Attention investors Don't be this guy.

Buying & Selling Real Estate
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Attention investors Don't be this guy.

James Wise
Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes

Just got off the phone with another Realtor who showed one of my homes. Her clients gave me an offer that was 25% of the list price.

Please folks Don't be that guy. Show some respect for others & their time.  This poor lady had to waste an afternoon driving this schmuck around.

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J ScottPro Member
Moderator
Investor · Sarasota, FL · Member since 2008 · 18k+ posts · 17k+ votes
12y

Verbally counter back at $1000 higher than his offer.  Let him get all excited and have his agent write up a formal counter at the new price.  Then tell him you changed your mind, but you'll do it for $3000 more than that.  Let him have his agent write up a new counter.  Then tell him you changed your mind again.  See how many offers you can get him to write before he gets pissed and walks away...

My record is 3...

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  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y
    Originally posted by @Jim M.:

    How do we know your house isn't overpriced?  

    7Reply
  • James Wise
    OP
    Real Estate Broker · Cleveland Dayton Cincinnati Toledo Columbus & Akron, OH · Member since 2013 · 30k+ posts · 20k+ votes
    12y

    For clarification.  The house isn't over priced. I turned down 2 offers that were triple the offer in question.

    0Reply
  • Richard C.
    Bedford, NH · Member since 2012 · 2k+ posts · 1k+ votes
    12y
    Originally posted by @Jim M.:

    How do we know your house isn't overpriced?  

     By knowing something about the market?  Certainly not by throwing crap offers at the wall and seeing what sticks.

    2Reply
  • Jim M.
    Real Estate Investor · Charlotte, NC · Member since 2011 · 252 posts · 56 votes
    12y

    Oh and actually went back and realized I was reading it as 25% OFF the list price.  lol.  

    1Reply
  • Dean Letfus
    Specialist · Memphis, TN · Member since 2012 · 1k+ posts · 1k+ votes
    12y

    Sounds to me like the investor is doing his job. We all absolutely should be that guy :-)

    1Reply
  • Pete T.
    Real estate investor · Las Vegas · Member since 2013 · 798 posts · 171 votes
    12y

    How many people here have bought at (or attempted to) buy at 25% of market value?

    0Reply
  • Matt R.
    Sherman Oaks, CA · Member since 2013 · 3k+ posts · 2k+ votes
    12y

    For sure James. I agree with not wasting realtors time. What is the asking price? 

    0Reply
  • Darrin CareyPro Member
    Lender · Dayton, OH · Member since 2008 · 1k+ posts · 705 votes
    12y

    The list price may or may not be reflective of true market value. It's simply the asking price. No one has ever seen an house listed for too much right? So an offer that initially looks like a "lowball" may actually be very realistic.

    I had my agent look in the Dayton MLS. There are 46 residential properties that have been listed for over 2000 days. That's 5 1/2 years. The longest was 3400 days. Over 9 years. I think I can safely assume they are "overpriced". Maybe I should submit a "lowball" offer on them?

    A few weeks ago,  I looked at a property that had been listed for 399,000, then 299,000, now 99,000. Nothing on the property had changed. Two days after I looked, and didn't submit an offer, the agent called and asked if I was interested at 49,900. If I had submitted an initial offer for 50,000 would I've been lowballing them and wasting their time?

    I always submit offers at what I consider a fair price for the house in it's current condition and location. Sometimes they may look like a "lowball" offer, but it reflects the reality of the property as I see it. The seller or another buyer is welcome to have a different opinion.

    All that said, an offer for 25 cents on the dollar for a well priced property is annoying, and an invitation for a little entertainment (time permitting)

    2Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    12y

    Just a side bar....

    I see posts on BP where people get bent out of shape with low offers, or whatever. Don't take in their negative energy. Don't get wrapped up in their mess. Just move on. While J Scott's answer is quite amusing, I can't see myself spending energy playing games with my realtor and verbal offers... even if she was totally on board. Don't get me wrong, I like J Scott's answer;)

    Regarding "How many people here have bought at (or attempted to) buy at 25% of market value?" the short answer is obviously noone. You buy at 100% of market value when you buy. You may buy at 25% of the ASKING price (or list price), but that isn't the market. If you close, you are the market.

    I have bought property at the courthouse steps that was 25% of the county assessed value, but in reality the amount I paid was at the 'prevailing market for the parcel sold' based on the terms and conditions of the sale.

    6Reply
  • Andy Collins
    SFR Investor · Dallas, TX · Member since 2011 · 604 posts · 243 votes
    12y

    I got an e-mail the other day of a company that will provide software so that you could submit 200 offers in 5 minutes (I went back and found the e-mail to be exact).

