing his or her job.

Posted by Marnie Matarese, Showing you the best of Sarasota! (DWELL REAL ESTATE) about 8 years ago

Not to long ago, I submitted an offer for my buyers and the seller countered with a "firm final counter" which was still way high and my buyer walked away.. They had calculated the cost of improvements and made their best offer.  The "spin" from the listing agent was that they never really wanted the home anyway.  Au contraire!  Yes, they did, they just wanted it at a market price.  Three months later they found "their house" & purchased it.  Now the the original house has had a price reduction and is under contract for, I am almost sure, less than my Clients offered them.  Closing numbers will confirm what's become a familiar story - failing to recognize an opportunity because it doesn't look like you expected it to look!  

Posted by Beverly Femia, Broker Realtor Stager - Greater Wilmington, NC Are (BlueCoast Realty Corporation) about 8 years ago

i insist that my clients counter all offers that are not frivolous.   it's bad business to leave offers uncountered.  the other agent has done their job and leaned on  the client to reduce it to a writing.  if a seller cannot find a few minutes to sign  a counter THAT THEIR AGENT PREPARED and WHICH  THE AGENT WILL DELIVER, then they're stupid.

 

 

Posted by Michael Ford, California+Hawaii+Oregon about 8 years ago

Great post.  Buyer and Sellers...Can't we all just get along?  Get rid of the rosey sunglasses and remember it's a business transaction.

Posted by Randy Elliott, REALTOR : Lodi / Stockton, CA (RE/MAX Gold) about 8 years ago

Dan - I cannot tell you how many times I have submitted an offer for a qualified Buyer only to have the offer ignored. I always recommend to my Seller that they submit a counter offer, especially when there are multiple offers. The reason for this comes down to many factors including some Agents who do not wish to do the extra work when there are multiple offers involved. I believe this is leaving alot of money on the table for the prospective Seller's then they realize. Thanks for the post!

Posted by Matthew Bartlett (Century 21 Masters/Lic. #01353034) about 8 years ago

Dan

Great post. Sellers don't seem to understand that this is a business transaction. And many agents don't seem to understand this is a down market.

I'm working with a buyer who recently made an offer on a listing that has been on the market 392 days, That's THREE HUNDRED and NINETY TWO DAYS. The offer was about 85% of the listed price. The listing agent told me the sellers were insulted by the offer and their counter was full price. I suggested to the listing agent that the sellers come back with a reasonable counter. His response was that the buyer should raise his offer. To what? That's bidding against themselves. The listing agent finally came back with a counter. 99% of the listed price. The buyer moved on and we are now in inspections on another listing we found in the neighborhood.

The other agent? The seller of the first listing fired him and the listing was Withdrawn.

Posted by Jack Fleming (Weichert, Realtors) about 8 years ago

Dan- I think my office must be bugged!

This is the exact same conversation I had not a month ago with some of my buyers.  An offer should always be countered even if it is at the original terms of the seller.  At the very least draft the letter to the buyers with some starting points.

Being insulted by a low offer is just plain silly.  Especially in this market.  If your home has been on the market for 400 days (only that the days on market have been "reset" 3 times), you are at a price point that is selling at about 90 days (in the current market), and you are in a desirable golf community I think there may be a problem!

All sellers should counter every offer.  Many good points have been made in the comments above.  The very worst initial offer may be the one that closes at the best terms for both parties!

Posted by Anonymous about 8 years ago

Dan- I think my office must be bugged! This is the exact same conversation I had not a month ago with some of my buyers.

An offer should always be countered even if it is at the original terms of the seller. At the very least draft the letter to the buyers with some starting points.

Being insulted by a low offer is just plain silly. Especially in this market. If your home has been on the market for 400 days (only that the days on market have been "reset" 3 times), you are at a price point that is selling at about 90 days (in the current market), and you are in a desirable golf community I think there may be a problem!

All sellers should counter every offer. Many good points have been made in the comments above. The very worst initial offer may be the one that closes at the best terms for both parties!

Posted by Donnie Worley (A Team Real Estate Professionals) about 8 years ago

There are times to counter and times not to counter.  Depends on the sellers objectives.  However, I agree that NO OFFER should ever be dismissed.

Posted by Alan Bruzee (Long & Foster Real Estate, Inc.) about 8 years ago

It amazes me how the majority of sellers take this personally. The buyers don't "know" them, they're usually not trying to "screw them over".... like you said - it's a business transaction and they're just trying to get the best deal possible. AND, they're looking out for themselves. Not countering is an insult in my opinion. So, back to one of my blogs last month - we are much more educators than anything else in this business, aren't we?

