Presenting an offer can become personal when the offer is far below the asking price. The best advice I ever heard from an old agent is to think of the offer as a “wish”. Spending time with realistic buyers is a big part of making your living, but all good agents think through the best way to present an offer without creating an emotional reaction from the seller. It can be easy to miss the potential for damaged relationships, when working with offers for a living.
“Presenting all offers and counteroffers in a timely manner, unless a party has previously directed the licensee otherwise in writing;” Source: A portion of the Transaction Broker Notice, Florida Statutes 475.278
What is a “low ball offer”? 10% under asking price probably isn’t lowball, but 20 or 30%? It all depends on the market segment and price range. If you see the chart, higher price ranges tend to see a greater drop during negotiation. The days on market is usually higher as well. I like to pull average sales prices and look at average sales price as a percentage of original list to final selling. This can soften the blow to an owner, but can also help a buyer with a “lowball everything” mindset.
- Is there any chance of reaching agreement?
- Do all parties have data on the market?
- Research on the individual property to determine if it is a potential exception?
- Condition of property and alternatives?
Knowing the trend in negotiation can help bring reality to an offer for agents, buyers and sellers. Assuming each property is different can help. As a broker, I know each property is different, but I also have a good idea when there is no possibility. The numbers you see below are sometimes skewed by new construction selling at more than list price or by distress “outliers” or statistically unhelpful sales.
The ratios now are higher than they were a few years ago and the number of distressed properties is far lower than it was in 2007 to 2011. Knowing the type of property, having a feel for how the property is priced when listed, saves time for me and makes a big difference to a client.