by Sean Hess (Sean@StAugTeam.com), Broker and Manager for St. Augustine Team Realty (www.StAugustineTeamRealty.com). Join us on Facebook and me on Google+.
The Property Brothers. Image from HGTV.com.
The downside to having DirectTV is that instead of relaxing when I get home, I end up watching real estate shows instead (like I don’t have my mind full enough of work already). The latest show I’ve been watching is Property Brothers on HGTV.
One of the brothers is a contractor, the other is a real estate agent. While one brother tries to find a new dream home for the people on the show, the other brother tries to upgrade their current home so that it becomes their dream home.
Or maybe that’s Love It or List It. I get my HGTV shows mixed up all the time…
Anyway, I was watching Property Brothers the other day and the couple featured on the show were set on buying a new dream home, and the husband was set on lowballing the offer.
“I want a STEAL,” said the twenty-something buyer with bad hair, “I want to offer $270,000!”
The real estate agent brother, looking like he’d rather suck an egg than relay the offer, said something like, “Well, a better offer would be $300,000.”
Cut to the next scene and the buyer with bad hair is chewing his nails, looking anxious. The phone rings. It’s the real estate agent.
“They rejected your offer,” the agent said, “they didn’t even counter offer.”
And I laughed and laughed and laughed as the buyer with bad hair had to give the news to his angry wife, who really wanted the house.
As a real estate agent I don’t get to laugh when my own customers make bad offers. Instead I have to get the alka-seltzer or, in some cases, ambien.
Bad Hair eventually did get the house, for $310,000, and probably $10,000 of that was a premium for insulting the seller in the first place.
The point is this. If you’ve seen enough houses you know what the one you want is worth.
The trouble is, instead of offering what the home is worth, too many buyers get fixated on “how low they can get it.” Which is a good business move, say, if you’re buying spark plugs for your auto repair shop. But it’s a lousy move if you are looking for a place to shelter your family and you’ve already looked at dozens of homes, and you’ve only found one that really, really fits your needs.
One might argue that if you’ve really only found one home that fits the bill, you might actually offer over market price to make sure you get it.
So when can you offer way less than the seller is asking?
When you find five homes so similar that any one of the five would fit the bill.
Sure, you might have a first choice, but your second choice (or third or fourth, etc.) would work just as well for you. If you offer low in this case, one of the five houses will surely deal.
Now what happens if the list price is really out of whack with market price?
For example, maybe the home is really worth $270,000, and you offer $270.000. The trouble is the seller is asking $340,000, and he counters at $310,000. Maybe in this case you’d be willing to go up to $280,000, but if the seller won’t deal…
…let he or she keep the house. When you’re ready to move again in five years it may still be on the market!
Hire St. Augustine Team Realty when you are looking to buy or sell in St. Augustine! But if you make a lowball offer you may become part of this blog. Email us at ReQuestion@StAugTeam.com or call Broker Sean Hess at (904) 386-8327.