Posted by Mari Armstrong (DiSalle Real Estate Co.) about 8 years ago

Thank you all for your great comments, personal experiences and advice.  I think we can all learn something from this important discussion.

After reading the above comments I re-iterate that an offer of any kind is a starting point.  Not all will end in a closing, but that's ok and the way it goes in our business.  We'll move on and put or best foot forward for the next go around.

I agree that when taking a listing, it is a good idea to educate your client of the possible objections buyers may have to their home and to let them know to expect the possibility of offers well below their listing price.  I do both, so they have as few "surprises" as possible and it allows me to go back to them in a few weeks/months so we can to discuss our strategy moving forward.  For those sellers who think they should get full asking or 1k below asking price, this isn't the supermarket folks where you walk in and pay retail for a bag of chips.

Our duty as REALTORS is to educate our client as best we can.  If they still do not want to take our advice and they insist on making a low offer, we are required to present their offer to the listing agent or fire them if so inclined. 

Standard of Practice 1-6 -  REALTORS® shall submit offers and counter-offers objectively and as quickly as possible.

It is then that agents responsibility to be OBJECTIVE (adjective: not influenced by personal feelings, interpretations, or prejudice; based on facts; unbiased: an objective opinion.) and present it to the seller.  How many times have you presented an offer where the listing agent gets defensive?  "Well, my seller won't accept that! etc, etc."  I'm sorry, but are YOU the seller?  Please read the definition of objective. 

I still don't understand a sellers reasoning for getting upset at an offer instead of directing that toward the other 5 to 30 buyers who viewed the home and didn't.

Sonny- I wasn't following your email.  Did the prospect buy your home?  It's not clear why you are trying to ruin this woman's livelihood based on one offer that was made.  Perhaps I am missing an important fact.  Thanks for joining in the conversation. 

Posted by Dan Jasmer, Changing the way you look at real estate (Coldwell Banker Residential Real Estate) about 8 years ago

Dan, very good point. I had a similar situation recently, when the offer came $30,000 below plus $5,000 in seller's concessions. My Seller was furious, but I kept it cool and worked with the Buyer's agent and we met at $10,000 below asking price with no concessions. It wouldn't happen if we "rejected" it from the start. I just wanted to add, that it's vital to have a good cooperating Buyer's agent to make it happen. 

Posted by Irina Riley, GRI, SFR, CNE, e-PRO, SRES (American Dream Colorado) about 8 years ago


Good fisherman analogy there! Congrats on the feature.

Posted by Lyn Sims, Schaumburg IL Real Estate (RE/MAX Suburban) about 8 years ago

One additional analogy to a point that I made earlier about no one being a mind reader, so no one knows whether the seller will be "insulted" at an offer under the listing price.

You just don't know until it happens. As pointed out above, sellers sometimes will accept offers they said beforehand they'd reject. And sometimes they reject offers that are within a range that they'd told their agent they'd accept.

My son hopes to compete in MMA (mixed martial arts). He's already very good a traditional martial arts, wrestling, grappling, and jiu jitsu. But in MMA (as in boxing, kick boxing, and muay thai), you can get hit in the face. And that can change everything. It doesn't faze some people at all. Others can't stand it, or their entire game plan goes out the window. And there's really no way of predicting how any one person will react until it actually happens to them. You can talk a great game, you can be skilled in other aspects of the sport, but until you get hit in the face, you don't know how you'll react. Brutal analogy, I know, but it's the same with an offer--especially a low offer--coming in. Until it actually happens, there's no way to tell how the seller will react.

Posted by Donald Tepper, DC area investor helping heirs of inherited homes (Long and Foster) about 8 years ago

Thanks so much for this post! It is so frustrating when you write the offer after all the work of providing comps and weighing, previewing competition and then poof! No counter. It is frustrating to both buyers and their agents, not to mention the occational listing agent :)

all the best...

Posted by Bill Saunders, Realtor®, www.BillSellsHotSprings.com (Meyers Realty) about 8 years ago

I'm so glad you went public with this because it's all so true.

I always tell my sellers that we counter any and all offers, even if they seem insulting. There are buyers out there who just want to see how low the seller is willing to go, and insist on lowballing prices.  They may really want the home and are very willing to come up in the price, if need be, but they want to see how desperate the sellers might be. 

I tell my buyers that if they put in that insulting offer, we have to hope for that Counter Offer, since I know that a lot of sellers won't issue them, and if we get that counter, it's time to play serious.  I've done deals that involved up to 10 counter offers but both parties were very happy at the end.  It's not always price thats the issue, its the terms, but anything and everything can be worked out if both parties really want to sell/buy the home.

