Why not? It doesn't cost anything, they may surprise you and come up with the financing, you may not get a better offer any time soon in today's market and you're free to counter whatever you want. We're all brought up to be polite and not 'insult' anyone by offering low prices for things, but not everyone is either brought up the same way, or has learned they have nothing to lose by trying on a low bid - and sometimes the bids are accepted to the surprise of everyone, but the bidder has done himself a favor! I'm not suggesting we all start low-balling each other radically, but maybe we should be a little more aggressive sometimes in bargaining - it has nothing to do with being insulting or polite in the end - it's business, and people in the rest of the world understand that a lot better than we do sometimes.

I think it's worth countering; however you could counter by lowering your price by $1000 (or whatever amount you think is reasonable), asking for a pre-approval letter, giving them 24 hrs to respond to your counter....whatever you want. You will give them the message that you are staying firm for now.

have a house on the market for about 30 days now. It is listed with an agent and we got our first offer the other day! It was terrible!! $48K below asking and they wanted us to pay $10K in closing!!! So basically almost $60K below our asking price! The realtor representing the people making the offer told our agent that they owned 2 houses but only needed to sell 1.

You don't say how much the house is going for, so I don't know if almost $60k off of the price you are at is a low offer or not.

Where do you need to be at with price? Is $20k lower the lowest you will go or is it lower/higher then that? Figure out the lowest, then counter back a little higher then that, let them come back, then maybe you can go one more time with a number.

Are either of their houses even listed yet? The problem I would have is accepting an offer with a contingency, especially in this market. It's unreasonable for buyers to ask that you take your house off of the market while they list and try to sell their house. I would have my agent go over and comp the house to see if their price is one that will sell.

The problem with taking your house off of the market for them is what if prices go down more, then they find something during attorney review or inspection and try to get you to come down more?

I would want to know more about their house for sale, maybe even before wasting my time countering.

What type of market are you in? What is the days on market for a house?

I think you should always counter, not to be polite, but because you never know if a deal can be made.

I would advise against accepting a contingent offer. IMO, any counter would need to be non-contingent, with pre-approval from a bank or lender (not a mortgage broker pre-qual), and within 3-5% of list (assuming that you priced the house based on the market conditions).

Always counter -- even laughably low ball offers. I'm not sure what percentage of asking price the offer was so don't know if it was lowball or not, but we once countered a lowball offer with a price higher then we were originally asking and we'd pick up closing costs. The young couple was cash strapped and accepted the counter offer. The first offer is just that, a first offer. You lose nothing but a little time if you counter, try to work the offer if you can, but know your bottom limit and stick to it.

We got a low offer on our house when we sold a year ago outside Seattle. The market there was pretty good so an offer of 92% wasn't a very attractive one. We didn't counter them at first(they also had no pre-approval) but in the end we did end up selling to them for much closer to our asking price. So you never know!

I'd say counter.

Buyers these days often have really unrealistic expectations based upon all the media hubbub about housing.

We're in a solid market too, but buyers often don't realize this, and will watch the Today show and then listen to Uncle Fred about how you should be offering 80% of list price, etc.

You'll know they're serious if you counter and they stay in the game. It doesn't hurt to try, IMO.

Yes, why wouldn't you?

Having just sold and am in the process of house hunting I have played both sides of the fence. When selling our home we recieved a couple low ball offers - as one response above said - if you read the papers, watch the news, the Today show, etc. all you hear about is the housing slump and the recommendation to make an low offer. So someone did, we said no. They came back at full asking price. A counter will also let them know where you stand and what kind of position you are in.

People don't come at you with their best offer, they leave room to negotiate. So yes, I would say counter. If you don't counter offer then people won't know if you are considering thier offer, if you aren't then let them know so they can go make an offer to someone else.

roselvr,
Our home is priced just a little above mid 400's. We have no problem doing the bargaining thing; our biggest 'peeve' is no pre-approval and they haven't even listed either one of their properties yet! Our agent says to counter with a contingency to keep the house on the market. Doesn't that show on the listing that it is contingent and then people 'pass over' you listing, thinking that there is a sale in the works?

From what I understand, yes, it will show you are contingent on the sale of their home.

Reading other real estate boards, most buyers & agents say they won't even look at a house like this because they don't want to fall in love and lose it.

I was thinking about it, and with them not even being listed would tell them to come back after they've listed.

What is your agent saying to do?

My Mom had a low ball offer on the table when another buyer came into the picture. Her agent was able to honestly tell the second party that there was an offer pending, even though it probably never would have gone anywhere. The second offer came in just below asking and that deal is now going through smoothly. Having that first offer "pending" probably boosted the price of the second offer.

Amy, that actually backfired on us. We ended up losing buyer #2 during attorney review.

Definitely counter, but if you're concerned about the home sale contingency, just counter back that you are not accepting a home sale contingency. I wouldn't accept any sale contingency in this market.

Actually, at this point our agent says it looks to her like the people can only qualify for what they are offering. Just waiting to meet with our agent now.

I just wanted to say that when I was looking for a home, I made lowball offers. Maybe I spent too much time growing up in Mexico where everything is bargained, but I always do my own comps and then bid according to what I think the house is worth, which is usually less, sometimes much less, than the seller/realtor thinks it's worth.

Do I get my first lowball offers accepted? Heck no. I expect a counter offer, and if none is coming, then I know the seller won't budge on the price for whatever reason (in which case I won't buy their house because they want more than I personally think it's worth).

I have always gotten a much better deal than if I were simply offering the ubiquitous $5K off and expecting to meet in the middle.

I just wanted to tell my persepctive so the sellers can know that when lowball offers come in, it's not because buyers are trying to insult. It's a business, folks. We all want the best deal we can, both buyers and sellers.

