Selling home - low ball negotiation

Non-investing personal finance issues including insurance, credit, real estate, taxes, employment and legal issues such as trusts and wills
Rudedog
Posts: 213
Joined: Wed Aug 01, 2018 3:15 pm

Re: Selling home - low ball negotiation

Post by Rudedog » Sat May 16, 2020 9:56 am

I've bought and sold several houses. My first offer to buy is always 7% to 10% below list price with purchase subject to inspection, and I want to negotiate with the seller. When I sell a house, I always have a minimum price I will sell for in mind, but the initial listing is based on local comps and realtor advice. If the house has been on the market only a week or two, 10% discount seems high unless you are desperate to sell. After two months, you may want to seriously consider the offer. I've always found that older buyers tend to think their house is worth more than it really is, they are insulted by offers below asking price, and many times they take it off the market when they can't get their asking price. Its business, not personal.

User avatar
Topic Author
htdrag11
Posts: 1197
Joined: Wed Nov 02, 2011 9:22 pm

Re: Selling home - low ball negotiation

Post by htdrag11 » Sat May 16, 2020 10:34 am

8foot7 wrote:
Sat May 16, 2020 8:16 am
I light have missed it, but why do you want to move? Clarifying what your objective is in the grander scheme can help you figure out what your number is. Is the sale of this home unlocking the possibility of something else?
Good question. Our idea is that when we get older, climbing stairs or going down to basement would be a pain. We've been in the house for just 30 years, so feel like it's time to move on to something smaller like an adult community. Comments were immaculate and clean but "outdated". They love the location and the outside ground/open lot.

Sale of this home would not impact our lifestyle. Proceeds from the sales would more than offset our next home. As someone pointed out, we are not as motivated for seller which was pointed out by our own agent who sold our neighbor's last year. However, our former neighbor was much more motivated and sold the house at a discount.

User avatar
galawdawg
Posts: 656
Joined: Thu Dec 14, 2017 12:59 pm
Location: Georgia

Re: Selling home - low ball negotiation

Post by galawdawg » Sat May 16, 2020 10:56 am

htdrag11 wrote:
Sat May 16, 2020 10:34 am
As someone pointed out, we are not as motivated for seller which was pointed out by our own agent who sold our neighbor's last year. However, our former neighbor was much more motivated and sold the house at a discount.
Unfortunately in your case, comps don't take into account the motivation levels of the buyer and seller. So as a result of your motivated neighbor selling at a discount last year, he/she created a comp that may have contributed to lowering the fair market value of your home or at least caused potential buyers of your home to "devalue" what your home has to offer compared to your neighbors fully renovated but discounted sale.

Good luck.

MathWizard
Posts: 4055
Joined: Tue Jul 26, 2011 1:35 pm

Re: Selling home - low ball negotiation

Post by MathWizard » Sat May 16, 2020 11:16 am

htdrag11 wrote:
Thu May 14, 2020 9:44 pm
Afty wrote:
Thu May 14, 2020 8:18 pm
Did I read your post correctly that they offered 10% of your asking price?! If that’s the case, I don’t see much point in negotiating. That seems like a bad faith offer IMO.
No. They offered around 89% of the asking price.
11% below your asking price is not lowballing. You, potentially with the realtor's advice) set the asking price.

When I bought my house, a fixer upper, they wanted $130K. The house had been on the market for 6 months.
I offered $115K, which is what I thought the house was worth. They rejected the offer.
3 months later the realtor called me up and said the sellers had asked if I would still buy at $115K.
I considered offering less, since interest rates had risen in that time, making my payments
higher, but I went ahead with the figure that I had established as the value of the house (to me).

cheapindexer
Posts: 39
Joined: Tue Feb 02, 2016 2:33 pm

Re: Selling home - low ball negotiation

Post by cheapindexer » Sat May 16, 2020 12:39 pm

Completely ignore the offer

You counter when you have a reasonable offer , if you

Counter now you have lost major ground

When we sold our houses we didn’t do a thing with the offers until we talked to our friends in the business world who do it all the time

Ignore the offer . Let it expire . They will be back

When you respond quickly an experienced negotiator will smell your desperation

Ignore the low ballers !!

corysold
Posts: 891
Joined: Mon Mar 24, 2014 12:58 pm

Re: Selling home - low ball negotiation

Post by corysold » Sat May 16, 2020 1:29 pm

The average house sells for around 97% of list price.

10% is low, but it isn't insulting.

The other point is, the value of your home is what someone is willing to pay for it. That's it. It doesn't matter what you think it is worth.

If you aren't willing to sell for less that 2-3% of list, come back at 1% off, make it known your intention and go from there. For all you know their Realtor might have suggested the first offer and they love the house and will pay full price in the end.

User avatar
Topic Author
htdrag11
Posts: 1197
Joined: Wed Nov 02, 2011 9:22 pm

Re: Selling home - low ball negotiation

Post by htdrag11 » Tue May 19, 2020 9:44 pm

Well, I did not have the courage to ignore the lowballer. Shame on me!

Anyway, after a long negotiating session over 6 days, we ended up coming down 6% from our listing price to close the deal. Several factors in place (my justification or CYA):
- very few showings during the listing period of 10 weeks (lockdown occur 10 days after listing)
- our house is not a traditional colonial; it's rather unique in our area
- we have one single offer
- average selling period in my neighbor is 6 months
- have a very dim view of the housing market due to the virus and its longer term impact, despite more showings starting last week due to the weather and we're in Phase 1 of the re-opening period
- a house we were interested in relisted last week, but dropped its price by 2.6%

While under attorney review, we put a bid for that house.

