Same ole BS different day. The bottom line is unless you carry the paper when the house closes you get your money.
Why Do Buyers Think Cash Offer on House Justifies Low Ball?
- Thread starter LoneRanger
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Originally Posted by KrisZ
Write a counteroffer, say no to prepaid taxes and let them walk if they don't like it.
Don't get mad about it.
What I would get mad about if your agent insisting on you going to their office. These things can be handled over the phone until some sort of agreement is reached with the buyers.
Yeah this.
They can have pre-financing and still make a "cash offer". That is what I'd expect, unless you want to offer owner financing or other weird arrangements.
Your realtor is lazy. Might as well tell him how it's gonna be, you're stuck together for the length of your contract.
Write a counteroffer, say no to prepaid taxes and let them walk if they don't like it.
Don't get mad about it.
What I would get mad about if your agent insisting on you going to their office. These things can be handled over the phone until some sort of agreement is reached with the buyers.
Yeah this.
They can have pre-financing and still make a "cash offer". That is what I'd expect, unless you want to offer owner financing or other weird arrangements.
Your realtor is lazy. Might as well tell him how it's gonna be, you're stuck together for the length of your contract.
They are making an offer as a starting point for the negotiations. "Cash offer" is something they have included as part of it, the only benefit of it being an easier and quicker close process.
If you don't want to get into the negotiations, no one is forcing you. I would have started similarly in their shoes.
If you don't want to get into the negotiations, no one is forcing you. I would have started similarly in their shoes.
Unless houses simply aren't selling in your area, I'd stick to what you want.
Originally Posted by totegoat
Its too early in the listing for discounts. Counter at more than asking.
Good way to kill the offer. Countering at asking does the same thing. Cash offers are only really good when there's other offers. Otherwise they tend to lowball. Highest offers are usually FHA offers, they don't have any money so they feel fine paying way more than they have. Cash offers are at the other end of the extreme. The ones with 10-20% are usually the decent ones.
Its too early in the listing for discounts. Counter at more than asking.
Good way to kill the offer. Countering at asking does the same thing. Cash offers are only really good when there's other offers. Otherwise they tend to lowball. Highest offers are usually FHA offers, they don't have any money so they feel fine paying way more than they have. Cash offers are at the other end of the extreme. The ones with 10-20% are usually the decent ones.
There are cash offers and there are cash offers...if this was a bidding war at asking price with two other offers that were 115% financed then that's one kind, but demanding low ballers who want property taxes, an allowance for appliances and whatever they can think up and still keep it below 10% of asking price aren't worth the mental anguish. Some real estate agents will blur that distinction as much as feasible.
I went with Redfin when I sold a townhouse at the end of last year and it was a cash sale that reflected the time of year, what I had put into it, and the softening of the market in my area in that it took 42 days to sell when 6 months earlier it would have gone to a flipper in 14 days for probably a little more. I saved about $9500 in commission but had to gauge/guess ( if I wanted to wait until this Spring ) if I'd lose that amount with reduced pricing. IMO, if prices are stable in your area, the house is paid for, there's no hurry and these are the kind of offers you're getting, then wait a couple months ( until the contract with this realtor expires ) and maybe go with someone you feel you'll have more faith in or possibly a low commission broker to juice your proceeds. Real Estate is an industry that's ripe for "disruption" and suffering some of this garbage is unfortunately part of the game.
I went with Redfin when I sold a townhouse at the end of last year and it was a cash sale that reflected the time of year, what I had put into it, and the softening of the market in my area in that it took 42 days to sell when 6 months earlier it would have gone to a flipper in 14 days for probably a little more. I saved about $9500 in commission but had to gauge/guess ( if I wanted to wait until this Spring ) if I'd lose that amount with reduced pricing. IMO, if prices are stable in your area, the house is paid for, there's no hurry and these are the kind of offers you're getting, then wait a couple months ( until the contract with this realtor expires ) and maybe go with someone you feel you'll have more faith in or possibly a low commission broker to juice your proceeds. Real Estate is an industry that's ripe for "disruption" and suffering some of this garbage is unfortunately part of the game.
