How To Handle Unreasonable Low Offers

How To Handle Unreasonable Low Offers

How To Handle Unreasonable Low Offers

 

So you've been working with an experienced agent to get your home on the market  and it's priced within what comparable properties have sold in your area. A few days on the market and along comes not only a low ball offer but a quite  unreasonable low ball offer with mutiple contingencies. I call this kind of offer a "double whammy" offer! A recent story below, will explain How To Handle Unreasonable Low Offers. But, the first piece of advice I give  to sellers is  - don't get mad or emotional about unreasonable, low or both type of offers. I know How To Handle Unreasonable Low Offers logically and effectively and can guide you through the selling process.

 

The story. Our sellers priced their home correctly for their area and their competition which were a LOT of $1M ++ brand new homes, selling fairly quickly, with all the bells and whistles buyers are looking for in today's market. While the sellers home was absolutely lovely and included a guest house, pool house, 4 car garage and RV garage it was a bit dated so we priced the home with that in mind.  I knew the right buyers would come along and see the incredible value of the home, amenities, gorgeous acre lot and gated community.

 

The first offer on the table came in and I couldn't believe it and I had to look twice at what a ridiculous "double whammy" offer it was!  It was an unreasonably low offer and add to that, it was contingent on 2 homes selling and closing - that weren't even on the market yet - plus a bogus approval letter was submitted with the offer for one of the buyers. Seriously? I am sure you can see all that could go wrong in that scenario! The sellers stayed calm and decided to turn down the offer. I  left communication open with the buyers agent stating that the sellers would be open to the buyers submitting another, reasonable offer including the terms and conditions that the 2 homes would be, at the very least in escrow, and to submit proper proof of qualification for these buyers as well as for buyers on their homes in escrow.

 

Yes I know, it sounds complicated! At times dealing with multiple offers is very complex, but we have closed many homes with multiple buyers and sellers over the years so it can work out successfully. The above buyers were blending 2 families and I had a feeling they were not all on the same page about living together. They had looked at the home 4 or 5 times and it seemed one family wanted it more than the other. I never heard from their agent again so my hunch was spot on, the buyers weren't that serious or they would have submitted a reasonable offer to begin with or at the very least the 2nd time around.

 

A few weeks or so later, the sellers did receive a reasonable starting offer, with proper qualification from another buyer. With a little back and forth negotiation they did come to a meeting of the minds and it closed 30 days later. Success for the sellers and buyers - a win win.

 

As I mentioned above, it's always a wise idea to stay calm after receiving a less than reasonable offer, especially while attempting to negotiate a  better, reasonable offer. And sometimes, as this story tells, some offers simply are not workable and it's wise to move forward to the next offer. The key to handling unreasonable and low offers is to hire an experienced agent that knows the market well and can guide you through the process as seamlessly as possible. If you are thinking of selling or buying a Phoenix area home, give me a call and let's talk.

 

Originally Published at Phoenix Property Shoppe

 

 How To Handle Unreasonable Low Offers

 

Phoenix Property Shoppe
  

 

 

Anna "Banana" Kruchten
Designated Broker & Owner
CRB, CRS, GRI, CNE, SFR, CDPE, WLS


Phoenix Homes For Sale

 

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Comments

Good afternoon Anna. How smart you are. No reason to get upset or crazy when this was just a wild balloon anyway.

Posted by Sheila Anderson, The Real Estate Whisperer Who Listens 732-715-1133 (Referral Group Incorporated) 6 months ago

Hi Anna Banana Kruchten CRB, CRS 602-380-4886, unfortunately, this happens, some are really ridiculous though. Your sellers are fortunate to have you as a listing agent. 

Posted by Beth Atalay, Cam Realty of Clermont FL (Cam Realty and Property Management) 6 months ago

When offers have come in unreasonably low and with untenable contingencies, I have had selllers simply reject the offer outright, and not get into an elongated process of countering back and forth to what is likely to be of no avail.  And, like you, I keep the lines of communication with the buyer agent open, should the buyer become a serious buyer rather than a recreational one!  

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) 6 months ago

CONGRATULATIONS Anna, on having this blog FEATURED in the Old Farts Club group!  

Posted by Myrl Jeffcoat, Greater Sacramento Real Estate Agent (GreatWest Realty) 6 months ago

Anna,

I have seen these "wonderful" low ball offers.  You gave your seller great guidance, to stay calm as well left an open door for the buyers agent to begin again.  Congratulations on getting the deal closed with the perfect buyer.  A

Posted by Ron and Alexandra Seigel, Luxury Real Estate Branding, Marketing & Strategy (Napa Consultants) 6 months ago

I am seeing an increase in low ball offers and there is no reason for them. I tell my sellers to counter everything

Posted by Scott Godzyk, One of Manchester NH's Leading Agents (Godzyk Real Estate Services) 6 months ago

It’s important we remain calm so we can think clearly and not overreact, and demonstrate to our clients they need to stay calm, too. Not always easy!