Just for laughs, I did put down a bottom line number back in March what we would accept. It was 3% less than what we got.

barberakb
Posts: 178
Joined: Fri Apr 21, 2017 11:14 pm

Re: Selling home - low ball negotiation

Post by barberakb » Wed May 20, 2020 1:24 am

cheapindexer wrote:
Sat May 16, 2020 12:39 pm
Completely ignore the offer

You counter when you have a reasonable offer , if you

Counter now you have lost major ground

When we sold our houses we didn’t do a thing with the offers until we talked to our friends in the business world who do it all the time

Ignore the offer . Let it expire . They will be back

When you respond quickly an experienced negotiator will smell your desperation

Ignore the low ballers !!
This is bad advice IMO. If you are trying to sell you should always counter. Even if your counter is no thanks, we are firm on our price.

A realtor I worked with had a great saying. He always advised his clients not to get emotional, even if it is a low offer. He said never let the ball die on your side of the court.

Gronnie
Posts: 278
Joined: Sun Oct 19, 2014 2:08 pm

Re: Selling home - low ball negotiation

Post by Gronnie » Wed May 20, 2020 1:31 am

When we bought our house in January we made a reasonable offer and the sellers countered back at full ask.

We would have gladly met in the middle (expected it even), but instead we resubmittet the original offer and said it was our best and final. They took it and could have gotten more if they would have negotiated in good faith.

Afty
Posts: 1260
Joined: Sun Sep 07, 2014 5:31 pm

Re: Selling home - low ball negotiation

Post by Afty » Wed May 20, 2020 1:50 am

htdrag11 wrote:
Tue May 19, 2020 9:44 pm
Well, I did not have the courage to ignore the lowballer. Shame on me!

Anyway, after a long negotiating session over 6 days, we ended up coming down 6% from our listing price to close the deal. Several factors in place (my justification or CYA):
- very few showings during the listing period of 10 weeks (lockdown occur 10 days after listing)
- our house is not a traditional colonial; it's rather unique in our area
- we have one single offer
- average selling period in my neighbor is 6 months
- have a very dim view of the housing market due to the virus and its longer term impact, despite more showings starting last week due to the weather and we're in Phase 1 of the re-opening period
- a house we were interested in relisted last week, but dropped its price by 2.6%

While under attorney review, we put a bid for that house.

Just for laughs, I did put down a bottom line number back in March what we would accept. It was 3% less than what we got.
Congratulations on closing the deal! I think you did just fine. Given that you received no other offers in 10 weeks, I don't think you could have done any better.

ScubaHogg
Posts: 428
Joined: Sun Nov 06, 2011 3:02 pm

Re: Selling home - low ball negotiation

Post by ScubaHogg » Wed May 20, 2020 1:54 am

cmr79 wrote:
Fri May 15, 2020 7:27 pm
And yet they do. I think it was Malcolm Gladwell who compiled some data that agents leave their own houses on the market longer and sell for more, controlling for everything else.
This was from Freakonomics...similar style of writing, of course.
Thanks, couldn’t quite recall
“There is no problem so bad you can’t make it worse.” - Chris Hatfield, Astronaut mantra

shelanman
Posts: 556
Joined: Tue Feb 27, 2007 8:35 pm

Re: Selling home - low ball negotiation

Post by shelanman » Wed May 20, 2020 2:19 am

livesoft wrote:
Fri May 15, 2020 8:35 am
My main point is that I often read of this "meeting halfway" thing. People only want to buy and sell at what they think is a fair price for them. It may have nothing to do with what you think is a fair price for you.
There's a whole book on that topic, by an ex-hostage-negotiator, called "Never Split the Difference"

User avatar
stickman731
Posts: 314
Joined: Sun Jan 01, 2012 10:42 am
Location: New Jersey

Re: Selling home - low ball negotiation

Post by stickman731 » Wed May 20, 2020 4:58 am

Glad to see you came to an agreement. I suspect that you are either from NJ, LI, CT because of your comments on NYC. I would never trust Zillow. If you are from NJ, I would use the Open Public Record System to check comparable comps and taxes - you will need to change the dropdown menus but it is valuable free tool.

https://oprs.co.monmouth.nj.us/oprs/Ext ... spx?iId=13

User avatar
Topic Author
htdrag11
Posts: 1197
Joined: Wed Nov 02, 2011 9:22 pm

Re: Selling home - low ball negotiation

Post by htdrag11 » Wed May 20, 2020 6:57 am

shelanman wrote:
Wed May 20, 2020 2:19 am
livesoft wrote:
Fri May 15, 2020 8:35 am
My main point is that I often read of this "meeting halfway" thing. People only want to buy and sell at what they think is a fair price for them. It may have nothing to do with what you think is a fair price for you.
There's a whole book on that topic, by an ex-hostage-negotiator, called "Never Split the Difference"
Wow! It's never too late to learn.

