What Constitutes a Lowball Offer and Consequences

[Henry M.]

I am a real estate investor and a licensed realtor. Occasionally, I assist fellow investors in finding suitable properties.

I have two clients who are business partners who are interested in making lowball offers on various listings. They aim to have the seller cover the buyer's agent commission as part of their strategy. Their approach resembles the BRRRR method.

For example, we have a 3-bedroom, 2-bathroom home in fair condition (requiring less than $20K in cosmetic repairs) that has been on the market since August 2024. The price reductions have been minimal, and the current listing price is $300K. My clients want to submit an offer of $230K.

Btw, this is a Texas market.

As a seller’s or buyer’s agent, how would you respond to this situation?

I have an experienced opinion on the matter, but am seeking outside perception and strategies, if any.

Additionally, what are the implications of the NAR Settlement regarding this strategy if any?

[JD Martin]

Well, if the FMV of the house is at or near $300k based on reasonable comps, and there's no legitimate benefit to the client's offer (i.e. all cash, fast closing, no contingency, whatever), I'd probably quit working with them because there's really little to gain working with cheapskates and bums who just want to steal other people's property. Hell, they don't even want to pay you, so you're working for free.

Don't deal with the dregs of society. "Buyers" like that will only frustrate you and leave you working for nothing. I'm going to ask my buddy @Russell Brazil to chime in here as he's golden on situations like this.