Getting Agent to Make Low Offers (when prices are going down anyway)

Well, what you are asking is difficult.  You are basically asking how to get a "weary" agent to make lowball offers for you.  It's tough to change the mind set of an agent. 

It doesn't annoy me, for the simple fact that if I can get you the best deal possible, you will be happy with my service, and word will get out.  I LOVE to negotiate, it's kind of a game.   But when you ask a shy person to negotiate, it causes some unrest, and that's when they hesitate. 

I don't know that she's shy at all.  I just mentioned $300,000 to her yesterday on the phone (in regards to a $346,000 home) and I could hear the phone shift and her chair squeak. I just want to know what's usually done in real estate. I don't want to drive her away~

IMHO, If she gets driven away by you asking her to put in offers for you (at a price you can afford)... she sucks as an agent and you should find another one...

these people are making tens of thousands off dollars off the purchase you are going to make... make um earn it.

Assuming you are in a state with buyer's agency and the agent is working for you (as contrasted with states that still operate under sub-agency where all agents work for the seller), an agent's job is to follow the direction of their client. Your agent should have no hesitation about helping you write and submit the offer you want.  If they believe you are an unmotivated, unrealistic buyer, they never should have agreed to be hired by you to begin with.  If they discover this after being hired, they should resign the position and you should be free to hire another representative instead.  The agent's duty is to serve the clients interest above the interests of all other parties, even their own.  If the agent is reluctant to do that - get one who understands their job.

HeartandHome, she is the wrong agent for you.  Don't waste her precious time and gas to show you around and write the offer.  You both will just get frustrated.  In Riverside CA you either wait or lowball.  As far as I know most agents show properties priced higher than their buyers budget.  When we had agents trying to get our business, I usually ask her/him, what's the deepest lowball offer they had ever seen and submitted.  If they acted like they never heard the term or 5% less than asking is the worst they ever did, we'd tell them we don't want to waste their time. 

HeartandHome, Your offers do not appear to be out of line in the least.

Gerry G. has given you very good advice.

Good luck...Happy home buying

If I understand you its a bank owned home, & the banks has no emotional attachment to the property, so your not going to offend anyone, if you don't ask you don't get. I would have no problem making that offer, If where individually owned, & it was not over priced I would advise you that the offer could offend the seller & they may not even counter, but as your agent I would write & present the offer for you regardless. 

If your limit is $300k, then why is she showing you homes that she doesn't believe you can purchase for that price? Have you been completely up-front with her about your financial constraints? If not, I think you need to sit down and clarify your needs and desires, so she can focus on showing you properties that have better potential for falling within your price range.

It depends....

Lets say, for example, you want to offer $300K on a $346K house and your agent has run a market analysis that says $340K is a fair offer.

What rationale does your agent give the listing agent/seller for offering 87.6% of the asking price when the analysis shows sales are at 98.2%?  What is your rationale for the price?  Just because?  What trend has your agent shown you in sales?  Is it graphed for presentation to the seller?

If your offer doesn't work are you going to blame your agent for not getting you the house for $300K?

I'd also like a little better definition of working in a client's best interests.

Writing multiple lowball offers serves who?  How?  It's akin to taking an overpriced listing, which serves who, how?  Might as well be playing air guitar.

My definition is understanding and working within the constraints of the market and fully explaining that to your client so that their best interests are served.

Buyers come to agents for guidance, and as a result of that consultation buyers give informed direction to their agents.  At the end of the day the buyer makes the decision about how much to offer.  It's my job to set expections regarding offer outcomes.  If a buyer client listens to reason and then makes offers time and again outside of reason then I have obviously failed to do my job.

"Lets say, for example, you want to offer $300K on a $346K house and your agent has run a market analysis that says $340K is a fair offer.

What rationale does your agent give the listing agent/seller for offering 87.6% of the asking price when the analysis shows sales are at 98.2%? What is your rationale for the price? Just because? What trend has your agent shown you in sales? Is it graphed for presentation to the seller?"

I think the problem with this analysis is that the OP believes (and I tend to agree) that by this fall, prices will have experienced additional declines and therefore recent sales are not necessarily a good measure of the true value of the property.  This raises the general question of whether agents would prefer that buyers make lowball offers today based on a reasonable assumption that this cycle hasn't hit bottom yet or would they prefer that buyers not even actively look at properties until prices have decreased to a more reasonable level.  I'm going with the second option and although I check in on these discussions periodically, I don't plan on actively looking for properties to purchase until next spring.

Dan, I believe the market was irrational on the way up, and I think most will agree, therefore why cant the market be irrational on the way down???  LOWBALL is the key. Here in Riverside, prices have fallen over 20% YOY...... and no end in sight.  Your job is not to give expectations of anything, your job is to sell houses, so save your expectations to yourself.....

Daniel... isn't a house really worth what somebody is willing to pay for it? Maybe the seller is motiviated (a.k.a they realize that house prices are still in a downward spiral and they want to get out while they still can?) If somebody is putting in a lowball offer, they probably already have an expectation that it might get rejected... but why balk at putting it in unless you are trying to milk them for a higher sale price and a higher commision.

"This raises the general question of whether agents would prefer that buyers make lowball offers today based on a reasonable assumption that this cycle hasn't hit bottom yet or would they prefer that buyers not even actively look at properties until prices have decreased to a more reasonable level."

I really am in the same position as the OP. I met with my agent a few weeks ago and we basically came to the same conclusion that" interested observer " makes.

I presented to him what I can afford, and that I didnt want to offer asking but price in future declines to an asking price today., but  Banks are not cooperating as far as I can tell yet, if comps justify  their asking they generally will not accept a low ball offer. If we get the spring upswing in sales,  banks will be even less likley to take low offers.

