We get it. All buyers want a great deal. But what happens when your offer is TOO low? One thing buyers often lose sight of is that getting a good deal in the Jacksonville real estate market has nothing to do with their offer in relation to list price. Buyers need to understand, and be focused on, what the Jacksonville real estate is worth in order to understand what constitutes a deal. This isn’t 2008. Sellers aren’t punching bags and know that there are enough buyers out there that they don’t have to give the home away. (By the way, sellers love the phrase “I’m not going to give the home away!”)
What IS a Good Deal?
We see it all of the time. Buyers that want a certain percentage off of the list price, no matter what, or they will just walk away and buy something different. But what if the home is priced at $400k, but is really worth $450k? Does the same buyer still need to get the home at their perceived “value” price which happens to be a certain percentage off of asking? Many times they think that they should. The same buyer willing to offer 95% of asking price as their top offer on an overpriced home will only be willing to do the same 95% on an underpriced home. This is what we lovingly refer to as buyers that can not get out of their own way.
How Low is Too Low?
Offers that are too low make the other side angry and buyers usually lose the house. A little too low can usually be overcome assuming a calm and reasonable agent on the other side. But there is a line. And if you go below that line things just will not go well. Now how low is too low? It’s all relative, but our average contract to list price is at 97%. That should be taken into consideration when a buyer is considering an offer. If a home is priced well at fair market value, and a buyer submits an 80% offer, that deal isn’t happening.
Your Agent Isn’t “Taking the Other Side”
If your agent tells you that your offer is too low, don’t accuse them of taking the seller’s side or “wanting” you to “overpay.” Neither is true. Your agent is trying to protect you and help you get the house you want. A good experienced agent has been down this road many, many times before and knows what is going to happen despite their best efforts. One of their jobs is to help you get out of your own way.
Many times when the offer is too low the seller overreacts and won’t even counter. Other times when the offer is too low the agent overreacts which in turn causes the seller to overreact. We have seen this play out many times over the years. This is the message we got back recently from an agent when a low offer was submitted on an overpriced house, “Received the offer and must warn you the seller will be most displeased. The last time someone offered so low she didn’t even counter. Buyers should realize that such a low offer sours the negotiations.” Do you think this deal ended up happening? Nope.
Understand and Consider Emotions for a Better Outcome
Buying and selling real estate is an emotional process. Buyer’s should expect sellers to react poorly when an offer is ridiculous. And I measure a “bad offer” off of what the fair market value of the house is using comps…not the percentage off of asking the buyer is requesting. Most importantly, take your experienced agent’s advice. You should be working with an agent you trust. Listen to them on what the home is worth. I guarantee you they know more than the automated value from some third party website you are placing so much faith in. What happens when your offer is too low? You end up wasting everybody’s time because the offer isn’t likely going anywhere.