Posted by Melissa Spittel, "Achieving Results Together " (Coldwell Banker Residential Brokerage) 6 months ago

So important Anna Banana Kruchten CRB, CRS 602-380-4886  to keep the seller calm in these situations. With a  professional agent like you on their side, everything worked out. You found a serious buyer that met their expectations.

Posted by Hannah Williams, Expertise NE Philadelphia & Bucks 215-953-8818 (Re/Max Eastern inc.) 6 months ago

When my clients receive such ridiculous offers, especially from buyers' agents, their name and agency are posted to my interrogative list.  Fortunately, there are few on that list so it's easy to discern them. 

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) 6 months ago

I always remind my sellers that every offer will be presented ,  from the ridiculous to the sublime. To the buyers agents  a quote from real estate sales trainer David Knox  "if you come in low into this house you will not go"

Posted by Michele Cadogan-Cell 917-861-9166, Licensed Real Estate Associate Broker - (Fillmore Real Estate 2990 Av U, Bklyn , NY 11229) 6 months ago

Great advice!  I have a listing right now that is priced extremely well and received an extremely low offer which obviously the seller turned down

Posted by Terry McCarley, REALTOR, SRES, CDPE - Cape Coral, FL (REMAX Realty Team - Cape Coral FL) 6 months ago

Sheila Anderson that's a great way to call it - wild ballon! Let it go!!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Beth Atalay yes every once in awhile we all get these run don't walk away offers. I never have understood why they insist on this kind of offer - when it's known it won't fly.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Myrl Jeffcoat exactly! You and I are on the same page with this stuff. And thanks for the feature in Old Fart's Group!!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Ron and Alexandra Seigel lol wonderful offer, right! Darn right stupid offer but not as funny as the 'empty offer' I received a few years ago.  Everything was initialed and signed but a blank offer. Go figure that one out!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Scott Godzyk I learned from my very first broker when it's a smart strategic move to walk away and not counter....and leave the door open for a reasonable offer. He taught me well to spot them and this was one of the no brainers.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Melissa Spittel so true sometimes some sellers have a tough time staying unemotional but that doesn't work out so well in the long run. There are solutions to just about everything we we stay open to them.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Hannah Williams it is so important for everyone to remain calm during the selling/buying process.  Agreed, having a professional agent on your side makes a big difference, doesn't it. I knew the right buyer would come along sooner rather than later - it was an amazing property!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Kimo Jarrett yes I know the list you are talking about. And thank goodness mine is a short list too.  Just put one on it the other week and I hope never to have to work with that agent again!!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Michele Cadogan-Cell 917-861-9166 absolutely present all offers to the seller. Love that saying - "if you come in low to this house you will not go".

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Terry McCarley good luck on getting an offer on that listing!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 6 months ago

Well done, Anna- The key begins at the beginning when a seller chooses the very best agent they can to guide them through the process. Without one those lowball offers can go nowhere. 

Posted by Kathy Streib, Home Stager - Palm Beach County,FL -561-914-6224 (Room Service Home Staging) 6 months ago

You have such great skill as an agent to properly handle anything real estate can throw at you! Good thing for your clients to have you to give such sound advice.

Posted by Teri Eckholm, REALTOR Serving Mpls/St Paul North & East Metro (Boardman Realty) 5 months ago

You gave your sellers great advice, don't get offended and don't take it personally when you receive a low-ball offer. It's extremely difficult but stay open minded. You read the prospective buyers perfectly and provided excellent advice on that offer. If there is a way to make it work, experienced agents can make it happen, but in your example, there was no way that offer would fly. Happy for you and your clients that the second offer was much more realistic and worked out for all concerned.

Posted by Pat Starnes-Front Gate Realty, 601-991-2900 Office; 601-278-4513 Cell (Front Gate Real Estate) 5 months ago

I agree with you--be courteous dealing with unreasonable offers and sometimes they are 'wow is that buyer serious?" with all the stipulations and contingencies. Still you are there to negotiate the best deal for your sellers and that means look at all offers, act accordingly.

Posted by Mary Hutchison, SRES, ABR, Experienced Agent in Kansas City Metro area (Better Homes and Gardens Real Estate-Kansas City Homes) 5 months ago

 My sellers are briefed from the get go of how we should react to lowball offers asking for closing costs. It has resulted in several full price offers with no conditions...

