As I, Scott Roh, author this for a group of posts, I should note that I have had a real estate license for over 20 years. It's important knowing that the low-ball offer I describe below would in fact receive a $1,000,000 counter-offer. I will not likely see it happen at any time in my next 20 years. Other examples and similarities though will definitely happen, as people are people.
We had just put a new home listing up for sale, and had 11 appointments lined up for the Sellers. They chose to get away with their children and left town for the showings and a Saturday open house. They would be returning on Sunday to consider any offers that possibly came in.
The market at that time was observing multiple offers by first and second-time home buyers, and some buyers had even started giving up because on their own principals they did not want to compete with other buyers. Homes were on the market for less than 90 days, and homes that had offers within the first week were selling for more than asking prices. On average, all home sales were coming in above 97% of eventual asking prices.
The home had received varying feedback during the first days' showings. Feedback ranged from no further interest, to 'maybe coming back for a 2nd look.' Showing feedback for showings that that took place in the morning before the open house were not yet reported. I had been prepped by a (newer) agent that had shown the home on Friday that the parents, along with the Buyer, may be coming back during the open house. Sure enough, the parents came back for a second look, but without their son. I recognized their names when I greeted them.
The open house
They were within the first group of visitors and I greeted them with a sign-in sheet and light conversation. They seemed pleased to be back. 20 years of experience though had prepared me to be sharp/aware of all things people might say, so my ears were open. Things were soon to develop, with multiple visitors within the home. I knew to 'stick and move' like a bartender at TGI Friday's between customers; Seeing if help or drinks can be served, but giving enough distance to let the experience happen for the guests. It did not take long though that the parents, purposely with loud voices while others were taking in the home, became critical of what they were seeing. My first thought to myself standing about 15 feet away was, "Wow, the agent said the home rose to a level of possibly coming back, and these are your first words about it?"
Comments by them included how the updated box cabinets did not match exactly with the prior fascia of the older cabinets. True, but this was essentially a new kitchen in a 50 year old home. Then they said the sink wasn't in the right place; and "it should have been closer to the refrigerator," but that would have meant moving the window. Then there was the preference for a different flooring, away from the new laminated plank. I was thinking, "are these really the Matt and Gwen (not their real names) that I had been told about?" They did say they had already been in the home during introductions, but WOW, just 'wow.' They exited the home after 20+ minutes and I wondered why they came back for a 2nd visit.
I could not think about it long though, as the open house was well attended. Other visitors were far more positive about the home. When the open house finished though, we still had two more private appointments.
Surprisingly, but not, these parents encouraged their son to immediately write an offer for the home that afternoon. The home had been open for showings less than 48 hours and I was surprised after seeing their actions during the open house. But now I realized what they were doing while talking so loud in the open house. When the offer came in, the agent working with this buyer said that the Buyer (and parents) had missed out on two other homes, having written too low on those two prior. Sure enough, their offer came in that night, low. WAY LOW. It was the equivalent of having an asking price of $180k and the offer was for $150k. Unheard of for a newly listed property. It was the first offer in and I dreaded the update to the Sellers, still out of town.
By Saturday evening 10+ private showings had taken place, including a couple of them scheduled for after the open house. We were told that there might be other written interest, but no additional written action was known. I was not looking forward to the update for the sellers when they got back into town on Sunday. The offered low price was essentially less than what the Seller had paid years earlier.
Justice in the real estate world
Fortunately, late Saturday we received word that there were other attendees of the open house that wanted to come back. A husband and wife from a nearby community wanted to come back with their agent. They wanted a viewing at 11am on Sunday. It was perfect, as the Sellers would not be home until 3pm. The first offer was not going to come together. It was too far apart. I knew the Seller's goals, and the Buyers obviously did not know the market, even after two prior failed attempts. It would be seen by the sellers as an insulting offer, not measured by currency alone, but of appreciation for what 'home' represents.
Sure enough, the married couple with the second showing loved the home after their private viewing. Immediately after their 11am viewing they wrote an offer for 3k more than the home's asking price, and I was relieved for the Sellers (and myself). The first "offer" and Buyer (no doubt influenced by the parents) was not just rude to the Seller, but it could wrongly reflect poorly on my own skill set. The Seller's confidence in me could have caused lasting issues if the second offer had not come in when it did.
On Monday we responded by happily accepting the 2nd offer. It was far cleaner in it's contingencies (not to mention price). We then decided the first Buyer (with parents) could use a little more help in their hunt of the next home that would likely 'deserve' a better offer than what they'd now done 3 times (3 low-ball offers). We countered the low-ball offer to be in back-up position, at a price of $1,000,000. A one million dollar counter offer. A deserved value and it was empowering for the Sellers to sign that counter. Hours later the agent with the Buyer and parents asked me "What are you doing? Where is your professionalism in doing this?" The agent was new in real estate and didn't get it. It might turn into that agent's longest lasting career lesson, and truly a $1 million lesson.
After all the effort the Sellers had put into improving the home that had seen their children born, they felt empowered and appreciative that I would stick up for them in such a way. It was a recognition of their own feelings and care for the home over the years they had worked on improving it.
The home sold to the 2nd Buyers with small repairs done as a result of the home inspection, and one of the repairs was not even the home, but to the ice-maker in the fridge.
The truth is, even without the second offer, home Sellers should not have to see such low offers. Nor should such be worked with. A million dollar counter could have been the best approach even without the second offer in. There may be times for low offers, but not 48 hours into the market we were seeing. Every situation can be different, but as a seller get your data and don't take a low offer seriously. There will always be that kind of Buyer, or family member controlling the same.