User avatar
Topic Author
htdrag11
Posts: 1197
Joined: Wed Nov 02, 2011 9:22 pm

Re: Selling home - low ball negotiation

Post by htdrag11 » Wed May 20, 2020 6:59 am

stickman731 wrote:
Wed May 20, 2020 4:58 am
Glad to see you came to an agreement. I suspect that you are either from NJ, LI, CT because of your comments on NYC. I would never trust Zillow. If you are from NJ, I would use the Open Public Record System to check comparable comps and taxes - you will need to change the dropdown menus but it is valuable free tool.

https://oprs.co.monmouth.nj.us/oprs/Ext ... spx?iId=13
Yes. We're consider Central Jersey, per Gov. Murphy's Covid map. I found out how much our neighbor across the street sold their house for a month ago. We intentionally list ours at $15k less.

User avatar
Topic Author
htdrag11
Posts: 1197
Joined: Wed Nov 02, 2011 9:22 pm

Re: Selling home - low ball negotiation

Post by htdrag11 » Wed May 20, 2020 7:00 am

Afty wrote:
Wed May 20, 2020 1:50 am

Congratulations on closing the deal! I think you did just fine. Given that you received no other offers in 10 weeks, I don't think you could have done any better.
Thanks but the fat lady had not sung yet.

User avatar
galawdawg
Posts: 656
Joined: Thu Dec 14, 2017 12:59 pm
Location: Georgia

Re: Selling home - low ball negotiation

Post by galawdawg » Wed May 20, 2020 7:10 am

It sounds like your process is going well. If the sale of your house closes for the contracted price, you'll have obtained a purchase price that is 3% higher than what your "bottom line" number was. And by having your house under contract, you are in a stronger negotiating position for the house you made an offer on (assuming the purchase of that house is contingent on the sale of your current house).

Hope everything goes smoothly from this point forward.

User avatar
Watty
Posts: 19335
Joined: Wed Oct 10, 2007 3:55 pm

Re: Selling home - low ball negotiation

Post by Watty » Wed May 20, 2020 8:54 am

htdrag11 wrote:
Tue May 19, 2020 9:44 pm
- a house we were interested in relisted last week, but dropped its price by 2.6%

While under attorney review, we put a bid for that house.

Just for laughs, I did put down a bottom line number back in March what we would accept. It was 3% less than what we got.
Was your offer by any chance 10% less than the asking price? :D

If this sale had not worked out then you might have reduced the asking price on your house some anyway since the spring selling season is winding down and your house has already been listed for 10 weeks.

One other thing to consider is that mortgage rates have dipped again and you will likely be getting a great interest rate on your new mortgage. If it took longer to sell your house for a bit more you could have "won the battle but lost the war" if interest rates are higher a few months from now.

There are a lot of moving parts including getting the the sale of your home through the inspection and actually closing. Try to keep the big picture in mind if any issues come up with the inspection since it sounds like there are a lot of positives with the way things seem to be working out.

User avatar
Topic Author
htdrag11
Posts: 1197
Joined: Wed Nov 02, 2011 9:22 pm

Re: Selling home - low ball negotiation

Post by htdrag11 » Wed May 20, 2020 10:15 pm

Watty wrote:
Wed May 20, 2020 8:54 am
htdrag11 wrote:
Tue May 19, 2020 9:44 pm
- a house we were interested in relisted last week, but dropped its price by 2.6%

While under attorney review, we put a bid for that house.

Just for laughs, I did put down a bottom line number back in March what we would accept. It was 3% less than what we got.
Was your offer by any chance 10% less than the asking price? :D

If this sale had not worked out then you might have reduced the asking price on your house some anyway since the spring selling season is winding down and your house has already been listed for 10 weeks.

One other thing to consider is that mortgage rates have dipped again and you will likely be getting a great interest rate on your new mortgage. If it took longer to sell your house for a bit more you could have "won the battle but lost the war" if interest rates are higher a few months from now.

There are a lot of moving parts including getting the the sale of your home through the inspection and actually closing. Try to keep the big picture in mind if any issues come up with the inspection since it sounds like there are a lot of positives with the way things seem to be working out.
No such luck, though the house is only within 15 minutes of driving distance. We're planning to move into an adult community, thus supplies are limited. Our other choice would have been a ranch, which again is in short supply unless we're willing to go for an older home.

Our offer is actually only like 3.5% below list. Recently, 3 homes in this community went either above list, or within 2%. None of these sales accept contingency. The only thing going for us would be a cash deal, so mortgage rate below 3% meant nothing to us. We're both retired so can't take out a loan based on my understanding.

We're also aware that the spring season got shorten by the virus, so we lost valuable time.

User avatar
Cubicle
Posts: 839
Joined: Sun Sep 22, 2019 1:43 am

Re: Selling home - low ball negotiation

Post by Cubicle » Thu May 21, 2020 12:08 am

I feel like I've been a jerk the past few years. My initial offers have all been 15-20% below asking price. For my current house, my initial offer was 18% below asking. The counter was slightly higher than my offer, I got it for 17% below asking in the end.

If I were selling, I'd never think an incoming offer of 10% below asking was an insult. ~30% is where I'd start considering that. And even then I'd counter offer. No harm to counter, costs me nothing except a few minutes of time.

>40% below asking, I'd not counter.

:confused :confused :confused

OP congrats on the deal. I'm also in the Central Jersey area.
"Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓

palanzo
Posts: 650
Joined: Thu Oct 10, 2019 4:28 pm

Re: Selling home - low ball negotiation

Post by palanzo » Thu May 21, 2020 12:12 am

Cubicle wrote:
Thu May 21, 2020 12:08 am
I feel like I've been a jerk the past few years. My initial offers have all been 15-20% below asking price. For my current house, my initial offer was 18% below asking. The counter was slightly higher than my offer, I got it for 17% below asking in the end.

