This is always a tricky topic as everyone seems to have a differing opinion of the market and its stability. I like to think that we have stabilized and these low ball offers are tougher to come and harder to get accepted by Seller's.
I consider a low ball offer to be 25% off the asking price. Now, one must take into account that if the property is grossly overpriced, the offer may only be off by 10% in realty. When there is a glut of Seller's, as has been the case in the past few years, the prices were falling. But in the last few months, we have seen the inventory fall to less than a 4 month average. A healthy market is at about 6 months of inventory. That means that if no more new listings came on the market, it would take 6 months to sell everything. Ask local realtor's in Sarasota, and they will tell you they can't get enough listings.
If that is true, low ball offers are not even likely to be countered, much less accepted. What usually happens is a more realistic Buyer comes along and will pay what the property is worth. Or the Seller counters less than 1% of the asking price.
I have an example of someone thinking they could STEAL a property. The property was built in 2007 to the highest standards. It had all of the new updated impact windows, tile roof, gated community, etc. Under air was 3,548 square feet with a 3 car garage and an enclosed pool area. It needed about $7,000 in repairs. The bank asking price on the property was $279,000 or $78 a foot. To replace the house would have cost at least $100 a foot according to sources I spoke to in the building industry.
I took my client to the property and there were two other agents there. I told them it was a fantastic deal and I encouraged them to offer more than the asking price. They discussed it amongst themselves and offered $800 more than the asking price, or $280,000. I explained that there would be 6 offers on the house and they would not get it at that price. I suggested a price just north of $300,000.
Well, as you might have guessed, they did not get it. Now they call me and ask if they can offer more on the property.
I think people still believe that we are in a downward turn, but I would beg to differ. There are going to be a handful of deals out there, but guess what the other 5 people are doing who did not get that property? They are out there looking, too. It wasn't like just one individual had made an offer on the property, there were many.
Happy House Hunting!
