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Jennie, Home Buyer in Los Angeles, CA

how to response counter offer when there is a relative big gap between our offerring and asking price.?

Asked by Jennie, Los Angeles, CA Tue Mar 30, 2010

the situation is, we offer a property, but below seller's asking price. seller counter back with a still high asking price, say about 50,000 difference between us. do you think how much is most possible to get this property? if we only want to add about 10000, is there a chance for us to get it? if so, how should I counter back? if there is another offer, but in same price range as ours, is there any way to get that offer's infomation before I counter back? should I contact owner directly? thanks

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Grant Linscott’s answer
Hi Jennie,

If the home is worth $10,000 more to you and this is as far as you are comfortably willing to go you may want to write "best and final" and have your agent provide justification for your price. Leanne is right, you chose your agent and they should have the best solution for you with your interests in mind. I wouldn't recommend contacting the owner directly. Good luck to you!

Best Regards,

Grant Linscott
Keller Williams Realty
323.333.6222 cell
grantlinscottproperty@gmail.com
1 vote Thank Flag Link Tue Mar 30, 2010
Everyone has basically answered your question. Firstly, you should not contact the seller. All negotiations are handled between the agents. Secondly, you should ask your agent to give you the pricing on comparable sold properties in the area over the last few months. That will give you an idea if the pricing is correct. If it is, you run the risk of losing the house by not coming closer to the seller's price. If it isn't then, as Scott says, you should offer accordingly and show what you are basing your price on. Also, you should know if it is a multiple counter offer as that box is checked on the Counter Offer itself. If it is not checked, you are the only potential buyer. If it is the listing agent is under no obligation to tell you how much the offer is. You can always offer $10K more and see if they counter you again. Good luck.
Web Reference: http://www.homejane.com
1 vote Thank Flag Link Tue Mar 30, 2010
Good evening Jennie,

I agree with totally with Grant. I'm almost certain that your agent has a good grasp on the details of your situation. For instance, what your needs and wants are; resources and purchasing power you posess; value and condition of the home you are negotiating for; etc. Your agent will have trustworthy and sound advice on the negotiation.

I would not attempt to question the owner, if I were you...

If you would like to make sure you are being advised, well, then you should ask for a meeting with your agent and the OP (top broker in your agent's office).

All the best and good luck with your deal,
Kieran
Web Reference: http://KieranTheRealtor.com
0 votes Thank Flag Link Mon Nov 21, 2011
Hi Jennie,
It's hard to say, not knowing the individuals involved in the transaction. It would be best to hire a buyer agent to assit you in putting together an offer tha might be accepted by the seller.
0 votes Thank Flag Link Sat May 28, 2011
I had someone give me a low ball offer yesterday. I know the comps in my neighborhood and my home is right on target with those comps. My neighborhood is also a desirable one for first time homebuyers due to location and great schools. I was pretty insulted by the offer. Buyer's agent just brought by a folder and didn't even go through it. I wished he had because I would have laughed out loud to his face. Not sure where they got the numbers, but I almost didn't even respond to it. Couldn't even believe the agent presented this lowball offer. I later heard this is his first deal and boy, I could tell.

I think too many buyers have "HGTVitis" where they see buyers on shows (and I love HGTV, by the way) offering low ball bids and then want closing costs on top of it and expect sellers to accept it. All home sellers are expected to be desperate and will sell their home at any price. Not true. Thankfully I am not desperate and could stay in my home another year if needed.

I countered and we will see what happens. Just disgusts me that I get lowballed, asked to cover all closing costs and then they are also getting my tax dollars through this first time homebuyer's thing. Some people really have nerve! But I have to admit I am not your average buyer or seller. I have throughly researched the comps and know its appraised value.

I am thankful that I am in the situation I am because I know many are not and are worried about short sales and foreclosures.
0 votes Thank Flag Link Tue Apr 13, 2010
Hello Jennie,
Some great answers below. Forget everything else, the question is "WHAT IS THIS PROPERTY WORTH TO YOU". If there is indeed such difference then either you are trying to low ball the seller or the seller thinks he's got 'Taj Mahal". Either way you are quite far away depending on the price you are dealing with. Is this a 200k property or a $3 mill property. In a $3mil sale $50,000 is not that significant and in a 200k sale even 10k is super significant.
I am sure you know the answer deep inside. What the heck we are havin a field day here. i am sure you have done your homework and if not then you need some serious help. Hope you have an Agent representing you and if one is then i hope you will trust the Agent to do his fiduciary duty.
Good Luck
Pebble Singha
certified Distressed Property Expert