If I were selling, I'd never think an incoming offer of 10% below asking was an insult. ~30% is where I'd start considering that. And even then I'd counter offer. No harm to counter, costs me nothing except a few minutes of time.

>40% below asking, I'd not counter.

:confused :confused :confused

OP congrats on the deal. I'm also in the Central Jersey area.
How would you feel if you were selling your house and got an offer 30% below asking price?

barberakb
Posts: 178
Joined: Fri Apr 21, 2017 11:14 pm

Re: Selling home - low ball negotiation

Post by barberakb » Thu May 21, 2020 1:21 am

palanzo wrote:
Thu May 21, 2020 12:12 am
Cubicle wrote:
Thu May 21, 2020 12:08 am
I feel like I've been a jerk the past few years. My initial offers have all been 15-20% below asking price. For my current house, my initial offer was 18% below asking. The counter was slightly higher than my offer, I got it for 17% below asking in the end.

If I were selling, I'd never think an incoming offer of 10% below asking was an insult. ~30% is where I'd start considering that. And even then I'd counter offer. No harm to counter, costs me nothing except a few minutes of time.

>40% below asking, I'd not counter.

:confused :confused :confused

OP congrats on the deal. I'm also in the Central Jersey area.
How would you feel if you were selling your house and got an offer 30% below asking price?
I would feel they were trying to land a deal. And would gladly counter at whatever price I felt comfortable with.

User avatar
Cubicle
Posts: 839
Joined: Sun Sep 22, 2019 1:43 am

Re: Selling home - low ball negotiation

Post by Cubicle » Thu May 21, 2020 10:51 pm

palanzo wrote:
Thu May 21, 2020 12:12 am
How would you feel if you were selling your house and got an offer 30% below asking price?
barberakb wrote:
Thu May 21, 2020 1:21 am
I would feel they were trying to land a deal. And would gladly counter at whatever price I felt comfortable with.
Yeah, this ^^^ . I'd look at the "low" offer, tell myself "they're doing it my way", & then counter.

Is 30% below asking something to actually get upset over? Serious question, I don't know.

I'd rather have "low" offers than no offers. The value of anything is what others are willing to pay, not what you price it at.
"Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓

WildBill
Posts: 587
Joined: Wed Jun 29, 2016 10:47 pm
Location: San Antonio, Texas

Re: Selling home - low ball negotiation

Post by WildBill » Thu May 21, 2020 11:36 pm

palanzo wrote:
Thu May 21, 2020 12:12 am
Cubicle wrote:
Thu May 21, 2020 12:08 am
I feel like I've been a jerk the past few years. My initial offers have all been 15-20% below asking price. For my current house, my initial offer was 18% below asking. The counter was slightly higher than my offer, I got it for 17% below asking in the end.

If I were selling, I'd never think an incoming offer of 10% below asking was an insult. ~30% is where I'd start considering that. And even then I'd counter offer. No harm to counter, costs me nothing except a few minutes of time.

>40% below asking, I'd not counter.

:confused :confused :confused

OP congrats on the deal. I'm also in the Central Jersey area.
How would you feel if you were selling your house and got an offer 30% below asking price?
Howdy

I would smile, recognizing a kindred spirit.

Happy haggling

W B
"Through chances various, through all vicissitudes, we make our way." Virgil, The Aeneid

palanzo
Posts: 650
Joined: Thu Oct 10, 2019 4:28 pm

Re: Selling home - low ball negotiation

Post by palanzo » Fri May 22, 2020 12:59 am

Cubicle wrote:
Thu May 21, 2020 10:51 pm
palanzo wrote:
Thu May 21, 2020 12:12 am
How would you feel if you were selling your house and got an offer 30% below asking price?
barberakb wrote:
Thu May 21, 2020 1:21 am
I would feel they were trying to land a deal. And would gladly counter at whatever price I felt comfortable with.
Yeah, this ^^^ . I'd look at the "low" offer, tell myself "they're doing it my way", & then counter.

Is 30% below asking something to actually get upset over? Serious question, I don't know.

I'd rather have "low" offers than no offers. The value of anything is what others are willing to pay, not what you price it at.
It it was 30% below I would not even respond. I would expect my realtor would not bring such an offer to me.

palanzo
Posts: 650
Joined: Thu Oct 10, 2019 4:28 pm

Re: Selling home - low ball negotiation

Post by palanzo » Fri May 22, 2020 12:59 am

WildBill wrote:
Thu May 21, 2020 11:36 pm
palanzo wrote:
Thu May 21, 2020 12:12 am
Cubicle wrote:
Thu May 21, 2020 12:08 am
I feel like I've been a jerk the past few years. My initial offers have all been 15-20% below asking price. For my current house, my initial offer was 18% below asking. The counter was slightly higher than my offer, I got it for 17% below asking in the end.

If I were selling, I'd never think an incoming offer of 10% below asking was an insult. ~30% is where I'd start considering that. And even then I'd counter offer. No harm to counter, costs me nothing except a few minutes of time.

>40% below asking, I'd not counter.

:confused :confused :confused

OP congrats on the deal. I'm also in the Central Jersey area.
How would you feel if you were selling your house and got an offer 30% below asking price?
Howdy

I would smile, recognizing a kindred spirit.

