I picked up the phone, said â€œhello,â€ and the first words out of my fellow realtorâ€™s mouth were, â€œWow, thatâ€™s a low offer!â€ She was referring to the contract I sent over on behalf of a client earlier in the day. She genuinely seemed surprised, but I was puzzled by her comment. I wondered if sheâ€™d been working in the same real estate market Iâ€˜ve been working in for the last year.
Maybe Iâ€™m naÃ¯ve, but I thought by now everyone should be used to receiving low purchase-price offers. Iâ€™ve had a beautiful, new construction, 2,500-square-foot ranch with a three-car garage on the market for the last six months. Even though itâ€™s listed for $370,000, we regularly received offers in the $310,000 range. Iâ€™m so used to seeing a buyer ask for $30,000, $40,000 or even $60,000 off the asking price it doesnâ€™t even make me blink.
For the last 18 months, itâ€™s been common to have low offers in some market segments. And Iâ€™m sure theyâ€™ll keep coming in a while longer. How long? That will depend on a number of factors. For example, will inventory continue declining, giving buyers fewer choices? Can people get loans at reasonable rates? What will happen with the general economy?
Thankfully, low offers arenâ€™t as common in all market segments. Homes $300,000 and below can still bring full-price offers. Why? Weâ€™ll discuss that issue in a column later this month.
If low ball offers are the norm for now, we might as well figure out how to handle them. If youâ€™re a seller, donâ€™t be offended and react from anger. Itâ€™s not a personal insult. Itâ€™s probably not even a direct reflection of your home. Itâ€™s simply the market. If youâ€™re a buyer, this is your chance to perhaps get more home for your money. If youâ€™re an agent, remember this deal works both ways. You canâ€™t be surprised or taken back when you get a low offer on your listing, but then turn around and have no problem submitting low offers on other realtorsâ€™ listings.