This is an issue that should trouble many real estate professionals….
- Some months ago, I met with clients and wrote an offer (at buyer’s request) that was substantially below the listed price (599,000 list price:475,000 offer). It was a rare Carlsbad, CA beach condo property with no recent comparable sales.
In prior markets, I might have urged clients to target their offer into an acceptable range to avoid the risk of an insulted seller who might refuse to even counter the bid. This time, I held my tongue.Most real estate markets are undergoing a major shift, and appraisals from months ago may no longer be valid; yet, they may be the only comparables available. Where once our San Diego sellers were entertaining multiple bids for their properties, we are now seeing buyers who make multiple offers and accept the property that comes closest to what they are seeking. This has happened with three of our listings the past twelve months.
Since that time, I have considered the potential liability for agents who “encourage” higher offers from their buyers. In our litigious society, what might be the legal consequences for a knowledgeable real estate professional who advised or pressured a higher offer–and whose clients a year later have a home worth less than what they paid? I am not referring to agents who foolishly promise a gain on a real estate buyer’s purchase, but well-intentioned agents who work hard to negotiate the best transaction for their clients–a task that usually involves the crafting of an offer that will be acceptable to all parties.
This is a challenging market for all, and one that troubles a number of concerned Realtors.
Yes, in a different market, sellers may not have responded to a low offer. We counsel all our sellers when we accept a new client to tell them to expect a low offer. It is what we do with it and where it ends up that really matters. I love a lowballer these days. Often they are just testing and we end up with a meeting of the minds.
Maureen: You can’t blame real estate buyers for testing the waters. This is the market they have been awaiting for years!