Happy haggling

W B
It it was 30% below I would not even respond. I would expect my realtor would not bring such an offer to me.

Arabesque
Posts: 84
Joined: Mon Jan 08, 2018 9:56 am

Re: Selling home - low ball negotiation

Post by Arabesque » Fri May 22, 2020 7:14 am

How a realtor evaluates comps and prices your house is a rhetorical game. To get you to sign with them, they sometimes evaluate high, when it is unlikely to sell at that price. To move the property fast, they can evaluate low. My house, soon to be on the market, had three realtor appraisals, spanning $50K, about a 1/5 of the total price ($200-250K LCOL). I pick the middle realtor("just right") because of her sales plan, but I don't know what appraisal is realistic.

For years I have been finding comps for my current house to fight the town's assessment. I can usually find persuasive comps and drop the appraisal about 30-40K. Real estate prices are highly negotiable.

spectec
Posts: 1512
Joined: Mon Jul 14, 2014 8:00 am

Re: Selling home - low ball negotiation

Post by spectec » Fri May 22, 2020 7:24 am

barberakb wrote:
Wed May 20, 2020 1:24 am
cheapindexer wrote:
Sat May 16, 2020 12:39 pm
Completely ignore the offer

You counter when you have a reasonable offer , if you

Counter now you have lost major ground

When we sold our houses we didn’t do a thing with the offers until we talked to our friends in the business world who do it all the time

Ignore the offer . Let it expire . They will be back

When you respond quickly an experienced negotiator will smell your desperation

Ignore the low ballers !!
This is bad advice IMO. If you are trying to sell you should always counter. Even if your counter is no thanks, we are firm on our price.

A realtor I worked with had a great saying. He always advised his clients not to get emotional, even if it is a low offer. He said never let the ball die on your side of the court.
Absolutely correct. I'd do business with this realtor any day of the week. He understands negotiation. I cringe whenever I hear someone say they are "insulted" by an offer. That's an emotional response and has no place in business. And for a realtor to use such language is unforgivable, unless it's said in jest. I've "insulted" the seller with every home I've ever purchased and have "insulted" the buyer with every home I've ever sold. So what? It's business, not family.

I wonder how many deals die on the table simply because the other party and their agent didn't have enough business acumen to know how (or when) to counter. (BTW, the "when" is every single time)
Don't gamble; take all your savings and buy some good stock and hold it till it goes up, then sell it. If it don't go up, don't buy it. - Will Rogers

investingdad
Posts: 1719
Joined: Fri Mar 15, 2013 10:41 pm

Re: Selling home - low ball negotiation

Post by investingdad » Fri May 22, 2020 7:45 am

We've only sold one house, that was in 2010. We were aggressive in our price relative to other sellers in our neighborhood, we still had to come down almost 10% to close.

I wasn't insulted.

I was just glad to get out of there. Years of road noise was driving me crazy. Must not have bothered the buyer cause I think they are still there.

BW1985
Posts: 2039
Joined: Tue Mar 23, 2010 6:12 pm

Re: Selling home - low ball negotiation

Post by BW1985 » Fri May 22, 2020 8:49 am

Momus wrote:
Fri May 15, 2020 12:41 am
I'd counter 10k above asking price. They mocked you and they should know.
89% of asking price is not a mock, it's a serious offer. If they don't like it they can decline, no reason to be an idiot about it though.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

BW1985
Posts: 2039
Joined: Tue Mar 23, 2010 6:12 pm

Re: Selling home - low ball negotiation

Post by BW1985 » Fri May 22, 2020 8:53 am

htdrag11 wrote:
Tue May 19, 2020 9:44 pm
Well, I did not have the courage to ignore the lowballer. Shame on me!

Anyway, after a long negotiating session over 6 days, we ended up coming down 6% from our listing price to close the deal. Several factors in place (my justification or CYA):
- very few showings during the listing period of 10 weeks (lockdown occur 10 days after listing)
- our house is not a traditional colonial; it's rather unique in our area
- we have one single offer
- average selling period in my neighbor is 6 months
- have a very dim view of the housing market due to the virus and its longer term impact, despite more showings starting last week due to the weather and we're in Phase 1 of the re-opening period
- a house we were interested in relisted last week, but dropped its price by 2.6%

While under attorney review, we put a bid for that house.

Just for laughs, I did put down a bottom line number back in March what we would accept. It was 3% less than what we got.
Given everything you laid out I think you should feel pretty good about only 6% below your listing price. Had you not came to this agreement, who knows if/when your home would sell.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

delamer
Posts: 9951
Joined: Tue Feb 08, 2011 6:13 pm

Re: Selling home - low ball negotiation

Post by delamer » Fri May 22, 2020 9:19 am

htdrag11 wrote:
Wed May 20, 2020 10:15 pm
Watty wrote:
Wed May 20, 2020 8:54 am
htdrag11 wrote:
Tue May 19, 2020 9:44 pm
- a house we were interested in relisted last week, but dropped its price by 2.6%

While under attorney review, we put a bid for that house.

Just for laughs, I did put down a bottom line number back in March what we would accept. It was 3% less than what we got.
Was your offer by any chance 10% less than the asking price? :D

If this sale had not worked out then you might have reduced the asking price on your house some anyway since the spring selling season is winding down and your house has already been listed for 10 weeks.

