I receive offers every day that are well below the asking price, have super silly terms and super long financing contingencies. To a certain extent, I can appreciate the effort although it wears on me a bit.
Today I countered an offer that contained financing contingencies, appraisal contingencies and no deposit.
We countered that my office would hold a modest $500 deposit. The financing and appraisal contingency would be waived within 5 days, as would the inspection contingency.
The purchase offer is for $40,000 on an asking price of $57,000. The asking price is below market.
The buyers agent went nuts. How can we possibly get past an appraisal in 5 days?
Well, Goober. I hope your client would know that they can get financed for this lowball offer in advance of trying to waste my time and yours and that you would know the property is well worth the asking price, so the much lower counter shouldn't be a problem for the appraiser. Why are you afraid of loosing $500? Can't your guy qualify? Are you afraid that you mis-valued the property by over 30% the wrong way?
No? Ok. Sign.
Do you have questions about distressed assets, receivership or bankruptcy sales, auctions? Email me at rfk@gryphonusa.com and I'll try to answer it in an upcoming post.
Richard F. Kruse is the President of Columbus, Ohio based Gryphon USA, Ltd. (www.gryphonusa.com). The Gryphon Organization includes Gryphon Asset Management providing receivership and consulting services in the distressed marketplace, United Country Gryphon Realty & Auction Group (www.ucohiorealty.com & www.ucohioauctions.com) providing real estate brokerage and auction services throughout Ohio and OnlineAuctionUSA.com (www.onlineauctionusa.com) providing commercial asset liquidations from the Midwest to East Coast.
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If the $57k was already under market and your seller agreed to the $40k I'll buy it.
- James
I can't stand the lowballers who think everyone's desperate. There is something to be said about moderation on both sides. Your side already dropped the price. Pay up or move on.
Goober, <---------- I love it!!!! HA HA HA
Thesa & Maggie - We are running into a lot of people out here that are running around without any financing, any cash and not pre-approved. They are trying to buy investment properties and agents are working with them. There are other people that will try to tie up a property and either flip it before closing or try to rent it out before closing. If they can't, well ooops, the property does not appraise. Sorry. It needed to for the financing contingency that ran all the way up to closing day. There is a lot of inventory so sellers have been wanting to take a bird in the hand and work with it. My banks, at least, are getting very tired of that.
Are agents really that desperate to run clients around without a pre-app/POF? Don't they know what a dis-service they're doing to their clients? Not too mention, pissing off the sellers & listing agents.
Katie - It is the buyers that are rolling over the agents, mostly rookie agents. You have an investor that will find a green agent, promise them multiple deals, run them all over town and have them place dozens of very buyer friendly offers that have limited chance of success. This is, of course, until the new agent seasons up a bit and bails on the investor. The investor finds a new greenhorn and the now not so new agent has a rep for having scum as clients. There is no downside to the investor.
The little downside is that I have come to recognize the signatures from many of these POC investors. Even if they make the offer under multiple names, I know who a lot of them are. If I tell my cleints that the offer is from so and so, they sometimes won't even read it.
Next blog.
I too laughed outloud at the Goober comment. I hadn't heard that in a while. Good stuff!
I have a listing coming up that the investor was so aggressive and rude to the seller directly, that she has flat out said she will not sell to him.