Posted on February 10, 2011
I recently had a conversation with a good client of mine. We'll be listing her house for sale shortly. She's a smart woman and well aware of what the market is like for sellers right now. She had a tough question for me. She wanted to know, if she got an offer on her house, just how low an offer price would someone be willing to write up and should she be offended if an offer came in really low.
It's a tough question because there is just no way to predict just how low an offer someone might write. We can make our best effort to price the property appropriately but that doesn't necessarily mean a thing to a buyer. For instance, there are any number of buyers out there "...looking for a deal!" They are fishing more than anything to see how desperate a seller is. They'll write any offer on a whim if there is the smallest chance someone might accept it. On the other hand there are well educated buyers out there that seriously want to buy a good house, recognize where the market is, write a good offer but still negotiate hard to get their price. Gone are the buyers that are willing to pay full price or over asking price just to lock it up before someone else gets the house.
So, which of those buyers might she have write an offer? Any. All. None.
To me the easier part of the question to answer was whether she should be offended by any low offers. This I could answer with an emphatic "no!" My client was very surprised by this. She felt that any offer that was "too low" shouldn't have been written in the first place. She was preparing herself for the shock of a low offer and getting ready to be offended.
Of course, I suspect that she sees the offer only from her viewpoint as a seller. She thinks that she has the value of her house figured out dead on (maybe she does, maybe she doesn't, really doesn't matter to me for this discussion). I spent some time explaining to her that from a buyers perspective they could view her asking price to be just as offensively high from their perspective as she viewed their offer to be offensively low from her perspective.
My perspective as a Realtor is probably different still. I am absolutely thrilled by any and all offers. To me they are a starting point to negotiate around. Maybe nothing will come of it because the gap is simply too large between asking price and offer price. But, with an offer in hand at least it gives me something to work with. I know who to talk to, spend my time with learning goals, motivations, needs, wants, whatever. Something is better than nothing.
Likewise, regardless of how low the offer is, I always encourage my clients to respond to it (as opposed to just ignoring it) even if they only come of their asking price fractionally. Again, it just makes good sense to me to keep the conversation going between the two parties and hopefully put a deal together that both sides are happy with.
But, it got me thinking. Would you be offended with a really low offer on your house? Or alternatively as a buyer, would you refuse to write a low offer on a house with a high price because you think it might be offensive?
Come one, tell me, how low are you willing to go?
I know there are agents out there reading this with strongly held opinions on this... I want to hear from you too and to encourage you I'll dish on myself. The lowest offer I have helped a client write up was at... drum roll... 57% of asking price!
Anyone else ever go that low? Is there a low that is too low?
-Chris