Evaluating Real Estate Offers: Is it a Lowball Deal?

Real Estate offers

Your house has been listed on the market. You listed your house yourself instead of going with a realtor. You did your homework though. Each realtor you interviewed gave you a CMA. A CMA is a comparative market analysis. That means the realtor researched houses in the past six months that was similar to your house and found the price the houses sold for. In this market it is not uncommon for realtors to give you a comparative of what houses are LISTED for. Ask the realtor which they have done on your market analysis. If you want reasonable offers list your house for a reasonable price. As a general rule of thumb it needs to be around what the houses have sold for in your area. I suggest listing the house for at least 5%-15% more than what the other houses sold for because people always lowball and you will have room to work with them. If you owe money on your house this might cause a problem. You have to get what is owed out of your house or talk to the bank about a short sale.

Now that your house is listed you have offers coming in. The first offer you get comes to you only a couple of weeks after listing the house. If you get an offer that quick chances are good your house will sell and it will sell for close to what you are asking. Quick offers that aren’t far fetched mean you have listed your house at an appropriate price and it will sell if you hold out. Remember all offers are negotiable. You have to play their games if you want to get out of your house.

 

An offer for 35% less than what you are asking, you pay closing costs for the buyer and you fix all kinds of things in your home is given to you. What should you do? If you overpriced your house you may be able to get away with taking the offer. Should you take the offer though? The answer is no. This is a lowball offer from someone trying to see what they can get or from someone who can’t really afford your house but likes it. Either way you need to look out for yourself as well. If you want to entertain this offer you may want to counter offer. The best thing to do is find out their situation. Do they have to have you pay for their closing costs? How much can they really afford? A counter offer to this just to start out would be full price and you pay closing costs up to a certain amount. They say no and don’t want to continue negotiations. As I said, this is actually a good thing for you because they probably couldn’t afford your house anyway.

 

Lucky for you other offers come in. You will be able to easily evaluate offers if you list your house. A serious offer is usually full price to 10% less than what you are asking. A lowball and not serious offer is anyone looking for the house to be fixed or improved to their standards and/or 20% less money than what you are asking. Fixed houses and improvements in this market are unrealistic. Most houses are foreclosures with everything missing or beat up so don’t agree to fix anything unless it is a full price offer and the fix won’t cost much.

 

In this market you will get all kinds of offers because it has turned into a buyer’s market. Buyers know they will be getting good deals because there are so many houses in foreclosure so they don’t have to haggle to get what they want. If you don’t have to sell your house you may want to wait a couple years for the foreclosures to go away and the economy to improve.