Responding to Lowball Real Estate Offers

Lowball Real Estate Offer

Austin Real Estate Agents disagree on the best negotiating strategy for responding to lowball Real Estate offers. There are two general camps of thought. One philosophy says that the amount of an initial offer doesn’t matter, and that the seller should always respond to any offer with a counter-offer of the lowest ‘bottom dollar’ price she is willing to accept for the property. I not only disagree with this strategy, but believe it is fails to protect the seller’s best interests.

To put it harshly, it is incompetent and negligent, in my opinion, for an agent to advise a seller to disclose her bottom line price based upon nothing more than the existence of a lowball offer. Nevertheless, I’ve heard many veteran agents claim that this is the best response to any offer – that “any offer is a good offer and deserving of a counter-offer”.

Would this ham-handed technique be representative of the “expert negotiating skills” that we as Realtors hold forth as one of the primary reasons you should hire us? I hardly think so. Of course there are exceptions to every rule, but in general, in a healthy market with a properly priced home – and the seller being under no extraordinary duress – I think responding to a lowball offer with an immediate price decrease is a very poor negotiating strategy.

Another approach, the one I follow both as a listing agent and as a seller of my own properties, has always been to respond to lowball offers with a cordial “thanks, I appreciate the offer – really I do, but we’ll have to pass on it at this time”.

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Austin-area home sales still robust

From today’s Austin Statesman, more good news for Austin sellers who have been waiting the past several years for the market to rebound.

By Kate Miller Morton
AMERICAN-STATESMAN STAFF
Thursday, August 18, 2005

Central Texas homes are selling in record numbers so far this year, and the buying boom shows no sign of waning.

Sales of existing houses have surged 18 percent in the first seven months of this year compared with the same months in 2004, according to the Austin Board of Realtors. Half of the 14,022 single-family houses sold from January through July were priced at $161,220 or above, a 3 percent increase from the same period in 2004. Monthly sales jumped 17 percent in July, compared with a year earlier, with 2,560 houses sold.

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Wall Street Journal delivers scathing attack on Real Estate commissions.

Real Estate Commissions

A recent Wall Street Journal Editorial (entire text below) takes Realtors to task for what the WSJ claims is “a price-fixing scheme” made possible by bad politics and a protectionist Realtor industry.

The article claims that commissions should be much lower than those that consumers currently pay in the US. Are consumers trapped in a locked pricing scheme as the WSJ suggests? Well, last time I checked, Discount Brokers are an ever-growing segment of the real estate services industry, and real estate consumers have more choices than ever with regard to the level of service and fee structures available when buying and selling real estate.

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Always Have Your New Builder Home Inspected, Always!

Building new homes in Austin, TX

This morning I met with the Buyer’s inspector and Builder’s rep at a new home being purchased by one of my out of state buyers. I strongly believe that it’s always a good idea to have your new builder home inspected before closing, and I would never let one of my buyers make the mistake of simply trusting the new home builder to deliver a properly built home.

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