The Lowdown on a Lowball

El Camino

I have this new listing in San Mateo, it’s a little 2 bedroom, 1 bath condo on El Camino which I put on the market on Thursday. It’s priced competitively (honest!) at $415,000. There’s two other units just like it on the market right now, a more upgraded place for $449,000 and a short sale at $405,000. I held it open at 1:00PM today, it’s first day of real exposure. At about 1:15 a young couple drive up in a new S550 Mercedes, come in spend about 5 minutes looking around with a printout on the property from some on-line source in hand and the young guy says;

“Will the seller take less?”

“How much less?” I ask.

“$300,000″ he says.

” The condo’s been on the market for less than 48 hours, we’re 15 minutes into it’s first open house, would you accept an offer $115,000 under asking if you were the seller?” says I.

“Well, that all depends on what my personal situation was” he says.

We actually, believe it or not, ended up having a good conversation but in a nutshell here’s what I told them. Nobody has a personal situation in which they give their home away to the first person who walks in the door. I’ve seen prices on properties drop $100,000 but it comes after time has elapsed via, usually, more than one price reduction. In almost 20 years I’ve never seen a seller accept an offer almost 28% under their asking price…and I hope I never do. I have heard of bank owned foreclosures in many distressed areas taking far less to get a listing off of their books but it sure isn’t happening in our area, (check out any of the posts in “How’s the market” on this blog). These are real flesh and blood people in almost all of these properties, they know the market, and they’re not real excited to be taken advantage of…and their agent’s should never let that happen anyway. You can write lowball offers until the cows come home and probably be successful…in Stockton or Antioch.

Here’s something I’ve told both buyer and seller clients for a long time. Whatever you are thinking or feeling about how to proceed towards a sale always stop and ask yourself “How would I feel if I were on the other side of this equation?” How would I respond if I were looking at the offer I want to write? How would I feel about this price if I were a buyer right now in this market? Hopefully, that little bit of perspective will go a long way.

Comments

  1. Beatrice H says:

    I’ve seen this same scenario so many times I’ve lost count! Often it’ll take these buyers months of banging their heads against the wall too until they understand how silly it is to lowball like this. Good locations=higer prices, it’s that simple

  2. Of course…and that’s the reason you want to buy in a good location in the first place. You want to preserve value as much as possible in a down market and escalate faster in an up market. Like you said, simple.

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