    In the wrong hands something like that could shut down the real estate industry with offers,,,,,,

    1Reply
  • Amy A.
    Portland, ME · Member since 2012 · 616 posts · 550 votes
    12y

    When I get a low-ball offer, I don't take the time to write a formal counter-offer.  I simply "invite them to make a higher offer".  I've had Realtors actually be surprised that I didn't counter.  If their offer is less than my next price reduction, it's simply not worth my time.  However, never get offended and burn bridges.  

    One time I did this and got a new offer from them six months later and sold it for almost 50% more!

    1Reply
  • Pete T.
    Real estate investor · Las Vegas · Member since 2013 · 798 posts · 171 votes
    12y

    @Chris Martin - I won't get bent out of shape, explain what I meant about market value, or post one of a thousand different definitions of what it is.  I'll just say we clearly have two different opinions on what it means and that I am pretty sure you knew exactly what I stating.

    0Reply
  • Chris Martin
    Investor · Willow Spring, NC · Member since 2009 · 5k+ posts · 3k+ votes
    12y
    Originally posted by @Pete T.:

    @Chris Martin - I won't get bent out of shape, explain what I meant about market value, or post one of a thousand different definitions of what it is.  I'll just say we clearly have two different opinions on what it means and that I am pretty sure you knew exactly what I stating.

    My post was not directed at you. My point was that people shouldn't waste time on a 25% OF offer. 25% OFF the list... that's different. I honestly don't know how many low ball offers we got on the last property we sold, because I told our broker that we will not respond to offers below 70% (I actually put a price there, and it was 68%) of our list. Exactly 0 seconds of my time wasted of "that guy" types. That was my point.

    1Reply
  • Matthew Paul
    Severna Park, MD · Member since 2013 · 7k+ posts · 7k+ votes
    12y

    I make an offer based on the house , not the asking price . What I am willing to pay , if its not a great deal , whats the point . The agent may think its low , but I dont care . its the start of negotiation .  My own house was listed at $ 499,900 , I made an offer at $ 425,000 . The sellers wanted full price , i told them to hang on to the offer if they changed their mind , I didnt counter . Four months later, the agent asked if I was still interested at 425,000 .  I told them rates went up , I am a buyer now at $ 400,000.    We settled at $ 410, 000 .    Same house across street $ 550,000 .. 

    2Reply
  • NA Foster
    Real Estate Investor · CA · Member since 2009 · 174 posts · 39 votes
    12y
    Originally posted by @Account Closed:
    Originally posted by @James Wise:

    @Pat Martin @John H. Are both of you licensed yourself? Writing your own offers?

    I do not take issue with someone who's licensed shot gunning crazy offers all around town. I think it's prolly a waste of time but if you can pull in a deal every now and again more power to ya.

    I take issue with this person wasting the time of his Realtor. Treating her as tho her time is worthless. 

    People running around making multiple low ball offers on everything is a drag.  It's interesting that there are agents willing to help investor buyers do that.  

    But I think it goes both ways.  I once had some sellers call me from my marketing. The asking price was $65K, and the property was listed.  I said that was more than I would pay and that I don't usually work with listed properties.  They begged for an offer, ANY offer they said.  So I call the agent and offer $25K.  The sellers call a week later having reduced the price to $58K and are wondering if now I'll consider making an offer.  I said their agent has my offer and it was $25K.  They had no idea I had made an offer (she didn't submit it) and said they couldn't do $25K but could I come up to $30K.

    So lots going on there.  A property priced too high, motivated sellers that will to take .50 cents on the dollar, and an agent not submitting offers.  I can't know the sellers will take $30K without making the offer.  Am I wasting the agents time by making an offer her clients asked for?

    0Reply
  • NA Foster
    Real Estate Investor · CA · Member since 2009 · 174 posts · 39 votes
    12y

    Welcome home-K Marie. Always the cool level headed poster!

    0Reply
  • John H.
    Massachusetts, MA · Member since 2009 · 144 posts · 31 votes
    12y

    I'll admit I read your post wrong and mistook "of" for "off" . 25% of asking price on an MLS property is pretty bad. hah

    1Reply
  • Account Closed
    Investor · Central Valley, CA · Member since 2012 · 6k+ posts · 3k+ votes
    12y
    Originally posted by @Chris Martin:

    Just a side bar....

    I see posts on BP where people get bent out of shape with low offers, or whatever. Don't take in their negative energy. Don't get wrapped up in their mess. Just move on. While J Scott's answer is quite amusing, I can't see myself spending energy playing games with my realtor and verbal offers... even if she was totally on board. Don't get me wrong, I like J Scott's answer;)

    Regarding "How many people here have bought at (or attempted to) buy at 25% of market value?" the short answer is obviously noone. You buy at 100% of market value when you buy. You may buy at 25% of the ASKING price (or list price), but that isn't the market. If you close, you are the market.

