Nov 10 2008
Why not write an offer below asking price?
When the forward pass was first introduced in football, the naysayers predicted failure, claiming “there are 3 possible outcomes of the forward pass, and two of them are bad.” Well, we all know how that turned out. The forward pass completely revolutionized the game.
How does this apply to real estate? I apply the same logic to the question:
Why are buyers reluctant to write offers below the asking price?
Using my handy football analogy, what are the possible outcomes when you write an offer below the asking price? There are also three — your offer will be either,
- Accepted
- Counter-offered, or
- Rejected
From the buyer’s standpoint, two out of the three outcomes are good, and the likelihood that a seller will flat-out reject an offer is low, especially if the home has been on the market for a long time. (Obviously, common sense dictates here — I’m assuming for this argument that the “below list” offer is not something totally absurd like 50% of the asking price.) So you’re already WAY ahead of the forward pass — so, why don’t more folks do it?
There are also three possible reasons that I can think of:
- They don’t like the property at any cost.
- They are afraid of insulting the seller or the seller’s agent.
- Their own agent refuses to write what they consider to be “low-ball” offer.
Let’s discuss these. The first one is easy — if the property is of no interest to you, you’re not going to want it at any price. #2 is easily solved. For homes that have been on the market for an extended period, the sellers will likely be thrilled to see ANY offer, even if it is substantially less than list. If they do get upset that the offer is low, tough…they can just say no.#3 is the one that amazes me. I have heard from numerous people that their agent refused to write up a low offer (or tried very hard to talk the buyer out of it.) If that’s the case, find a new agent. If your agent isn’t willing to put in the extra work (a whole hour or so) to fill out the paperwork for an offer, find an agent who is.
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