Originally Posted by Vuflanovsky
Real Estate is an industry that's ripe for "disruption" and suffering some of this garbage is unfortunately part of the game.
They've been saying that for years. But computers aren't people and it's still people involved in the transaction.
Real Estate is an industry that's ripe for "disruption" and suffering some of this garbage is unfortunately part of the game.
They've been saying that for years. But computers aren't people and it's still people involved in the transaction.
Originally Posted by LoneRanger
My agent is with a large multi state agency, doing both sides of the deal is legal here but this buyer is represented by another realtor although not sure if within same agency since it's large and they compete with each other within that agency. My realtor is 15 yrs in the business, and #1 producer among realtors in this region not utilizing an assistant or a team (he rolls his own, he flies solo, he's a one man band...). He did an extensive market analysis and found good comps for comparison pricing before presenting me with the asking price he recommended we list it at, which I agreed to without contesting it. And potential buyers have been filling out online/mobile feedback forms after showings and all but one have checked the opinion box on asking price as "at market price", so other potential buyers apparently felt the listed price my realtor formulated is fair. Which is why I think the "cash buyer' low balling is kind of offensive. The home is in move-in condition, clean as a pin in and out, and received new wood flooring update 2015 including complete tear-out of carpeted stairway and rebuild as full wood by a master carpenter and a journeyman carpenter assisting. Custom stained and finished to match the wood flooring. I know. you don't get your money out of flooring updates, but still. The house pops inside. It's not old, built 2005, but w/ quality materials (Pella windows, Rheem dual zone hvac, extra tall crawl space height (4 or 5 block), all drywall and ceiling work is perfect, not a wave or hiccup. Neutral paint in exception cond throughout. The low ball can't be a case of Flipping 'cause there's nothing needing flipped. Only thing lacks is granite counter tops. I will admit that. But that don't qualify this sort of low ball in this market.
Comps are just one educated guess of what the market value is. The market decides the true market value.
What other potential buyers think that didn't make an offer doesn't mean much, they might have thought it was fair, but for whatever reason didn't make an offer. I don't really put much faith in those as I fill those out all the time too, sometimes I can barely remember the house so it takes one second to click on a button and just say it's fair. I think you might say it's overpriced if it's grossly so. There's usually many other factors involved in whether someone likes a house or not and price is usually only one part of it. And if I do like it, I'm not really going to say what I really think of the price, that would give away my negotiating position!
It's just a business transaction, don't get offended.
My agent is with a large multi state agency, doing both sides of the deal is legal here but this buyer is represented by another realtor although not sure if within same agency since it's large and they compete with each other within that agency. My realtor is 15 yrs in the business, and #1 producer among realtors in this region not utilizing an assistant or a team (he rolls his own, he flies solo, he's a one man band...). He did an extensive market analysis and found good comps for comparison pricing before presenting me with the asking price he recommended we list it at, which I agreed to without contesting it. And potential buyers have been filling out online/mobile feedback forms after showings and all but one have checked the opinion box on asking price as "at market price", so other potential buyers apparently felt the listed price my realtor formulated is fair. Which is why I think the "cash buyer' low balling is kind of offensive. The home is in move-in condition, clean as a pin in and out, and received new wood flooring update 2015 including complete tear-out of carpeted stairway and rebuild as full wood by a master carpenter and a journeyman carpenter assisting. Custom stained and finished to match the wood flooring. I know. you don't get your money out of flooring updates, but still. The house pops inside. It's not old, built 2005, but w/ quality materials (Pella windows, Rheem dual zone hvac, extra tall crawl space height (4 or 5 block), all drywall and ceiling work is perfect, not a wave or hiccup. Neutral paint in exception cond throughout. The low ball can't be a case of Flipping 'cause there's nothing needing flipped. Only thing lacks is granite counter tops. I will admit that. But that don't qualify this sort of low ball in this market.
Comps are just one educated guess of what the market value is. The market decides the true market value.
