Ask the Realtor - Consider low ball offers as a starting point

Jim E. Flynn
"Experience
& Integrity"

Ask The Realtor

As printed in the OC Register / Saddleback Valley News

Written by Jim E. Flynn, Century 21 Beachside Realtors, Lake Mission Viejo

Aug. 26, 2008

Consider Low Ball Offers as a Starting Point

Q. "We have friends trying to sell their home and we keep hearing that they are offended by getting both "low ball" and contingency offers. What advice do you have for me to tell them? - Karen from Mission Viejo

A. "Low ball" or "fishing offers" are substantially less than asking price offers and certainly can be offending. A good Realtor experienced in successful negotiation knows that low ball/fishing offers can result in a sale for their client.

Unless the property is substantially overpriced, rather than be offended and simply reject the property a professional discussion with the offering Realtor might produce a counter offer and start serious negotiations.

Having a viable offer on the table can also help your Realtor with any other offers that may be presented. Any offer can be presented. A pre-offer discussion with your Realtor should have already taken place long before the low ball/fishing offer arrives.

Then, when they do arrive, as expected in this market, the feelings of being offended are diluted and an attitude of positive negotiating is far less frustrating. Just remember that everyone wants a bargain but some want to steal if allowed.

So consider that if they took the time to meet with the agent, and review and sign the offer, then the offer did come from prospective buyers. Your agent is being paid to negotiate on your behalf and the experience he or she has should have already been discussed up-front. If it hasn't, it needs to be ironed out just as soon as you receive the frustrating offer.

Do we need to consider contingencies?

Those special issues buyers have before they can buy your property. That is another discussion that should have already been covered with the listing Realtor.

Selling your property at the highest price with the least amount of problems in the quickest time is the goal. So even in a down market where you do want to sell as quickly as possible it may be worth while to at least review the special contingency.

For example, if the offer includes selling the prospective buyer's home first, your Realtor should explore the possibilities of a counter offer. That counter offer might include a First Right of Refusal. That's a clause that allows you as a seller to keep your property on the market and gives the prospective buyer the option to step-up to the plate and give you a more attractive offer because your agent has received another offer for you that is more attractive than the First Right offer.

So that you do not lose the second buyer's offer there should be a time restriction of the contingency buyer of 48 or 72 hours to submit the revised offer.

Your Realtor's exploration should include a complete review of the history of the contingency property, past, present and probable future.

So Karen, whether it is low ball/fishing or contingency an offer is a starting place and often can be finished with a sale when handled by a licensed professional Realtor/broker.

Jim Flynn is a Realtor with Century 21 Beachside Real Estate in Mission Viejo. He has more than 30 years of home sales experience and belongs to the county, state and national associations of Realtors.

Original article in The Register

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Jim E. Flynn
CalBRE license #: 01215480

Phone: (949) 463-0739