One other thing to consider is that mortgage rates have dipped again and you will likely be getting a great interest rate on your new mortgage. If it took longer to sell your house for a bit more you could have "won the battle but lost the war" if interest rates are higher a few months from now.

There are a lot of moving parts including getting the the sale of your home through the inspection and actually closing. Try to keep the big picture in mind if any issues come up with the inspection since it sounds like there are a lot of positives with the way things seem to be working out.
No such luck, though the house is only within 15 minutes of driving distance. We're planning to move into an adult community, thus supplies are limited. Our other choice would have been a ranch, which again is in short supply unless we're willing to go for an older home.

Our offer is actually only like 3.5% below list. Recently, 3 homes in this community went either above list, or within 2%. None of these sales accept contingency. The only thing going for us would be a cash deal, so mortgage rate below 3% meant nothing to us. We're both retired so can't take out a loan based on my understanding.

We're also aware that the spring season got shorten by the virus, so we lost valuable time.
Retired people get mortgages all of the time. People qualify based on fixed income sources (like Social Security and pensions), and their level of liquid assets in some cases. The latter are called asset depreciation loans: https://www.kiplinger.com/article/retir ... tgage.html

User avatar
8foot7
Posts: 2005
Joined: Mon Jan 05, 2015 7:29 pm

Re: Selling home - low ball negotiation

Post by 8foot7 » Fri May 22, 2020 10:00 am

barberakb wrote:
Wed May 20, 2020 1:24 am
cheapindexer wrote:
Sat May 16, 2020 12:39 pm
Completely ignore the offer

You counter when you have a reasonable offer , if you

Counter now you have lost major ground

When we sold our houses we didn’t do a thing with the offers until we talked to our friends in the business world who do it all the time

Ignore the offer . Let it expire . They will be back

When you respond quickly an experienced negotiator will smell your desperation

Ignore the low ballers !!
This is bad advice IMO. If you are trying to sell you should always counter. Even if your counter is no thanks, we are firm on our price.

A realtor I worked with had a great saying. He always advised his clients not to get emotional, even if it is a low offer. He said never let the ball die on your side of the court.
We made an offer on a house where the seller felt as if he had his price and it was Wal-Mart and you paid sticker or left. We liked the house so much we probably would have talked ourselves into paying asking after a few volleys, although we made a lower offer because of some issues. The sellers never countered, never did anything, just let our offer expire with no response. It pissed me off so much we crossed off the house from our list. The house stayed on the market for a while even as others in the neighborhood that weren't as nice sold. I do not recommend this approach.

LittleMaggieMae
Posts: 178
Joined: Mon Aug 12, 2019 9:06 pm

Re: Selling home - low ball negotiation

Post by LittleMaggieMae » Fri May 22, 2020 10:30 am

The open post says they got an offer that's 10% lower than the asking price.

example: 250K asking price - the offer was 225K.

I would imagine the OP has gone thru the numbers on their house sale: how much the realtor(s) will get at closing, any other expense they will pay.
which means they should have a "target" amount they will walk away with at closing. Which means they know what range of $$ they hope to walk away with at closing.

How much of a sale price below 250K will get the OP to their "target" range after closing? That answers how the OP should handle the low ball offer.. if they must have a contracted sale price of $250,000.00 then they counter offer the bid with 250K sale price - firm.

Just a reminder - the realtor gets a cut of the contract sale price. It is in their best interest to get as high a sale price as they can. That looks like it's in the sellers best interest - but it might not be - the seller is paying all the bills for the property while waiting for someone to bid the asking price. The realtor has no skin in the game and probably has other irons in the fire. I'm not really dissing realtors. I'm just saying be aware of their motivations - they aren't ONLY 'your best interest'.

supersecretname
Posts: 124
Joined: Tue Sep 01, 2015 2:33 pm

Re: Selling home - low ball negotiation

Post by supersecretname » Fri May 22, 2020 11:02 am

LittleMaggieMae wrote:
Fri May 22, 2020 10:30 am
It is in their best interest to get as high a sale price as they can...I'm not really dissing realtors.
It's in their best interest to move the house as fast as possible. An extra $10k in selling price is only $300 more in income, and that will be shared with the rest of the office as well.

I'm dissing realtors. What a stupid and antiquated model.

BW1985
Posts: 2039
Joined: Tue Mar 23, 2010 6:12 pm

Re: Selling home - low ball negotiation

Post by BW1985 » Fri May 22, 2020 11:55 am

supersecretname wrote:
Fri May 22, 2020 11:02 am
LittleMaggieMae wrote:
Fri May 22, 2020 10:30 am
It is in their best interest to get as high a sale price as they can...I'm not really dissing realtors.
It's in their best interest to move the house as fast as possible. An extra $10k in selling price is only $300 more in income, and that will be shared with the rest of the office as well.

I'm dissing realtors. What a stupid and antiquated model.
+1. I see it as a conflict of interest myself. Agents want to close deals as quickly as possible, sellers want to get the highest sale price.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

Arabesque
Posts: 84
Joined: Mon Jan 08, 2018 9:56 am

Re: Selling home - low ball negotiation

Post by Arabesque » Fri May 22, 2020 12:06 pm

Realtors want to sell a house as quickly as possible once they list a house, but they may list at a high price to lure the seller into listing with them. After they "win" the listing, they can go for the low bids. Not all realtors work like this, but some do.

delamer
Posts: 9951
Joined: Tue Feb 08, 2011 6:13 pm

Re: Selling home - low ball negotiation

Post by delamer » Fri May 22, 2020 3:19 pm

BW1985 wrote:
Fri May 22, 2020 11:55 am
supersecretname wrote:
Fri May 22, 2020 11:02 am
LittleMaggieMae wrote:
Fri May 22, 2020 10:30 am
It is in their best interest to get as high a sale price as they can...I'm not really dissing realtors.
It's in their best interest to move the house as fast as possible. An extra $10k in selling price is only $300 more in income, and that will be shared with the rest of the office as well.

