My struggle is that we can't dictate the offer price, yet, the buyers constantly asking me on what should they offer?

Say, we look at a property priced 150K and they ask me how much they should offer? In this market, there are homes sold all over the place and there are similar properties sold for 100K through 147K. The asking price has been steadily dropped to 155 from 175K over a few months. The buyers like the place, but like everyone, want to get it for a bargain price.


My common answer is that if they want the house, and it does not need work, they should offer closer to the asking price. I tell them that it's ultimately their call, not mine. And then they start deliberating offering 120K, etc...

How do you handle similar situations?

Thanks.

Do a CMA of the house they want to offer on. Find comparable properties and present them to the buyers. Say "Here's what similar homes sold for in the past three months."

I only advise to go close to asking price if I happen to already know that the home is definitely worth it / priced right.

You need to know what is happening in the area as far as offers, as Perky said, check the comps & let them know the closed sales. In my area you either offer listing or higher, if you don't you don't have a chance. When I start to work with a new prospect and they place their first offer, it does not fail that no matter how I explain that everyone is offering listing or higher they don't understand & offer less. At first, I use to get upset but after going thru this over & over again, I laugh deep down inside & think to myself "I am the expert if they know it all why have a realtor" so when their offer is not accepted I wait until the MLS shows the CS & send it via email then their next offer they always offer more. The last time this happened I told the buyer if you are not going to offer listing or higher you might be wasting your time, then they made me sound as if I did not want to work with them & wanted to walk away, I did take the offer but guess what, they did not get the house. Listing was $229k offer $212k guess what the CS was $229k & I emailed them. These properties are low enough, they can't get any lower, at least in my area. This particular buyer called me right after the email & his comments were now making sense.

I'd love to get offers of 212,000 on a 229,000 house. LOL. I have had offers of $58,000 on homes listed at 119,000...and they were in good condition! I've had people offer 150,000 on homes listed at 264,000...craziness.

So, depend if you have deal hunters or really motivated buyers. Before I start showing houses explain how the market works. I show them how I do CMA and what I look at when I evaluate a house. People need to understand how market works. Most of them have heart that friend of some friend bought a hose with 50% discount just like that and they think that it could happen anywhere. Educate your buyers, I know it is difficult and not you only have this problem.

VK every market is different. Some areas are flat,some declining,some appreciating even in this bad economy.

Then even if you know the market trend their are POCKETS within that area that are still strong in price. The reasons vary from being close to restaurants,work,to great schools etc.

You have to counsel the buyers that if they move say 1 mile down the road they can get a property for say 15k less but there will be a reason for that.

They have to weigh area versus price and find that balance to purchase. If they have the market wrong it's your job to correct them. They either have to move out of that market to get that price,pay more than expecting,or not buy at all.

Have you ever watched property virgins?? The buyers always think their 400k budget will buy a home in an area of 600k homes. You have to make them have a wake up call. Not all will buy but you won't waste time with buyers looking to purchase a product that does not exist.

Perky nailed it. Recent sold comps should be used to make your decision. Reality and realty go hand in hand with facts and figures, statistics, etc.

I let the buyer decide on what to offer. I can tell you what can fly and what will not. Its then my job to take the impossible and make it happen.

If somebody wants to offer 1/2 price on an offer, i'll write it. I advise them that I see it getting rejected though. I've had BA tell me that my property is over priced, thats fine submit the offer, we will see if we can meet in the middle.

My buyers are experiencing a "learning curve". It takes a few offers to understand the frenzy of our market right now. Inventory has dropped, prices are stablizing but every decent house listed at market value is getting multiple offers within a day. I have always run the sold comps for my buyers but in this market they better give their best and strongest offer. I tell my recently settled buyers to expect a call from some of my current buyers- Just listen to yor Agent! She knows what she is doing!!
Doesn't help- some people have to learn the hard way by losing out on multiple listings.

Super, I love Property Virgins!

I agree with Perky. I usually try to have the comps and the estimated monthly payment with me on the tour of homes. That is why I insist that the list of homes of most interest be provided well in advance of our appointment. Then, if I know that the buyers really want a property in a hot selling area, I may be able to safely recommend offering more than list to get the home. HUD-owned homes in high demand areas here, for example, are selling thousands above list and some of those winning bids are way above the comps. So some of my buyers are waiting for them to return to the market to place our bids again. Oh well.

Whether or not I "advise" depends on whether or not I am a buyers' agent! If they want my professional opinion and guidance, they have to be my clients, not merely customers.

Sometimes it my seem that there's a fine line between giving data and giving guidance, but the agent has to be sure to be on the side of the line dictated by agency.

Run the comps to determine the value for yourself/client.
If the comps justify the list price, make a full price offer or higher. Help the people WIN the home they want.

If you feel compelled to "help them save money", it's pretty simple. Call the listing agent, and say "Hi, my buyers love this house, and I'm gonna send you an offer of $ _x__ dollars", will you help me get it closed fast?" X = your float number. Put your low ball number out in the air. Listen carefully to the listing agents reaction, because this is simply a TEST you're conducting to see how to play this particular property.

If the seller is desperate, and if your offer has a chance, the listing agent will communicate something to you (they're feeling the heat of the seller to help get it sold too). If the listing agent blows a gasket at your number... kindly ask why (don't start a fight), and "work" the agent for clues as to what seller might take OR what listing agent will go to bat with you for.

The BETTER listing agents WANT THE HOME SOLD BECAUSE THATS WHAT THE SELLER WANTS. Listing agents with too much ego will treat you rudely, because frankly, they care MORE about strutting their agent hat, than they do their own client.

I always try to hammer out a verbal something that has a chance BEFORE I actually write/type a contract. Then again, I'm more a listing agent. I will have a conversation with every buyers agent and try to get their buyer to come higher. I love talking to agents, buyers, sellers, anybody. lol.

I will let me buyers make those low offers, because sometimes they get accepted. Closing next week will be a $268k sale, on a home listed at $299k. My buyer loved the house but could only afford what she offered; the seller took it.

I don't see 268 from a 299 k as a super low offer. I am about to place an offer that is about 40,000 below list price. That's OK. I have issues swallowing it when the offer is 50% of the list price...that's a tough one to present, esp. if the home is priced correctly to begin with! LOL