Posted by Cyndi Mino, SFR, e-PRO (First Team Real Estate) about 8 years ago

Post #76 is alarming, "we knew from the seller's agent what his bottom line was"...  How would they know that, and isn't that a breach of ethics on the part of the sellers' agent?  We are supposed to be the professionals in the transaction, yet many times, I've found that the other agent behaves very unprofessionally.  Additionally, many agents offer way too much information about their clients' situation - which puts their clients at a deficit.  If we keep our cool, and act professionally, then our clients will respond likewise (most of the time, there are always exceptions!!). 

It's our job to arm our sellers with the information that will assist them in making good decisions.  I prepare all my sellers for the fact that they will receive low-ball offers, and that we will counter all offers.  I don't give them the option not to counter.  I also explain to them that legally, I must present all offers to them.  If we prepare our clients at the start, we are more likely to avoid these situations.  "You catch more bees with honey" is my motto.  If we go back to the buyers' agent in a non-confrontational manner, with a reasonable counter-offer based on facts and comps, we can usually keep the negotiations alive.  If not, then the buyers were truly testing the water, and maybe were not very serious about the property.

Posted by Debra Chiarello about 8 years ago

I've had this happen to me TWICE within the last month!  Both Buyers moved on TO OTHER PROPERTY!

Silly Sellers!!!  They both lost a potential sale!

Posted by Kathy Opatka, Serving Ocean City, MD, & The Delaware Beaches (RE/MAX CROSSROADS) about 8 years ago

Great post, Dan! As my broker/owner has said for years, "It's not where you start out, it's where you finish that counts!"

Posted by David Barnas (Century 21 Tullish & Clancy) about 8 years ago

Dan,

As per your advice, this is a business transaction, and not countering is a very appropriate tool in more situations than one.

I have suggested it to  my buyers quite a few times. No matter what the market is, the Seller is not obligated to engage with Buyers, who are beyond being reasonable.

The fishing pond is still there, whether you counter or not. It does not change a thing.

You can't believe how much power no counter has. People do not like it, and they either move (which is unavoidable whether you counter or not), or they start taking it seriously.

Also, the fact that someone put the offer in writing indicates... not much beyond putting the offer in writing. It can still be a slap on the face... just in writing

Posted by Jon Zolsky, Daytona Beach, FL, Buy Daytona condos for heavenly good prices (Daytona Condo Realty, 386-405-4408) about 8 years ago

The more consumers that see this, the better!  Something for agents and sellers alike to consider.

Posted by Lisa Hultgren (Prudential California Realty) about 8 years ago

Always, always, always counter!  When I have had sellers that didn't want to counter an initial offer I have encouraged them to think about what they would counter if the offer hadn't insulted them, and then get them to counter that.  No counter, the buyer walks.  It's pretty simple.

Posted by Ken Gramley about 8 years ago

I agree completely. I've had several situations in which the seller didn't want to counter, but after my talking them into doing so anyway, we ended up with a sold house. ALWAYS counter!

Posted by Ryan Hukill - Edmond, Realtor, Team Lead (ShowMeOKC Real Estate Pros of KW Elite) about 8 years ago

Great Post.  Even if the seller counters at full price, you never know when a buyer wants the house so bad and just wants to check out the waters first and will pay full price.  It is foolhardy not to counter!!!

Posted by Mary Macy, Top Agents Atlanta Metro (Top Agents Atlanta Metro) about 8 years ago

I wish there were a way to ensure every seller saw this. Excellent post. Simply excellent.

Posted by Peggy Wester, Real Estate Agent Ozaukee & Washington County (Realty Executives Integrity) about 8 years ago
Great advice. If only the sellers would listen. You can lead a horse to water but.....
Posted by Kathie Burby, REALTOR, SFR, Tuolumne County Real Estate Guide (Coldwell Banker Mother Lode Real Estate) about 8 years ago

Many sellers need that advise and guidance.  Realtors need to say these things to their clients when presenting offers.  If your sellers don't listen refer back to all of the posts about unrealistic sellers and if you should be handling their listing at all.

Posted by Dawnita Griffith, It does matter who you hire. (Meadow Lake Real Estate, LLC) about 8 years ago

I list a lot of foreclosures.  I love when a buyer low balls and then I get a full price offer from someone else.  These buyers just don't get it.  No, you can't really buy a home for a dollar!

Posted by Heidi Hovatter - Sonora & Twain Harte, Heidi The Home Hunter (Century 21 Wildwood - Selling Homes and Cabins in Tuolumne County) about 8 years ago

Low ball offers are certainly frustrating.  But if sellers would only realize that having someone interested is just the beginning.  I've received many low ball offers that were nothing more than the buyers testing the seller.  One of my most recent experiences was when a buyer low balled my seller and then ended up buying the property for just $2,000 under list price.  It took an inordinate amount of time to calm the seller down and explain why she "needed" to counter.  She was so angry and insulted that she didn't even want to deal with the buyer.  Even though we eventually got them to come up to a realistic price, she was angry with them through the entire transaction and it showed in how she countered the repairs and in how she felt when she vacated the property.  Since the buyers in this case were just "testing the waters," they probably would have gotten more from her had they not insulted her right from the start. 