I'm dissing realtors. What a stupid and antiquated model.
+1. I see it as a conflict of interest myself. Agents want to close deals as quickly as possible, sellers want to get the highest sale price.
Not all sellers are looking exclusively for the highest offer. Our house is going on the market soon. We are more focused on a fairly quick sale and finding a buyer with excellent qualifications, because we want to get the house off our hands. Top dollar isn’t the goal.

I have a good friend serving as our realtor, who is smart and experienced. Some of the realtor bashing here is uncalled for. There are incompetent, money grubbers in every line of work. And if you think the business model is bad and realtors don’t add value, then do a “for sale by owner” or a flat fee realtor. Houses get sold that way every day.

hudson
Posts: 2707
Joined: Fri Apr 06, 2007 9:15 am

Re: Selling home - low ball negotiation

Post by hudson » Fri May 22, 2020 3:42 pm

delamer wrote:
Fri May 22, 2020 3:19 pm
I have a good friend serving as our realtor, who is smart and experienced. Some of the realtor bashing here is uncalled for.
I agree. I had to sell an acre of land on some water. A friend recommended a realtor. She did a great job of coaching me. She said that she would not take my property until I got a building permit for a 3 bedroom, 2 bath house. She said that the property probably wouldn't pass the perk/ septic tank test. It took me a lot of work to get the permit because the land did not perk. A month or two later, she put it up for sale and it sold in 2 months. She said without the building permit, I could not compete with the many developments in the area that already had sewer and water services.

We got only one person interested in the property. The other owners were insulted by the first low bid; I wasn't. We always responded promptly. The bidder never knew how the other owners felt. Some times, we dropped the price, some times we didn't.
Last edited by hudson on Fri May 22, 2020 3:52 pm, edited 1 time in total.

BW1985
Posts: 2039
Joined: Tue Mar 23, 2010 6:12 pm

Re: Selling home - low ball negotiation

Post by BW1985 » Fri May 22, 2020 3:50 pm

delamer wrote:
Fri May 22, 2020 3:19 pm
And if you think the business model is bad and realtors don’t add value, then do a “for sale by owner” or a flat fee realtor. Houses get sold that way every day.
Oh definitely will be.
"Squirrels figured out how to save eons ago. They buried acorns. Some, they dug up, for food. Others, they let to sprout, in new oak trees. We could learn from squirrels." -john94549

Pomegranate
Posts: 270
Joined: Mon Oct 01, 2018 4:42 pm

Re: Selling home - low ball negotiation

Post by Pomegranate » Fri May 22, 2020 4:06 pm

Rudedog wrote:
Sat May 16, 2020 9:56 am
I've bought and sold several houses. My first offer to buy is always 7% to 10% below list price with purchase subject to inspection, and I want to negotiate with the seller.
Try this trick in SFBA :mrgreen: :mrgreen:

User avatar
Topic Author
htdrag11
Posts: 1197
Joined: Wed Nov 02, 2011 9:22 pm

Re: Selling home - low ball negotiation

Post by htdrag11 » Fri May 22, 2020 10:26 pm

palanzo wrote:
Fri May 22, 2020 12:59 am

It it was 30% below I would not even respond. I would expect my realtor would not bring such an offer to me.
One was about to offer on the same day but even lower than 11%. Our agent discouraged the offer which I concurred. Later I found out their parents lived just around our corner development (different ball game) where the 1% or 10% lives.

User avatar
Topic Author
htdrag11
Posts: 1197
Joined: Wed Nov 02, 2011 9:22 pm

Re: Selling home - low ball negotiation

Post by htdrag11 » Fri May 22, 2020 10:32 pm

Attorney review is done. So water testing and inspection are next, then going through the town's inspection for a C.O.

Meanwhile, we decided not to raise our bid on the house which we felt was a solid offer. Will end up renting for a year and continue to look due to limited inventory.

On a separate topic, what is the value added of a buyer's agent? I found our seller's agent worked very hard for her money.

User avatar
Cubicle
Posts: 839
Joined: Sun Sep 22, 2019 1:43 am

Re: Selling home - low ball negotiation

Post by Cubicle » Fri May 22, 2020 11:05 pm

htdrag11 wrote:
Fri May 22, 2020 10:32 pm
Attorney review is done. So water testing and inspection are next, then going through the town's inspection for a C.O.

Meanwhile, we decided not to raise our bid on the house which we felt was a solid offer. Will end up renting for a year and continue to look due to limited inventory.

On a separate topic, what is the value added of a buyer's agent? I found our seller's agent worked very hard for her money.
Curious: why not raise the bid? Not worth it, or you've capped your purchase price?