What other potential buyers think that didn't make an offer doesn't mean much, they might have thought it was fair, but for whatever reason didn't make an offer. I don't really put much faith in those as I fill those out all the time too, sometimes I can barely remember the house so it takes one second to click on a button and just say it's fair. I think you might say it's overpriced if it's grossly so. There's usually many other factors involved in whether someone likes a house or not and price is usually only one part of it. And if I do like it, I'm not really going to say what I really think of the price, that would give away my negotiating position!
It's just a business transaction, don't get offended.
Originally Posted by KrisZ
Write a counteroffer, say no to prepaid taxes and let them walk if they don't like it.
Don't get mad about it.
What I would get mad about if your agent insisting on you going to their office. These things can be handled over the phone until some sort of agreement is reached with the buyers.
Spot on.
Write a counteroffer, say no to prepaid taxes and let them walk if they don't like it.
Don't get mad about it.
What I would get mad about if your agent insisting on you going to their office. These things can be handled over the phone until some sort of agreement is reached with the buyers.
Spot on.
I have bought and sold several houses over the years. As a seller you want the most money you can get and as a buyer you want the lowest price you can get. Everyone should, and if it makes you mad when you get a low offer your emotions are getting the best of you. It is a business transaction. No one is obligated to accept any offer. That's where negotiation comes in.
Having bought and sold a couple houses I find Real Estate agents to be worse than car sales(persons).
An agent on my sick moms house in Fl made 18K in one week. the house was priced to sell quickly ( est less tan 2 months) due to medical and financila circumstances but iIlater Find out she had buyers for these condos on a waiting list and we were too far below market given the trajectory.(and yes I researched comparables)
One of the most overpaid and under worked professions on the planet. They work for themselves ONLY - no you I find.
An agent on my sick moms house in Fl made 18K in one week. the house was priced to sell quickly ( est less tan 2 months) due to medical and financila circumstances but iIlater Find out she had buyers for these condos on a waiting list and we were too far below market given the trajectory.(and yes I researched comparables)
One of the most overpaid and under worked professions on the planet. They work for themselves ONLY - no you I find.
Originally Posted by meadows
Cash offer means easy closing and fewer sales cost for the seller.
Originally Posted by UncleDave
Because it offers a faster close than through a finance company in the majority of the cases.
This ^^^^^^^^^^
With cash you know the guy can close immediately. Nothing is contingent on him selling anything. Or obtaining financing he may or may not get. Remember, obtaining a home mortgage is never a sure thing. Even with perfect credit.
"In fact, the top mortgage lender in the United States, Wells Fargo, denied 84,687 of the 399,911 home purchase applications it received (21.2% rejection rate), including those that were pre-approved, according to a Marketwatch analysis."
https://www.thetruthaboutmortgage.com/why-mortgages-are-declined/
And coming in at 10% under asking price is more than reasonable for a starting offer. Certainly nothing to get insulted about. I would counter 5% higher in an attempt to meet in the middle. If he takes it, you've got a nice clean done deal. Which is more than how a lot of real estate deals go down. If they go down at all.
Cash offer means easy closing and fewer sales cost for the seller.
Originally Posted by UncleDave
Because it offers a faster close than through a finance company in the majority of the cases.
This ^^^^^^^^^^
With cash you know the guy can close immediately. Nothing is contingent on him selling anything. Or obtaining financing he may or may not get. Remember, obtaining a home mortgage is never a sure thing. Even with perfect credit.
"In fact, the top mortgage lender in the United States, Wells Fargo, denied 84,687 of the 399,911 home purchase applications it received (21.2% rejection rate), including those that were pre-approved, according to a Marketwatch analysis."
https://www.thetruthaboutmortgage.com/why-mortgages-are-declined/
And coming in at 10% under asking price is more than reasonable for a starting offer. Certainly nothing to get insulted about. I would counter 5% higher in an attempt to meet in the middle. If he takes it, you've got a nice clean done deal. Which is more than how a lot of real estate deals go down. If they go down at all.
