Stealth Price Cut

What does it mean when a listing agent puts out the word ” on MLS or just verbally ” that their Seller “will consider all offers?” (sometimes qualified with “all reasonable offers”).

Here is a rough translation: 1) the Seller knows that the current asking price is too high; 2) but, for perceived negotiating leverage, they don’t want to reduce it; so . . . 3) they’re giving Buyers permission to offer less.

License to Lowball

Surprise, surprise . . . at least some prospective Buyers go ahead and offer under the asking price.

Way under.

Which is why I’m not such a big fan of the strategy.

Rather than elicit offers 30% – 40% below list price, Sellers are usually better advised to do a smaller, incremental price cut; test that in the market for a period of time; then assess and repeat as necessary.

Even better: price realistically from the get-go.

P.S.: “Heads up” to would-be lowballers: sometimes Sellers’ M.O. here is to flush out an offer — any offer — that can then be used to stir up interest from other Buyers.

See also, “Real Estate Euphemisms — New & Improved“; and “Perils of Overpricing Even (Especially) in a Rising Market.”

About the author

Ross Kaplan has 19+ years experience selling real estate all over the Twin Cities. He is also a 12-time consecutive "Super Real Estate Agent," as determined by Mpls. - St. Paul Magazine and Twin Cities Business Magazine. Prior to becoming a Realtor, Ross was an attorney (corporate law), CPA, and entrepreneur. He holds an economics degree from Stanford.

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