Posted by Lisa Ackerson, CRS - Dallas Fort Worth Area Expert (Fathom Realty DFW) about 8 years ago

Great Blog and great advice for sellers.

Now if you can only get the Agents on board...

Posted by Tom Waite, So Cal-Apartment Bldg Investments (Thomas Waite Real Estate Broker) about 8 years ago

I don't agree that a counter is always warranted.  I had a buyer make an offer $30K below list price (list was $299K and reasonably priced).  The buyers were financing with an FHA loan and they were only putting down 10K.  They didn't have enough of a down payment to make it work unless my seller agreed to take their lowball offer.  My seller didn't counter and the buyer walked, but the buyer was just fishing to see if they could someone to cave to the highest price they could afford.

Posted by Ashley Harris about 8 years ago

First of all, here in Florida, an offer only $30,000 under asking is not considered a lowball offer.  I would have immediately countered with 295,000 to let them know what I expected to receive back as a counter from them. 

Second, did you represent the buyers as well as the sellers?  If not, how do you know the true buying situation of the people making the offer?  Maybe they just have a very good agent who negotiates well and is trying to get the them the best deal.

I believe that the simple action of countering takes only a few minutes and is in the best interest of the seller.  I say this based on the last 6 "low-ball" offers I have received and negotiated into successful closings. 

Posted by Marnie Matarese, Showing you the best of Sarasota! (DWELL REAL ESTATE) about 8 years ago

Thias is good stuff Dan. I always want to counter.

Posted by Wayne B. Pruner, Tigard Oregon Homes for Sale, Realtor, GRI (Oregon First) about 8 years ago

Well put Dan.  I believe you never want the deal to die in your hands.Even if we need to keep countering at the same dollar figure.

Posted by Jason Beattie (Professional Realty Group) about 8 years ago

Dan, great post & so true! Sometimes the first offer is the best offer, as we have found out oh too often, in this declining market!

I like this the best:  "Do your best to leave your emotions out of this!"

Posted by Don Wixom, "Looking out for your next move..."tm (RE/MAX Advantage Nampa, ID) about 8 years ago

Dan, I completely agree, always look for what is possible.

Posted by Juston and Stephanie Dickson (Exit Realty Success) almost 8 years ago

Great post!  We don't see quite as many lowball offers as we did in 08 & 09, but whenever we do receive them...I always feel like I have to walk on eggshells in presenting it to not offend sellers.  I agree 100% that you have to check the emotion at the door, forget the fact that you laid the brick walk way with your own 2 hands (father of the bride, part 2) and just deal with the matter at hand.  Make a counter, negotiate, and see if a deal can be made...if not, move on.

Posted by Matt Robinson, www.professionalinvestorsguild.com (Professional Investors Guild) over 7 years ago
We made an offer on a 39,000 home. Not a great neighborhood it was a rental also. The home had some repairs done like vinyl siding and a 6 year old roof. But, It needed new windows some were broke out, It has a tree growing into the home it didn't have any steps on the doors and was a 2 ft drop it needed about 6,000 in additional repairs. We offered 28,000. With the thoughts we would possibly go to 32,000 at the MOST. His counter offer came back at 38,000. My agent was argumentative with me, saying there is no way it would cost that much in repairs, We took a guy over to give us an estimate. You really don't want to be like that to a potential buyer. I decided not to counter offer. She had been telling me that he was very ready to sell so we low balled it hoping he would come back with a counter offer that was fair. Well neither happened.. Agents...Be careful how you treat your buyer...Being rude will drive them away also. Just my 2 cents worth.
Posted by jo call over 5 years ago
Oh and by the way...We were going to pay cash.
Posted by jo call over 5 years ago

Jo, it sounds like your agent was not very responsive to your concerns but I think that this particular post is more about how a counter offer, no matter how high or how low, either keeps the buyer in play or lets the buyer know what the price expectation of the seller is.  As an agent, I can not make the counter offer decision price for my seller but I can certainly encourage that a counter be made.  Sorry that you had a bad experience but it seemed to be more about the agent than the fact that the seller has the right to set the price of a counter.

 

Posted by Marnie Matarese, Showing you the best of Sarasota! (DWELL REAL ESTATE) over 5 years ago

This blog does not allow anonymous comments