Buyers have been on the hunt for once-in-a-lifetime deals in recent months, but an ad hoc index from The Washington Post suggests that strategy may no longer fly.
Dubbing its approach the “low-ball index,” the Post looked at the number of properties that received low-ball offers, which are typically situations where a buyer offers a price on a listed home that is 25 percent or more less than the asking price.
In 2011, the researchers at the National Association of Realtors found that one out of 10 members surveyed had dealt with low-ball offers on their listings. But the latest survey, which was conducted in March with 4,500 respondents, found little evidence of such offers, and instead, agents’ attentions had shifted to declining inventories and multiple, fair offers on competitively-priced homes.
So what could this mean for housing? Simply, that today’s housing environment is no longer conducive to historically-low offers on prime real estate, and such an approach can now damage a buyer’s chance at landing a property.
As the Post framed it, “In fact, in local markets where inventories are tight and competition for homes rising, realty agents say that 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.”
Much of the new environment, the Post noted, is because of new seller expectations. No longer do sellers respond with shock and awe at the incredibly low offers their homes are fetching; instead, they respond with counter offers, and they aggressively negotiate a final selling price that is much closer to the asking price.
But in some markets, where shrinking inventories have made the few remaining properties on the market a treasured commodity, emboldened sellers and agents have opted to ignore low-ball offers.
Perhaps this suggests why agent confidence is trending so high; after persevering through a tough market, agents and sellers are finally assuming greater control over the direction of their properties.