Practice Management

Money sometimes brings out the worst in people.  Even pretend money like some Realtor's perceived idea of what a property is worth can bring out the worst in both home sellers and Realtors.

Do yo watch those real estate shows on HGTV, Fine Living, TLC, Discvoery Home and the like?  The common result (if not the theme) of almost all of the shows on these channels is that Realtors have allowed their clients or customers to so greatly overpriced their homes that they have run off all potential buyers.

That is the reason that I found amusing the discussion on Bankrate.Com about what constitutes a low ball offer.

You have Realtors on both sides of the divide trying to figure out how not to, and why not to, outrage the seller of a property.  For example, Karen Monsour, a Realtor with Exit Realty Properties in Coral Springs, Fla., says any offer that is 25% less than the asking price falls into the lowball category.  She encourages buyers to offer at least 85% of the asking price because anything lower than that is "an insult to the seller."

Man, I am not sure I would want this person representing me in a real estate deal.

Pricing real estate is such a subjective thing, despite what everybody says about comparable properties.   The house down the street might have sold for X, but it had a pool, or it was staged nicely, or the people that lived there were not pigs that thrived in a pile of clutter like the present sellers.

I think Miriam Bernstein, an associate broker with RE/MAX Prime Properties in Scarsdale, N.Y., is right when she suggests that just about any offer could be labeled as "lowball" if it provokes the seller to outrage or anger.  Rather than discourage lowball offers, she believes buyers "should be able to put in whatever offer they want and provoke a discussion." After that, it's up to the broker to present the low offer in a manner that's friendly and non-confrontational.

I am not about to tip toe around some seller and pay them much more than what I think the property is worth just because they are in love their investment.  I do not care if they did the crappy tile job in the kitchen themselves.  Would you believe a stockbroker, when you asked to offered $10 a share for Microsoft stock, if he told you that he could not present that bid because it might hurt Bill Gates' feelings?  Somebody might not be willing to sell their Microsoft shares for that amount, but they would place the bid.

I had this experience in the last year.  We were looking to downsize the world wide home office because our kids had mainly moved out.  We sold our larger house.  The first house on which we bid the Realtor refused to take our "lowball offer" to the sellers because we insisted on paying only 94% of the asking price of the home.  She said it was an insult because the homeowner had just voluntarily reduced the price by $10,000.00 after only 6 days on the market against her advice.  I felt it strange that she would not even accept the offer and present it to her client or customer despite the fact that we were pre-approved for the loan and could close immediately.  (The homeowner was no longer living in the house).  So, we just moved on to a different house.  As it turned out, the homeowner ended up selling the home many months later for the exact same price that we had offered.  Apparently, the person making that offer was clean shaven and had taken a bath or something, but the Realtor did not find it offensive to take that offer to the homeowner.  Possibly she had some bills due and needed the commission.

Apart from allowing me to vent a little, the point is that you as a home office attorney cannot afford to overpay for a home despite what a Realtor or homeowner thinks.  Like it or not, houses for sale are a dime a dozen these days it appears.  Even when they are in short supply, it does not last.  Now is a good time to buy, but you have to buy it right.  After all, this will likely be your largest investment, and for you to make a good investment, you do not need to pay a price for a house just because somebody has some arbitrary value already in their mind, which your offer might offend.