Why Your $430,000 Offer on My $575,000 Listing Hurts You More Than it Hurts Us

J Philip Faranda March 25, 2010

Dear Buyer and Buyer Agent: 

My clients and I are in receipt of your lowb-, um, offer. We are grateful that you are interested in the home- it has served my clients well for years. I can only hope that if you live there too that it will be the source of much joy and many happy years for you and your family should we do business. There is just one thing, however, that we’ll need to rectify in order to do business with you, and that would be the amount you are willing to pay to live in this property. You see, offering fewer than 75c on the dollar for the place hurts you more than it hurts us. Here’s why. 

  • You probably don’t want to live in a community that has had its prices knocked back to the year 2000. But if you got the place for $430,000, that is the trend you’ll unwittingly start. The sale will be in the recent market history and adversely affect the prices of the other units, because future buyers will want to pay 430 and not 600. Places will take longer to sell for less, and your “good deal” or “steal” will start a domino effect in the complex. That effects you, not me. I won’t be living there. You will. 
  • If, God forbid, you have to sell in the next 2-5 years, you are going to want the same $600,000 everyone else is asking for (and getting) now. But you won’t, because the 430k purchase will be public record and everyone will know it. They’ll also know you didn’t put $170,000 into the place because it was built in 2000. Real estate isn’t appreciating at 45%, so you’ll have no justification whatsoever for such a disparate price in such a short time.
  • If you don’t believe me, ask anyone in a small community how much just one foreclosure has decimated years of appreciation for everyone else. And you don’t want to live in a stagnant complex do you? Of course you don’t. You want your home to appreciate and grow in value! Right? You want all the “steals” to end with your purchase. But that’s not the way it works. Capeesh? 
  • Now, this certainly doesn’t apply to us, because my clients are interested in doing business and are very non-judgmental. But you know, there are some people out there that just might conclude, however erroneously, that an offer like this means that you aren’t really serious about doing business, getting a nice home for your family at a fair price, and that you are actually a speculative, self interested rectal cavity. And we know that’s not true about nice folks like you. 

If you’ll permit me, I’d like to give you some unsolicited advice that might serve you well. Explaining your low offer by knocking the crap out of a 7-year old unit isn’t a winning strategy. You see, we know you are going to live here should we do business. And you wouldn’t live in an outdated, run down, inferior unit that backs up to a swamp, because you have too much self respect for that. 

We are countering your offer at $575,000. Here’s a thought: Go back and sit down together and resubmit your offer, sans insults and knocks on my clients’ home, and produce a number that will benefit both you and us. You won’t get a steal. If you want a steal I know a nice shelled out gut job on the other side of town you can get with the window bars pre-installed. We wish you nothing but the best. 

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