Wednesday, December 12, 2007

low ball offers are a good thing

I was perusing my competition's blogs in the area (Southeast Florida) to catch a glimpse of additional perspective on current market conditions. I think most people equate declining home values to negative news when really, all the market is doing is correcting itself to healthy, more stable levels. Certainly, if you bought a home one year ago and you were forced to sell your home this year (only to realize the home values in your neighborhood have been declining for those 12 months passed) you would declare a depreciating market a negative thing. I think this is all perfectly healthy, if not a bit scary for some, as there is still equity for long term homeowners.



I came across a blog from another local Realtor who published a blog discouraging us (other Realtors) to bringing her (and her customers) low ball offers. You can read the blog here. Her reasoning is that 'low ballers' must 'just make up numbers' and if we do keep bringing these offers we 'bring prices down more'.



Now, this retort isn't designed to bash another Realtor, but she is wrong on many fronts. The blog she writes is written to other Realtors explaining that we need to 'stick together' in the business and we should not participate in bringing down the real estate market. Why anyone would write a blog designed for an audience of other Realtors is beyond me. It may be a marketing tool she uses to show potential customers at listing appointments, saying 'hey, I'm the type of Realtor that simply won't stand for low offers! I'm here to get you TOP dollar!' to which I would say she is doing a major DISservice to those very customers.



First, low ball offers are a good thing. If Realtors had anything to do with escalating home values (as opposed to the individuals who actually BOUGHT those properties at escalating prices, but what do I know) then they'll have a hand in the declining prices as well. Unless your customer gives you his or her absolute bottom line price, and tells you to publish that price to the world, we have no idea what our customer would or would not be willing to accept. We have no business telling others in our business where our offers should land. If you do not have the ability to negotiate a low ball offer, that should be your problem and not your customers'.



If you see a listing that seems reasonable today and you want to offer 20% below that price, MAKE THAT OFFER. Do it with a smile. The worst that home seller can say is no. As a Realtor, we have to present any and all offers in a timely manner to our customers, even if they are $1. That's right...if you tell me you want to offer $1 on a home that is listed at $400,000, the listing agent for that listing MUST present that offer to their customer, as absurd as it may be.



If you follow the Case Schiller Index of home values, you can see that we are in a declining market that looks as though it will continue to decline. By making a low offer, you could argue that you are simply trying to protect yourself as best you can in the event life happens and you are forced to sell that home a year later. It is as simple as that.



So go right ahead and make a low ball offer if you must. You will only be contributing to a market that already existed.






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