If you don't want to counter, that's certainly your choice, your call. But it makes no sense to be insulted. Some of us just lowball cuz we play hardball :-)

Joanna

I guess I didn't sound very appreciative of their offer and that is not the case and I agree totally about bargaining to get the best price. Our concern was, not ONLY was the offer low, the no pre-approval and not having anything to do business with i.e. not having their house listed; I guess it sounds kind of like an "emotional" offer?
You know, just out looking to see what's on the market and boom; let's try to buy it?

twotogo, something just occurred to me, when I was selling some property not too long ago I got a lowball offer and my realtor said I could just counter with a verbal offer, which I did because I didn't want to have to go to all the trouble of writing up a counter offer when I wasn't sure if they could/would/should come up nearer to my price. I don't know if this will work for you, but it might be something to ask your realtor, than you can see what they come back with without you spending a bunch of time writing things up. Maybe a possiblity?

Anyway I wish you tons of luck and I hope you get as much for your house as you are hoping :-)

tradewind 64,
I just got off the phone with our realtor and she just talked to the agent representing the offer and they do not qualify for more than their offer. So there will be no counter. That took care of that! I like the idea of a verbal offer. I will ask our agent for the future, thanks :)

Thanks to all of you for your input and advice, we really appreciate this forum so much!!

I just got off the phone with our realtor and she just talked to the agent representing the offer and they do not qualify for more than their offer.

This is what seems to be going on here as well. Buyers are looking out of their price range because there is only crap & taking a chance low balling the next price range (or two).

The offers we've had, all have been qualified up to $5,000 more then they offered which didn't leave any negotiating room, meaning if we did not want to lose the deposit on our new house we had to budge pretty far.

"This is what seems to be going on here as well. Buyers are looking out of their price range because there is only crap & taking a chance low balling the next price range (or two)."

That is what is happening in our area too. Every week there is something in the paper about how terrible the local market is and how it is oversaturated with new construction, builders are getting foreclosed on....so buyers want to pay the same for our three year old house, landscaped with a fenced yard, as they could for a new smaller packed-in no-yard house that a builder is trying desperately to unload. We have had 3 lowball offers from buyers who couldn't afford our price range and so there was no negotiating.

"I like the idea of a verbal offer. "

Except in New York (and a few other places where the contract is written after the fact) verbal offers on real estate are not valid.
The statute of frauds requires real estate contracts to be in writing.

If you counter the property may appear 'tied up' and others will NOT bother making an offer.

A counter (like the original offer) remains valid until revoked, so keep that in mind.

Absolutely buyers are looking 1-2 price ranges above their targets. Wouldn't you? If one seller won't/can't accept their offer....in this market, some other seller will. Then, there's a new comp & you'll be forced to lower below the sale you rejected. That how this type of market works. You can't escape it.

With new home inventory now at 11 months (up from 10.2 months) builders will be dropping faster & steeper. Resales will have to keep pace or sit on the market forever.

This sounds harsh but, unfortunately, being a seller today is harsh. My only advice is be careful on what you consider 'low-ball' offers. That same offer might look mighty good 3 months from now when you're still not sold.

/tricia

My husband and I almost threw away what we considered a low-ball offer. My husband had lived in the house for nearly 20 years and it'd been his grandmother's house before he bought it, so he was very much emotionally attached to the place. At first, he was offended by the offer. But after much talking, we realized this may be our only offer and we better work with it.

At the time, the house had been on the market for three months and we had an accepted offer on another house with a sale contingency. We countered and ended up with a compromise. We didn't get as much money as we felt we should have according to the comps or as much as we would have liked to have, but the house closed and we moved and we're happy.

This was almost a year ago and, in our area, the housing market has gotten even worse since. I agree with Triciae...this is a tough market that demands a lot of give and take from sellers--mostly give.

I would not counter with full list price. This will only say to the buyer that you are unwilling to give. I'd come back somewhere in the middle and offer closing costs. We paid closing costs on the two houses we sold last year.

I am SO glad we're no longer on the market!

"Then, there's a new comp & you'll be forced to lower below the sale you rejected. That how this type of market works. You can't escape it."

Only if you must sell.

I know this situation is resolved, but I wanted to post what happened when dh and I received a lowball offer on our Flagstaff house in the hot seller's market. It was about 80% of list price and they wanted the sun, moon and stars. My first inclination was to flat out reject it. Our realtor suggested we counter with full asking price and no to the entire stratosphere for which they asked. They never countered back, but we got a full price offer three days later.

In this type of market, which is much different from what I posted above, I think one should always counter to show good faith in negotiating, even if it's $1K off list to send a message that 1. the offer was extremely low and 2. you're willing to negotiate when a more realistic offer is received.

I've heard of many situations where the first offer is lowball, sellers counter, then the buyer comes up quite a bit because they initially tested the waters to see how the seller is thinking.

Except in New York (and a few other places where the contract is written after the fact) verbal offers on real estate are not valid.

Even in NY, although the negotiating can be verbal, no one is bound until there is a written contract signed by both parties. A seller can accept a verbal offer and then sell to another party who signs a contract first; buyers can tell sellers "we'll do the deal for $x, send a contract" and then never sign it. Nervewracking. Best way to get around it is to put a deadline on your offer (buyer) or enforce a contract signing date (seller). We actually bought one apartment that had a contract out for three months that the buyers wouldn't sign; the issue that was holding them back was a non-issue for us, so the seller told us if we'd do a deal at the price he'd agreed upon with the first buyers, he'd sell to us. He sent a contract Friday, we had it vetted, signed and sent back with a 10% downpayment on the following Monday, and the place was ours.