First (Lowball) Offer Received
Tip It!Well, our house hit the multiple listing service (MLS) the night before last, and three families came to look at it yesterday. Last night our realtor called to say that we had received a lowball offer from the first people that looked at it. On top of an insultingly low offer (especially considering the house has barely even been on the market), they’re not pre-approved, they’ll need 100% financing if they can even qualify, and they asked for a couple of things that we explicitly said weren’t included, and aren’t negotiable (including our kids’ Rainbow play structure). And they only put down $500 earnest money. We didn’t even dignify it with a counteroffer. Rather, we responded (through our realtor) that they should get pre-approved and then come back with a realistic offer. On the bright side, we’ve had a considerable amount of interest already, which suggests that it’s not wildly overpriced.
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Published on April 7th, 2006 - 16 Comments
Filed under: Moving
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16 Responses to “First (Lowball) Offer Received”
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April 7th, 2006 at 7:14 am
Hey, if they can qualify, don’t knock going 100%. http://21stcmb.typepad.com/the....._cons.html
April 7th, 2006 at 7:52 am
Maybe these people have been reading too many housing bubble blogs and think that the real estate market is collapsing overnight or something. While we’re defintely getting back into the era of offering a tad below list price again, there’s still enough steam left in the seller’s market that people shouldn’t expect to snatch up a house at bargain price.
April 7th, 2006 at 7:55 am
Define “lowball.”
We once made an offer that was 10% below the asking price. The seller wouldn’t even counteroffer.
The next house we did the same, the owner counteroffered at 5% below, and we closed. I sit in that house at this moment.
I know in some hot markets your offer needs to be above the asking price, but not in my fair rust belt city.
April 7th, 2006 at 8:02 am
Those low-ball offers can be frustrating, particularly when the house just went on the market – it feels so much more insulting. I totally understand a low-ball when a house that has been sitting on the market for at least six months, but less than a week? I’m not surprised you didn’t respond with a counter.
As far as 100% financing, you don’t really care how much they finance, as long as you are convinced that they are good for it. That means they need to have that pre-approval in place. Saying “we don’t even have the money for a down payment and we don’t even know if a bank will give us the financing” is a pretty immature position from which to float an offer. Were they working with a realtor? You would have expected they would have received better advice than that.
April 7th, 2006 at 8:18 am
I agree with Lisa, where the funds come from as long as there is some sort of assurance it can be funded and the deal won’t collapse two weeks in is all that’s necessary.
Perhaps the buyer does think the market has softened enough in your area to put a lowball-w/o-pre-approval offer on a 1 wk old house… or they just don’t know they’re lowballing (if say it’s 10% under). When people were buying houses many many years ago, no one paid asking price.
April 7th, 2006 at 7:23 pm
Just to clarify, we’re not particularly concerned about the 100% financing as long as they can get it… Our main concern is that beyond having no money for a down payment, they don’t have enough for a decent amount of earnest money ($500? Come on…), and there’s no evidence that a bank will look favorably upon them.
Oh, and it’s not a week old, and the market here isn’t weak (or even weakening). While the sign had been up for about a day and a half, the house had been in the MLS for about 12 hours when they walked through it and then made their offer.
April 7th, 2006 at 11:35 pm
Yeah, it can be frustrating as a seller, but maybe they were just trying to see where you stood by starting low. Who knows, for all they know, you have a job starting on Monday and have to go quickly (I know, it is unlikely with this particular couple from the sounds of it…I am just playing Devil’s Advocate).
Just out of curiousity, how long do you have before you “really” need to have the house sold? We ended up selling waaaay too early on our last house (it was the first people and they offered just over asking). I think that we could have waited a lot longer and gotten even more (plus we wouldn’t have had to spend 9 months in an apartment waiting for our new house to be built).
Good luck with it all.
April 8th, 2006 at 12:29 pm
I don’t know if the amount of earnest money should deter a decent offer. We had 100% financing and only $500 for earnest money. Our realtor actually recommended $500 because of the market. I guess it would depend on that as well. Still, we were pre-approved before we made any offers. We bought a house 2 weeks after we started looking and closed 3 weeks later.
April 8th, 2006 at 2:02 pm
Hmmmm … $500 was all I put down for my house. But then again, I offered what they were asking.
April 9th, 2006 at 8:41 am
$500 for ernest money is normal arround here. Also, I wound’t really trust pre-approval until the deal goes through.
April 10th, 2006 at 11:37 am
Don’t get too cocky. Depends on where you live. I live in NYC and put in an offer 20% below the asking price (which was actually the fair price based on price per square foot for the neighborhood)
At any rate, they finally called 2 months later to accept our “insulting bid!” Too bad for them we had already found a place.
It’s still on the market at below our bid!
May 9th, 2006 at 7:29 pm
umm, maybe there’s a housing bubble?
see patrick.net
May 9th, 2006 at 7:44 pm
umm, maybe the lowballers were smoking crack. We ended up getting 98% of our asking price in six days. Actually, it only took three days for them to make their offer, and a few more days to work out the details regarding timing, etc.
May 13th, 2006 at 2:55 pm
“Don’t get too cocky. Depends on where you live. I live in NYC and put in an offer 20% below the asking price (which was actually the fair price based on price per square foot for the neighborhood)
At any rate, they finally called 2 months later to accept our “insulting bid!†Too bad for them we had already found a place.
It’s still on the market at below our bid!
Comment by JB — April 10, 2006 @ 11:37 am ”
—————————————–
JB: May i have the info about that house? (hcemail@gmail.com)… my sister is looking for a house in NYC.. All asking price is way too high…
Thanks,
Howard
May 15th, 2006 at 3:03 pm
I tell people on the phone that my offer is 30% below retail. I have no power over these sellers and they can say yes, or they can say no. I don’t see why there are hard feelings.