Contingencies attached to an "offensive" offer

[David Marks]

Hi All,

In the podcast, David and Rob have been talking quite a bit about writing "offensively" low offers, with the goal of getting a counter offer in return. Has anyone had any success stories with this recently? What percent below asking price was the offer, what contingencies did you write, and what was the outcome?

Im hoping to ask ~20% below asking, but I don't think I am comfortable forgoing an inspection. Am I shooting myself in the foot by asking for inspection? I would also need FHA financing.

Thanks!

David

[Charlie MacPherson]

I have seen many offers that were so low that the buyer really ticked off the seller - to the point where the seller said "F that guy".  No response, no counter nothing.  Just refusing to even deal with that "buyer". 

There's a difference between a reasonably low offer and one that is insulting.  Finding that line is the trick.

If the home is properly priced (as supported by the comps), -20% might be insulting, unless you accompany the offer with a legitimate reason.  That means realistic estimates of repairs and upgrades, not "I want to steal it".

As to contingencies, the more you have the weaker the offer is.  If I'm representing the seller, I'm looking for "weasel" clauses that let you tie the property up for weeks and also lets you get out with no cost to you.  I'm advising my seller against accepting that offer and keeping it on the market - unless the local market has turned and you're in a buyer's market.

Good luck!