    I have bought property at the courthouse steps that was 25% of the county assessed value, but in reality the amount I paid was at the 'prevailing market for the parcel sold' based on the terms and conditions of the sale.

    I've double closed on several properties where my buy price was 50% of my sell price. So I closed, but my buy prices didn't create the new market price.  I once double closed on a 4 house deal where my purchase was $220K and my resale was $410K.  I've been double flipped a couple of times where my buyer flipped it to another buyer.....triple closings. (Back in the day when I less worried about value and way more worried about deals closing).

    So I know I've bought at 50% of value or better. I've made plenty of offers at less than 50% of asking. I've only bought two deals off the MLS in 15 years. So just reading the numbers really over simplifies the process and the problems I had to solve on those off market deals.

    0Reply
  • Kenneth LaVoie
    Rental Property Investor · Winslow, ME · Member since 2008 · 826 posts · 281 votes
    12y

    @Pat Martin , that was my impression too. Most of the places I bought, I offered 20-40% less as well, and got most of them. Why? Because they hadn't spent any money on maintenance in 5 years, the buildings were 100 years old, needed 30-40K of work to be "legal" and they were priced as if they'd been built this year. I'm "that guy" and proud of it. However, I also send a full page analysis with my offer explaining why I need to offer what I'm offering, what I feel I need to put into each apartment to bring it up to our level, etc. This way it's not so insulting. 

    1Reply
  • Kenneth LaVoie
    Rental Property Investor · Winslow, ME · Member since 2008 · 826 posts · 281 votes
    12y

    Ah, I see, 25% OF asking price. I thought it was 25% LOWER than asking which I think is pretty common and reasonable. Yes, you have to give the a**hole award to anyone offering a quarter of listing price!

    1Reply
  • William Johnson
    Real Estate Broker · Laval, Québec · Member since 2014 · 183 posts · 59 votes
    12y

    I think a lot of people on this thread must not remember what it was like to be starting off as an investor.  At the same time I appreciate the fact that most seasoned investors and agents have that same attitude because it discourages and filters out the vast majority of investors starting out and reduces the competition I have to face for deals so...Thank You very much!!

    0Reply
  • Brandon SturgillBusiness Member
    Real Estate Broker · Columbus, OH · Member since 2013 · 3k+ posts · 1k+ votes
    12y

    @James Wise  Too funny...I had an offer yesterday that was $30k under asking...at least he had the dignity to offer verbally prior to drafting a formal offer.

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    0Reply
  • Account Closed
    Homeowner · Pittsburgh, PA · Member since 2014 · 854 posts · 511 votes
    12y
    Originally posted by @William Johnson:

    I think a lot of people on this thread must not remember what it was like to be starting off as an investor.  At the same time I appreciate the fact that most seasoned investors and agents have that same attitude because it discourages and filters out the vast majority of investors starting out and reduces the competition I have to face for deals so...Thank You very much!!

    I think a lot of people on this thread failed to comprehend the original post.  @James Wise was not complaining that the investor submitted a lowball offer.  He was annoyed that the investor used an agent to do it, and totally wasted HER time. 

    1Reply
  • Wendell De Guzman
    Investor · Chicago, IL · Member since 2013 · 2k+ posts · 1k+ votes
    12y
    Originally posted by @Sharad M.:

    @James Wise 

    The very first property I bought was listed for $70k and I offered $20k and after some back and forth, the offer was accepted at $22.5k. My initial offer was similar to what you have received. I didn't come out of a guru seminar when I made that offer. I had spent time on BP and my thought process was "I will never get a low offer accepted unless I ask for it"

    I don't know about this investor, but that might be all the money he has and he might be trying his luck submitting multiple offers to see if one sticks and who knows that the buyer's agent is the one suggesting him to make the low offer.

    You never know what the seller's motivation is. It is strictly business and we should never get upset about it or make an emotional decision. All you have to do is say no or do what @J Scott does.

     I totally agree with Sharad. I do the same thing: some of my offers are low-ball. A few of them (minority) are 35% of the list price. Most are 50% of list price. I buy 4-6 houses a month.

    To me it's all math. Does my realtor feel taken advantaged of or her time wasted? Not really. I provide her a lot of commission income every month.

    1Reply
  • Paul S.
    Investor · Valparaiso, FL · Member since 2014 · 374 posts · 76 votes
    12y

    I see quite a few posts from both sides of the coin here. How does everyone feel about making a "low ball" offer on a home that is bank owned?  If the property is owned by a bank then you are not really offending a "real person" or ?

    0Reply
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