Posted by Paul S. Henderson, REALTOR®, CRS, Tacoma Washington Agent/Broker & Market Authority! (RE/MAX Northwest.) 5 months ago

Taking the high road, not taking it personal, and keeping the door open is always wise advice. So was your advice to the agent representing the low ball offer. Smart you - and now it's sold. Well done, Anna. 

Posted by Debb Janes EcoBroker and Bernie Stea JD, REALTORS® in Clark County, WA (ViewHomes of Clark County - Nature As Neighbors) 5 months ago

Great job Anna!  Your calm demeanor and no nonsense business approach won the day and the sale!  Kudos!

Posted by Jan Green, HomeSmart Elite Group, REALTOR®, EcoBroker, GREEN (Value Added Service, 602-620-2699) 5 months ago

Great topic and information. I am in Austin TX and just went through this situation. Your advise is spot on. Thanks

Posted by Donna Watson, GRI (Central Realty, LLC) 5 months ago

Hello Anna - it's a situation most in real estate have experienced but it certainly 
"hurts" a seller in a different way.  How can we make this work or is it even workable?  The positive aspects of the offer along with the obvious negatives  may help in coming to a suitable conclusion.  Maybe.  Then again maybe not.  

Posted by Michael Jacobs, Los Angeles Pasadena 818.516.4393 5 months ago

Spot on. Complicated and unreasonable. Not a serious contender.

Posted by Rose Mary Justice, Synergy Realty Pros (Synergy Realty Pros) 5 months ago

Knowing what you’re worth can be readily applied to so many things in life. Great post!

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) 5 months ago

For anything to be a contender it Hass to be able to volley back-and-forth a bit, Rose Mary Justice

Posted by Laura Cerrano, Certified Feng Shui Expert, Speaker & Researcher (Feng Shui Manhattan Long Island) 5 months ago

Great post Anna. No use getting upset. It's an offer like any other, more often than not, those buyers see the value, otherwise they would not bother making an offer. What they see is a predatory opportunity. Always worth a try. Like fishing and see what you get.

Posted by Richard Bazinet /MBA, CRS, ABR, Phoenix Scottsdale. Sellers, Buyers & Relocations (West USA Realty) 5 months ago

I have many more deals with inexperienced agents now that they aren’t weeded out like they were before everyone had a team.

Posted by Derrick Guevremont, Rochester MN Homes for Sale (Counselor Realty of Rochester) 5 months ago

There is always a reason beneath the offer, nice job digging and finding the underlying story. I always recommend not giving a counter to very low offer and say we are too far apart and tell the agent to have them try again with a more reasonable offer next time.

Posted by Buzz Mackintosh, “Experience, reliable, leadership” (Mackintosh REALTORS) 5 months ago

Good Morning Anna,

An experienced agent such as yourself had mastered cool countenance when confronted with low ball offers. 

And this is crucial to be able to address this with the seller.

Thank you.

Posted by Maria Gilda Racelis, Home Ownership is w/in Reach. We Make it Happen! (Home Buyers Realty, LLC-Manchester, Bolton. Vernon,Ellington) 5 months ago

In Texas, we have a form called Sellers Invitation to Buyer to Submit New Offer. It's not a counter offer and leaves the sellers free to accept another buyer's offer without waiting to hear from the lowballers. On the form, the buyers "are invited to submit another offer, which Seller may more favorably consider if" and there are multiple blank lines to list what might make a more favorable offer. I've used it multiple times. Sellers love it. Buyer's agents hate it.

Posted by Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417, Real Service. Real Results. Real Estate (United Real Estate) 5 months ago

I basically tell the buyer agent if you want to write a low ball offer don't waste your time. It will not be presented.

If you bad mouth my listing not in top school I will not be able help you to get deals going in the future. 

Posted by Sam Shueh, mba, cdpe, reopro, pe ( (408) 425-1601) 5 months ago

Briefing sellers in advance about many of the common pitfalls they may likely experience seems to be the key to keeping things moving forward.

Posted by Jill Sackler, LI South Shore Real Estate - Broker Associate (Charles Rutenberg Realty Inc. 516-575-7500) 5 months ago

