Last year, 10 percent of REALTORS® complained about receiving low-ball offers on listed homes — offers usually submitted by the buyer for 25 percent or more below the list price, according to a National Association of REALTORS® survey of its members. But that number has dropped drastically.
According to a survey this March of 4,500 agents and brokers, no REALTORS® complained about low-ball offers. The main problem nowadays: The sudden drop in inventory of for-sale homes has led to fewer homes available to sell.
A low-ball offer typically involves a contract submitted to a seller where the price proposed by the purchaser is 25% or more below list. Low-ball offers increase sharply when there’s a glut of properties available, asking prices are out of sync with local economic realities and values are depressed or uncertain.
For home buyers who still think they have a chance of hitting it lucky with a low-ball offer, they’re finding in many markets that their offers are more often being rejected or countered closer to the original asking price. It’s not different in our housing market here in South Lake Tahoe, CA. Lately I’ve been observing that this sort of strategy is not a winning move in many communities this spring. In fact, in our local market where inventory is getting tight and competition for homes are rising, buyers looking to steal houses by low-balling their offers are ending up at the back of the line — their contracts either rejected out of hand or countered close to the original asking price. Another reason low-ball offers are down might be because we’re seeing more homes come on the market that are more realistically priced.
If you are a home buyer it is very important to understand the housing market where you are planning to purchase property. Talk to a local real estate agent and get informed so you can have a better chance of not missing any good opportunities. Here in South Lake Tahoe you will find many great deals, but if you are planning on writing low ball offers you might need to change your strategy. Most homes for sale that are popping up on the market this spring are priced aggressively, especially REO’s and short sales. At this moment in our area, if a house is priced right it is selling fast and in many cases over asking price due to multiple-offers.
Here’s a graphic that shows how low the current inventory in South Lake Tahoe is compared with the past two years. This is causing some competition in our market.