http://www.pebblsingha.com
Web Reference: http://www.pebblesingha.com
0 votes Thank Flag Link Mon Apr 12, 2010
Hi Jennie;
I have often had my clients write "best and final" on an offer, only to have the seller write another counter offer at a higher price. Sellers tend to see t as a negotiation strategy, and not take it seriously.
The gap you talk about can only be affected by MONEY or TIME. Market value, (what a home is truly worth) is the amount that a willing buyer will buy and a willing seller will sell, without duress or pressure. At this moment in time, there is a GAP between your idea of value, and the seller's. That gap may be affected by TIME, as either you, or the seller, change your idea of the value. You may need to wait the seller out.
Decide what your idea of market value is, and do your best. Then wait. If someone else buys the property, you did your best, and couldn't agree on market value. Time to move on.
Best of luck,
Deborah Bremner, CSP, SFR, HRS, CRS
REALTOR, 00588885
Certified Short Sale Professional
Certified Home Retention Specialist
(D) 818.564.6591
TheBremnerGroup@gmail.com
Blogging at: http://TheBremnerGroup.com/blog
0 votes Thank Flag Link Mon Apr 5, 2010
Hi Jennie,

You have to ask yourself "what is the home worth to me". Your agent should know what the homes market value is so it will appraise and you can get a loan. Other then that factor you simply need to ask yourself what am I Willing to pay for it. In this market where inventory is low, I would recommend that you don't play around too much if you really want the home. If it is ok to not get it then low ball. Otherwise you may regret playing a game for what could be just a few hundred dollars a month.
0 votes Thank Flag Link Sat Apr 3, 2010
engage professional appraiser to help you out. They are the only independant fair person to assess for you.
Web Reference: http://www.centuryside.com
0 votes Thank Flag Link Sat Apr 3, 2010
I will echo the sentiments of the agents below and recommend that your agent conduct the negotiations for you UNLESS you were ORIGINALLY dealing with the owner and the owner is selling it to you FSBO (for sale by owner.) If the owner has an agent representing them then by ALL means hire an agent to represent you. If the owner is a BANK - counter, counter, and counter. Many banks will counter HARD the first 2 or 3 times before they adjust their numbers. If it is a multiple offer then the seller or sellers agent should theoretically request BEST & FINAL from ALL parties involved in writing. If it's a bank, you MAY get a phone call, but more than likely an email requesting BEST & FINAL depending on the REO broker...

But by all means have your agent check the values of comparable properties and make an educated decision based on those numbers.

You are not privy to any competing counter offers UNLESS the seller feels the need to divulge them--however if that were to take place, one might consider the source and remember that the seller wants to net as much as they can.

Best of luck.
Web Reference: http://www.REHcorp.com
0 votes Thank Flag Link Tue Mar 30, 2010
Best bet - determine the market value based on comparable sales.
If you are in a market that is still declining, you can reduce your price under the comparable sales by some.
If you are trying to come in real low for a deal, realize that not all sellers are in a position to be low balled. However, if they have equity, maybe they can (or perhaps they can take some of their equity later).
Perhaps they have underlying mortgages and they may need to pull some equity (if any) to move on. You or your agent may want to see if you can get existing loan information from a title company. How long have the sellers been carrying a mortgage? Can you closely guess at what they might still owe? Are they upside down and asking too much in order to pay off the mort. companies? If there is no room in the equity for a seller to take a low ball offer, you're probably wasting your time.
0 votes Thank Flag Link Tue Mar 30, 2010
Best advice you can receive from all the agents responding would be to: double check the true market value and work with those numbers. Remember that lenders are not willing to lend any kind of monies to a borrower who is going to pay more into a property then it's true market value today, if the property is not going to appraise, you can forget about it… Unless your coming in with all cash. So, getting the true value would help you to get the right purchase price. Over bidding sometimes does not help due to appraisal not coming in as high as the over bid. The property will not appraise if you go to high so it really does no justice to exceed unrealistic numbers. Work off the market value. I'm sure things will work out for you, Good luck and I am a phone call away...
0 votes Thank Flag Link Tue Mar 30, 2010
Youhave to discard asking prices and look at what a property is worth in todays market. your first step at this point should be to have your buyer broker complete a broker price opinion, this will show you what this property is worth in todays market. Then base your offer on that. Now if the BPO and your offer are closer than include a copy of it and a letter of why you are offering what you are. If the bpo is higher, closer to the sellers counter offer then you need to assess your offer. I would not contact the owner directly, let your agent do their job. As well your agent could check the deed to see what they owe, it might be higher than the property is worth and therefore is why you are getting such a high counter offer. good luck with your offer.
Web Reference: http://www.ScottSellsNH.com
0 votes Thank Flag Link Tue Mar 30, 2010
Listen to your agent for specific advice. That's why you chose your agent isn't it?
0 votes Thank Flag Link Tue Mar 30, 2010
Jennie, first what is the home worth, is it over priced and you believe you are offering market value? Do you believe the property will not appraise for what the seller is asking for the property? If you have your agent and seller has their agent you should not contact the seller. If there is another offer there is no way you will find out what it is unless the listing agent volunteers that information. My suggestion is if you want that house put your best foot forward offer no more or no less than you are willing to pay for it, so that when and if your offer does not get accepted you at least can say that you gave it your best shot.
0 votes Thank Flag Link Tue Mar 30, 2010
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