Kathy Streib I agree it's very important for home sellers to hire and experienced agent to guide them through the process sucessfully.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Teri Eckholm as you know many of us got here by learning from those that went ahead of us. I was fortunate to have an excellent broker to mentor me in my early years as an agent.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Pat Starnes-Front Gate Realty agreed stay calm, focused and on point at all times.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Mary Hutchison, SRES, ABR some days agents forget to keep their courteous hat on, don't they! Be a professional at all times and work in the best interest of who your reprenting.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Paul S. Henderson, REALTOR®, CRS you are a true professional that speaks the truth.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Debb Janes EcoBroker and Bernie Stea JD honestly I was a bit surprised that the agent actually thought it was a serious offer.....really! Thanks!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Donna Watson, GRI welcome to ActiveRain!  I hear the Austin market is on fire and that means you must be dealing with multiple offers ++.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Michael Jacobs personally I make sure buyers are qualified up front, and that means really qualified!  In a somewhat sellers market I don't think sellers will take their home off the market while 2 different sets of buyers get their homes ready to sell, then get them sold so they can buy the new one together. What if they change their minds?  In this case the whole situation wasn't a win for the sellers by a long shot.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Rose Mary Justice agreed! Serious buyers would have their homes already sold and not 'think' they can 'play' with the sellers for months on end.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Laura Cerrano well said my friend!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Richard Bazinet /MBA, CRS, ABR agreed stay calm, cool and collected! Interesting thought - predatory buyers. That sums it up.  Hey we need to create a meetup one of these days.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Derrick Guevremont yes we have our share of new and inexperienced agents here as well. But we were all new at one point!

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Buzz Mackintosh I learned this my very first year in the biz. Sometimes countering low balls is simpy not worth it.  Way back then (late 80's) the buyers did pony up a reasonable offer and we got the home closed for the sellers - all thanks to my brokers mentoring on how to deal with this type of offer.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Maria Gilda Racelis it is always so nice to have cross sales with great agents! In this case the offer that was successful the agents were very professional.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Lorrie Semler, REALTOR® in the Dallas area. Call/text 972-416-3417 what a great idea. Please send me a copy of that form. That would be very helpful.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Sam Shueh well if it had been my buyers and not my listing I would have prepared the buyers well in advance before they even began looking for a new home. That's why they hire us.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Jill Sackler agreed.  Go over all the different scenarios that could play out for the sellers and then let them decide.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

All offers must be delivered, yet only those with reasonable offers should be analyzed and reviewed. So, why would an intelligent, experienced buyer's agent deliver an unreasonably low priced offer? The only possible conclusion is the buyer's agent lacks the intelligence and experience or is there another possible reason? 

Posted by Kimo Jarrett, Pro Lifestyle Solutions (WikiWiki Realty) 5 months ago

I was taught that our duty was to present all offers. It is up to the seller as to whether they bother to counter, reject, or accept them.

Posted by Carolyn Roland-Historic Homes For Sale In Delaware and S. Chester County PA, Carolyn Roland, GRI, CRS (Patterson-Schwartz Real Estate) 5 months ago

Hey Anna,
Guess I missed this in all the activities of the month.  Sellers do get offended and emotional about low-ball offers. To a professional agent, it's just business and you either try to work with it or move on.  

Posted by Carol Williams, Retired Agent / Broker / Property Manager (Although I'm retired, I love sharing my knowledge and learning from other real estate industry professionals.) 5 months ago

Good morning Anna Banana Kruchten CRB, CRS 602-380-4886 - glad you also had reasonable sellers who did not react emotionally.  That got them to the closing table.

Posted by Grant Schneider, Your Coach Helping You Create Successful Outcomes (Performance Development Strategies) 5 months ago

Kimo Jarrett agreed. The agent reminded me that he was in the top 1% of producers in his area. Top 1% agents know this kind of non-offer will fly.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Carolyn Roland-Historic Homes For Sale In Delaware and S. Chester County PA t is indeed the sellers decision, always up to them what they want to do. It's my position to guide them and give them my exeperienced thoughts as to what works and what may or may not fly.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Hi Carol Williams what? Are you talking about the week you crammed 3 weeks of stuff into LOL!! These sellers did not get offended, very savy sellers. 

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Grant Schneider indeed, very smart and experienced sellers to work with - they did everything they needed to do to make it all happen.

Posted by Anna Banana Kruchten CRB, CRS 602-380-4886, Arizona's Top Banana! (Phoenix Property Shoppe) 5 months ago

Stay calm 

Posted by Ricardo Mello, Manhattan & Miami Real Estate Agent (Manhattan Miami Real Estate) 5 months ago

Your story is one that has often been seen, low ball offers.

You gave a great piece of advise when you stated: Stay calm.

Then, keep the communication open. I advise sellers to respond to all offers.

There are so many buyers who still believe they can "steal" a property at prices of 5 years ago. But they often quickly come into reality and buy at a more appropriate price.

Good post.

Posted by John Wiley, Lee County, FL, ECO Broker, GRI, SRES,GREEN,PSA (Right Move Real Estate Group- EXP Realty) 4 months ago

Anna Banana Kruchten CRB, CRS 602-380-4886 Thanks for sharing this post. When I get that "double whammy" I tell the sellers we have good news and bad news. Which would you like first? The good news...we have an offer.

Posted by Margaret Rome, Baltimore Maryland, Sell Your Home With Margaret Rome ( HomeRome Realty 410-530-2400) 4 months ago

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