Connecticut Real Estate Blog - Real Real Estate in CT

I recently put my house on the market.  This experience has given me a little perspective on the real estate market - and in particular the “low-ball offer.” As a buyers agent, I’ve only been on the delivering side of a low-ball offer, not the receiving end.  As the owner and agent for this house, I can now say what has worked for me and what definitely did not work for an agent who recently presented me with a low-ball offer.

My House

I am realistic about the value of my house and the market (so we all say).  Had I sold my house 6-8 months ago, I could have asked $10,000 more.  However the time of year and market conditions required an aggressive price so I swallowed my pride and listed it for less than I really wanted to.  I also knew that I wanted it to sell fast so I spruced it up: power-washing, painting, refinishing wood floors, staging and cleaning.   Priced right and in great condition, I felt the house would sell quickly. 

Enter the first offer - the low-ball.  The agent, Agent X, presented me with an offer for $40,000 less than the list price.  I admit that I was shocked, annoyed and nervous.  Maybe I misjudged the value and he market?  Ultimately, I was confident in the quality of the listing and did not select the offer for several reasons, some of which I’ll go into below.  The house is now under deposit for very close to the asking price.  Here’s why the offer didn’t make it - maybe it can help some of you.

How To Doom The Low-ball Offer

• Send an incomplete offer.The offer was delivered to me without a valid pre-approval letter.  Without every piece of information, how is a seller supposed to make a decision?  While the buyer was getting the letter updated, other offers came in.
• Agent doesn’t back up the offer.  This can be hard for agents but if you’re presenting a low-ball offer, the agent must support it.  Agent X admitted right away that she “told the buyer that the offer was too low.”  That’s not something I would be proud of, certainly not to admit it to another agent.  
• Agent/client insults seller. If you’re presenting a low-ball offer, the price is already insult enough.  Don’t make it worse by making comments about the house - it doesn’t say much about your taste, then, if you’re the one trying to buy it.  Agent X made this mistake by telling me that one of the bedrooms couldn’t be counted because the ceiling height was too low and that the house was too small.  Note: The house is a full-dormered cape with a gable dormer in the front.  I responded to her that my husband and I, who are 6′3″ and 6′ respectively, never had an issue and the town agreed the space was living space.
• Agent doesn’t do homework. When I questioned Agent X about how she came up with this figure, she told me that her client ran comparables.  My first thought was, “and what did you do?  Just write up the offer?”  Anyway, I spent the time to go over the comparables I ran that justified an even higher price than what I was asking.  It seemed to me that the price her client came up used properties not normally comparable with single family homes, PUDs. 
• Just let the offer float. Agent X sent the offer to me by fax with no cover sheet and only a call to make sure I received it.  No explanation, no justification. Nothing.  I had to ask all the questions.

How to Win with a Low-ball Offer

• Present a complete offer and explanation.  Asking a seller to come down significantly on their price requires a leap of faith on their part.  Sellers need to know why the offer is lower than the listing price - is it because the comparables say so, the market is declining, the buyers are well qualified but can’t go higher.
• Back it up with facts. If the comparables show a lower price, I’ll forward them to the listing agent.  I won’t be obnoxious about it - I’ll just say, “here’s what I used to come up with a value, so you can tell your client.”
• Play on insecurities without making negative comments about the house. I ask questions that remind the agent that the house has been sitting on the market like ”how many offers have you received on the house?” “how long has it been on the market?”  (even if I see on the listing sheet).  I may also comment on how many houses are on the market in the area or price range.  I try not to say anything negative about the house or condition, unless the agent asks. 
• Make the offer otherwise sweet. When I’ve presented successful low-ball offers, I’ve asked the buyers to give up something else to entice the seller.  For example, I would ask the buyer to put a larger security deposit, have the inspection faster than normal, have the commitment faster, close earlier or later (depending on the seller), for example.  Low-ball offers also work best when the buyer doesn’t have anything to sell.