My buyer's agent (I'm presuming my realtor when I bought) was very valuable up to getting my offer accepted. He negotiated a large reduction in the sale price. But honestly after that, he didn't do much. It was myself & my lawyer doing everything. He just played telephone operator, relaying messages & calls between people. Nice guy, I still chat with him. But he got a nice check at closing & was wondering to myself...
"Oh look another bajillion point declin-Ooooh!!! A coupon for pizza!!!!" <--- This is what everyone's IPS should be. ✓✓✓

annu
Posts: 590
Joined: Mon Nov 04, 2019 7:55 pm

Re: Selling home - low ball negotiation

Post by annu » Fri May 22, 2020 11:31 pm

I would suggest to visit Biggerpockets. They(buyers) seem to be aware of your profile, I have read some posts where they discuss strategies based on seller profile. Maybe looking to add a rental home.

Research into your home as product you are trying to sellCheck into what kind of options are possible for your home.
if it is a bigger lot, can you add an ADU or you have a detached room that can converted into rental for house hacking while living there.
Sadly realtors will not help, as they are many of the times, not selected to be realtors based on unqiue skills( :twisted: not to make RE folks angry), but like an engineer has to have study/education related to their field of work, many trades similarly require similar knowldge. A relator could be someone who many times through connections has an option and after clearing exam they are on to selling homes, most of the times, not doing much besides setting up showing. I helped few of my friends and with my basic knowledge was able to find issues that were obvious to me a home owner, no way an RE person would miss them, unless they dont care about the product they helping sell/buy, just focussing on their cut.
(All my experience, I have been wrong many times before, so not saying this is universal)

Seems like you are close to retirement age. One thing I will suggest, do not move home into pending, as if they make even more demands on top of lower bid, you will have no choice but to put it back on market, and many other buyers can be concerned why home came back on market.
If home is old, normally the inspection will always find something that you will have to pay for repairs, old roof, paint, windows, septic, list goes on.
But the fact they are starting 10% low, which is a lot, I have gut feeling, this is probably not end of it, and there will be more from their end. Maybe you can ask them to finish inspections or as someone else said buy as is.

If at all you go with them, work with realtor and see if there are ways you can still take more offers.
I have seen folks use the fact they home is pending to make even more demands. I was in a situation once, and went with me gut and backed out completely, as at the end of the day, will liek to work with folks who are not full trying to benefit at my cost.
Also while home buying will get tough, new home building will slow down a bit as well, I read it is already down 30%, so availability of homes will be affected as well.

Best of luck!1

User avatar
Topic Author
htdrag11
Posts: 1197
Joined: Wed Nov 02, 2011 9:22 pm

Re: Selling home - low ball negotiation

Post by htdrag11 » Sat May 23, 2020 9:05 am

annu wrote:
Fri May 22, 2020 11:31 pm
I would suggest to visit Biggerpockets. They(buyers) seem to be aware of your profile, I have read some posts where they discuss strategies based on seller profile. Maybe looking to add a rental home.

Research into your home as product you are trying to sellCheck into what kind of options are possible for your home.
if it is a bigger lot, can you add an ADU or you have a detached room that can converted into rental for house hacking while living there.
Sadly realtors will not help, as they are many of the times, not selected to be realtors based on unqiue skills( :twisted: not to make RE folks angry), but like an engineer has to have study/education related to their field of work, many trades similarly require similar knowldge. A relator could be someone who many times through connections has an option and after clearing exam they are on to selling homes, most of the times, not doing much besides setting up showing. I helped few of my friends and with my basic knowledge was able to find issues that were obvious to me a home owner, no way an RE person would miss them, unless they dont care about the product they helping sell/buy, just focussing on their cut.
(All my experience, I have been wrong many times before, so not saying this is universal)

Seems like you are close to retirement age. One thing I will suggest, do not move home into pending, as if they make even more demands on top of lower bid, you will have no choice but to put it back on market, and many other buyers can be concerned why home came back on market.
If home is old, normally the inspection will always find something that you will have to pay for repairs, old roof, paint, windows, septic, list goes on.
But the fact they are starting 10% low, which is a lot, I have gut feeling, this is probably not end of it, and there will be more from their end. Maybe you can ask them to finish inspections or as someone else said buy as is.

If at all you go with them, work with realtor and see if there are ways you can still take more offers.
I have seen folks use the fact they home is pending to make even more demands. I was in a situation once, and went with me gut and backed out completely, as at the end of the day, will like to work with folks who are not full trying to benefit at my cost.
Also while home buying will get tough, new home building will slow down a bit as well, I read it is already down 30%, so availability of homes will be affected as well.

Best of luck!1
Thanks for the tips, Cubicle and Annu. In our case, we backed out the purchase since the staircase could be daunting down the line and DW did not need extra bathrooms to clean (she is quite fuzzy and did not care for some of the cleaning people from the past). Our buyer's agent actually want us to pay at close to the asking price but we offered at 3.6% while the buyer came down 0.8%. The seller's agent was surprised that the owner was not willing to accept. They happen to both work for the same agency. Thus I did not find my agent add much value in this particular case. She is very knowledgeable about this community since she lives in it from day one.

So, if our current buyers make unusual demands at closing, we could walk out since our exit strategy would have been renting. Our only leverage is that the wife is due in August so she has incentive to close as well with limited inventory (as we are in the same bot as buyers). They are living with their parents a mile from us, not looking at this as rental opportunity. At this point in our lives , 6% "loss" did not break our bank. We're downsizing anyway. However, it's time to move on after 30 years.

Post Reply