Low Ball Offers: Effective or Counter-Productive?

From the perspective of a realtor... we saw this coming. For those who listened, they truly reaped the rewards! Here in Pinellas County (the waterfront county of Tampa Bay that includes the beaches), in 2007 just as the market started to head downward there were a total of 18,504 property listings. Buying at such an unprecedented rate was slowing down. Seller began to realize that no offer could be ignored, even if it was 25% or more off the asking price!

Today, however, at the end of March there were 6,985 listings throughout the entire county... I checked today and that number is down to 6,935. If you combine a rebounding market with a severe depletion of inventory, we very quickly move away from a buyer's market. Those buyers need to understand that a more realistic buyer gets the home. There is nothing wrong with a low ball offer and everyone wants to get the best deal possible. However, we are finding buyers who make that stand losing out on the property. Multiple offers are becoming a norm.

"In a survey last year conducted by the National Association of Realtors® (NAR), one in 10 respondents cited low-ball offers as a concern. According to real estate columnist Kenneth Harney, a NAR survey conducted in March and not yet released found that almost no one complained about low offers. When the number of listings outpaced the number of buyers, many potential homeowners submitted a shockingly low offer on the theory that they had nothing to lose. If the seller balked, most would still counter with something below their asking price. Today, however, offers close to the asking price – or even beating it – will probably come in fairly quickly from someone else if a home is priced correctly in the first place."

The misconception is easy to understand, particularly for out of state and international buyers (which Florida has plenty of). The media is filled with news about Florida's foreclosures and short sales. The point is that this news is old. Markets are local and diverse and when you have one rebounding it is easy to miscalculate the time for a low ball offer. You never want to blame someone for trying to get the best deal possible. My concern is the buyer who says "I don't pay retail" or "I am patient and can wait for the right deal" "I am paying cash!" Even the sellers who don't get offended by a low ball offer are more frequently countering at only a little off their asking price. In this Tampa Bay market of 2012, if a property is correctly priced... it may well be counter-productive to low ball. Not only that but 63% of the local sales are all cash so that once admirable playing card doesn't have quite the punch as it once did.

Keep up with the real estate market and The PURTEE Team. Email is at info@floridagulfproperty.com to receive monthly updates and local market statistics.