While we agreed on the strong possibility of future price decilnes, banks arent there yet, and individual sellers definatly arent there especially if they are under water, which they likley are.

Its kind of a stalemate. I am waiting until prices drop to $300,000 for a decent Single family home. If they do not drop, then I'll have to save more money for a down.

I have to agree with Dan.   There is nothing wrong with waiting to see where the market goes.   By the time banks list properties, they have had at least 2 BPOs completed and usually want the "I want this house sold in a month" price (at least in high foreclosure areas).  If the REO property has been sitting over a month, most likely it is priced too high or it is completely trashed.

Get a new agent..

Indeed - there are many who don't mind practicing writing offers.

Corona,

When I say "set expectations", what I mean is that Mr. Buyer, if you write a $300K offer on a $346K house, you can expect the offer to be rejected.  If you, Mr. Buyer, write an offer at $340K, you can expect the offer will be accepted or there may be a small counter.

As far as expectatations on where the market is going, not my job, and it really isn't a buyer's job either.  If you are looking to buy now you know where the market has been.  If you are looking to buy later you shouldn't be looking now.  When the market reaches your comfort level get out there and make an offer. 

Neverborne,  if you are going to lowball you should allow your agent to gather the intel needed to support it.  For example, Seller A is priced at $300K, slightly over comps, just came on the market, expectations are probably set for the full offer by either the seller himself or his agent...not a good candidate.  Seller B is priced at $280K, at market, and has been on market for 120 days, house is occupied....maybe a candidate.  Seller C is priced at $270K, been on market for 150 days, vacant, and when I pulled in the driveway to preview it the seller was picking up mail, looked exasperated, just moved into his new house and had to get rid of it (his words)....likely a candidate.  If you are randomly making lowball offers your agent isn't doing his job or you aren't getting the bigger picture.

In t

In terms of commission, you are being silly.

Just closed with a client who wrote an offer on a condo at price x ...  the seller was obstinant with a counter so we moved on.  We found another condo, same amenities, $60K less than the first one.  I saved him $60K and, if I determine your assertioin to be valid, "screwed" myself out of a commission.  Just silly, man.

Dan, Im sure when someone makes a lowball offer, chances are it wont go through, we all know that, hence the term LOWBALL offer, but there is still a possibility that the seller will accept or counter. Starting low is the best way to go, because if you start high, your stuck, this is the buyers section right???  That lame arguement that you might lose the deal to someone else is a scare tactic that wont work anymore.  Multiple offers.... puh lease.......... People want a deal right now,  and the only way to get it is to lowball the sellers.  What do you have to lose, if your a buyer. 

"As far as expectatations on where the market is going, not my job, and it really isn't a buyer's job either."            WTH, a buyer needs to be informed on where his market is going, learn about the neighborhood wether it has a bright future or not, or if theres more foreclosures coming, your statement was ignoramus, really!

Im sorry to say, I feel sorry for any buyers you represent.

We all know now, Dan, your not willing to make lowball offers, and your one of the agents trying to keep this housing market from free falling, and the expense of ignorant buyers.

"That lame argument that you might lose the deal to someone else is a scare tactic that wont work anymore."

I'm getting that from my agent right now, because I want to take a few days to review my financing options before making an offer on the first house I've seen with good potential. He's worried that I'll lose it. I shrugged and told him that if that happens I'll move on.

Hmmm...I wonder if he'll post about me on the pet peeve thread.

Ginger, theres so many houses to choose from, how in the world can a agent tell you something like that, seems like some agents are still up to their same old tricks. If its your first house that you looked at, you need to look at others regardless of your financing, the more houses you look at, the better feel you will get about wether that first house you looked at was worth the price or not.....

Corona, my agent is not totally out in left field. I've been looking on and off for almost two years within a very small area (about a 1/2-mile square), and I'm very familiar with the neighborhood. It's been holding up pretty well, which is part of the reason I want to purchase there. It has outstanding schools, excellent amenities, walking distance to shopping, and it's less than a mile from a major diversified employment center. While houses are sitting longer than usual, there isn't a lot from which to choose. Really prime properties on walking paths are still going fast (sometimes in as little as a week!); however, I'm pretty sure waiting until Monday to make an offer on this particular house is a safe bet.

Corona, how many offers have you written lately? 

Corona,

In terms of saying a seller might reject the counter, that isn't a scare tactic...it's common sense.

It's well established that you don't trust Realtors.  You're going to have to bite down really hard when the time comes to buy, but then again, there's an agent out there for you too.

;-)

Dan, do you see a "agent" tag on my profile?? NO

Im a homeowner already, so keep your implications to yourself.

Your right about the fact that theres an agent for me too, it would be the sellers agent.

Lowball offers can waste both you and your agents time if your not informed and realistic. What do you have to loose? How about credibility and a relationship with a agent, that you may find valuable.

Evreybody is crapping on agents on this board. How about some prespective. During the boom, my agent helped my find 2 great properties and sell one of them. I remember walking into his office and being handed a check for $120k. I supspect many of you here had the same experience during the boom.

Now that the tide has turned you want to bash and insult them, and ridicule their advice.

My agent helped me a great deal, and I wouldnt insult him by asking him to make a ridiculous offer. I know he is there to make money, but he has aslo proved himself trustworthy in the past 10 years. He knows what I am looking for and in what price range, and when the right propertey comes along, I'll get that call.

Benny, please dont generalize everyone on this board into one group with the same mindset. Thanks Also, Im happy for you that you have a great agent, but, an agent works for who??? The buyer right, therefore, if the find a lowball offer to be rediculous, they can always resign. Get with the program.