Property Grunt

Friday, March 13, 2009

A sign of the times: Reverse Offer

Sellers are starting to look how Gill feels.

Home Sellers Make 'Reverse Offers' to Prospective Buyers

Homeowners Pat and Steve Christoff are eager to sell.

They originally listed their tidy tri-level home with a wooded back yard in Valparaiso, Ind., for $225,000. But, after 14 months on the market, and $40,000 in price reductions, they admit it's time to try something new.

"You have to think outside the box," said Pat Christoff, who has grown weary of waiting for a buyer. She and her husband have brought in real estate agents Jeff and Grace Safrin, who are about to try something radical.

"There are certain circumstances where we will utilize what is called a reverse offer," explained Jeff Safrin.

'It's a 50-50 Shot'
Instead of waiting for an offer, the sellers pounce -- and present prospective buyers with an offer they, it's hoped, can't refuse.

"It's like a marriage proposal," explained Grace Safrin. "In a traditional marriage proposal, the man proposes. Well, this is untraditional. The woman proposes. The seller writes a proposal to the buyers, inviting them to buy their home."

The Safrins have used this tactic six times in the past few months, making three sales as a result.

"It's a 50-50 shot," explained Jeff Safrin.

That offer usually includes a lower price, and other incentives such as appliances and closing costs.

Pat Christoff had never heard of a "reverse offer" before. "I was like, 'wait ... aren't they supposed to offer us money?'"

I have never heard of this before but according to Nightline the reverse offer came in vogue during the 80's when the last real estate crash occurred.

With the market currently imploding, I would not be surprised to actually see this occurring in New York City. I am sure there are some sellers who would shoot themselves before even entertaining the thought of a reverse offer. However we are still in free fall mode with this market. When will there be a recover? Apparently even the experts have no idea.

According Jonathan Miller inventory levels are high. If the economy continues to crash and burn, more people will need to opt out of their homes. If they can't attract buyers with their price chops, then I can see the reverse offer popping up.

However it all depends on financial health of the seller. And they are looking pretty queasy.