Stop getting mad, it's counter-productive. Step back into the buyers shoes first. Why shouldn't he start low, at 90%? It's a great way to possibly get the home for maybe 93-95%asking price. All you can do is say no. And he can always come back with a higher offer. Secondly, how do you know exactly what your home is worth. Could it be over-priced?
If I were you I would counter, but only at the level you are satisfied with. Don't take it so personally.
If I were you I would counter, but only at the level you are satisfied with. Don't take it so personally.
Ultimately, a reasonable offer for a nice "turnkey" property is at the intersection of local pricing and what the seller is looking to get out of it. If someone offers 10% under asking in California then that's very different than 10% under offers in Cleveland or Detroit. If I was offered 10% under asking in my market that would be both an insult and laughable because it would approach six figures.. If it was a 85K house in the heartland that might be a lot different.
Personally, I don't think "a bird in the hand" has anything to do with the OP's perspective if it's a first offer from clown people in a desirable area with stable pricing.
Personally, I don't think "a bird in the hand" has anything to do with the OP's perspective if it's a first offer from clown people in a desirable area with stable pricing.
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Good luck with the sale. It can get crazy.
It seems to me your agent is the one you should be angry with.
Doesn't he/she know your bottom line?
I think it is OK to tell you you have an offer, but preface it with the truth. It's low...
If you are in a seller's market, and you are not over priced, you should have nothing to be worried about.
Again, good luck.
I will be selling a house in Sunnyvale, Ca in the coming months.
Sunnyvale is the heart of Silicon Valley... Gonna be wild!
It seems to me your agent is the one you should be angry with.
Doesn't he/she know your bottom line?
I think it is OK to tell you you have an offer, but preface it with the truth. It's low...
If you are in a seller's market, and you are not over priced, you should have nothing to be worried about.
Again, good luck.
I will be selling a house in Sunnyvale, Ca in the coming months.
Sunnyvale is the heart of Silicon Valley... Gonna be wild!
I know what you're going through. I had to sell two houses (primary residences) recently: April/May 2016 and then again May 2017. Both were moves for jobs. In the first one I had a "cash" offer for $115k when the house was listed at $129k. But we had two offers at the same time, and got the other people to go from their $121k to $129,900. The other people were flippers.
The second house we got screwed because the agents were both ours and the buyer's and they clearly had the buyer's interests first (went golfing with them, etc.). But we HAD to sell fast to move for a job, and we had missed the spring buying window in a 26k person town in the middle of nowhere South Dakota. We couldn't put the house up on the market until I got the job offer - if I was offered that job three or four weeks earlier we'd have done much better as a similar house but not as nice sold for $5k more.
Cash offers cause less problems for both buyers and sellers with keeping closing on time. But they aren't worth taking tens of thousands of dollars less money vs. what is actual market value. Especially if you don't have to sell and can wait it out a couple months.
The second house we got screwed because the agents were both ours and the buyer's and they clearly had the buyer's interests first (went golfing with them, etc.). But we HAD to sell fast to move for a job, and we had missed the spring buying window in a 26k person town in the middle of nowhere South Dakota. We couldn't put the house up on the market until I got the job offer - if I was offered that job three or four weeks earlier we'd have done much better as a similar house but not as nice sold for $5k more.
Cash offers cause less problems for both buyers and sellers with keeping closing on time. But they aren't worth taking tens of thousands of dollars less money vs. what is actual market value. Especially if you don't have to sell and can wait it out a couple months.
Originally Posted by Leo99
10% isn't low balling.
I'd expect a significant discount if I had cash in hand.
What differences does it make that the seller doesn't have a mortgage?
In a horrible market or special circumstance where the sellers needs to close in ASAP cash might bring a big discount. Not so much in active markets.
10% isn't low balling.
I'd expect a significant discount if I had cash in hand.
What differences does it make that the seller doesn't have a mortgage?
In a horrible market or special circumstance where the sellers needs to close in ASAP cash might bring a big discount. Not so much in active markets.
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