A "bottom-fisher" in the residential real estate world refers to a buyer who targets properties that have been on the market for a significant amount of time, looking for a seller who is starting to panic. You won't see them when homes are moving briskly or when a home first hits the MLS. They know their offers will be rejected immediately. They'll show up when the market starts to slow down and homes have had time to "marinate" with days on market. The longer the better from their perspective.
We have over 20 listings on the MLS in our main area of concentration (Fairview, Lucas, and Parker), so we can sometimes watch the bottom-fishers as they move from home to home with their low-ball offers. Our agents share that information, so we know right away when we're dealing with one.
It's a numbers game to bottom-fishers. They know 99% of their low offers will be rejected out of hand; it's the 1% they're looking for, a seller who is starting to get desperate. It's the listing agent's responsibility to protect their clients and help them make informed decisions about their next move.
In my opinion, here's is the best way to identify and address bottom feeders.
- Evaluate the Offer on Its Merits: First of all, don't immediately dismiss what seems like a "low-ball offer" without giving it its due consideration. The offering price might be right in line with where the market is and/or where the listing agent recommended listing in the first place, but the seller chose to go unrealistically higher. It's up to the agent to run the current sale comparables and determine if it really is out of line on the low side. If the listing agent can't justify the offer by any means, they can ask the buyer's agent to share the comparables they used to price the home. That should weed out the bottom-fishers pretty quickly because they're just throwing out low numbers without thought. However, if the buyer agent then asks the listing agent to share the comps they used to price the home, it's going to be a problem if the listing agent can't provide comparables that support their price. It rings hollow when all the listing agent can say is "That's just what the seller wants" without it being supported.
- Compare Days On Market: Does the property's days on market align with other similar properties of size, amenities, school districts, and location? We have the days on market information at our fingertips.
- Evaluate the Offering Instrument: Was the offer made on a promulgated real estate form and filled out correctly and completely? Does it appear thrown together with mistakes throughout? If it's a simple letter of intent on a non-promulgated form, it's not worth the paper it's written on. The buyer is probably throwing these letters out to multiple properties just changing the addresses. That's fast and easy.
- Research the Buyer: Engage with the agent (or buyer if they are unrepresented) to try to determine if they're legitimate. Ensure the buyer is qualified with a valid pre-approval letter. Did they submit something to verify their ability to purchase the property. It doesn't hurt to Google the buyer either. That can tell you a lot about the buyer.
- Does the Buyer Stay in Touch After the Offer is Submitted?: A lack of follow-up by the buyer or their agent agent often indicates a less than serious attempt to purchase the home. If they want the home, they'll be all over the listing agent for feedback on their offer.
- Verify Property Visits: This is probably the biggest "tell". If the buyer has not physically toured the home, chance are they're just throwing out low offers on multiple homes with no real interest in any of them. They aren't going to waste their time touring properties knowing their low offer will be rejected anyway. Of course, exceptions can be made when the buyer is from out of town, but it's up to the listing agent to get some clarification on why the buyer hasn't been in the home.
If the agent's "spidey senses" indicate trouble after their research into the buyer and the offer, they should advise their sellers of their concerns. Then it's up to them whether to engage further with the buyer or respectfully decline the offer without a counter. If they decide not to counter, that usually reveals the true intentions of the buyer. If the buyer disappears, the handwriting is on the wall, they were never serious about buying the property at a reasonable price. In that case, the seller has lost nothing in the way of time and wasted energy, and more importantly, their home remains on the market for a more reasonable buyer.
By the way, if the buyers come back with a more attractive offer after their initial low-ball, it might be more than a fishing expedition and there might be an opportunity to bring the buyer and seller together. Already this year, our listing agents have closed on homes that started out hundreds of thousands of dollars apart. The sellers decided to work the transaction anyway after the buyer came up with their offer.
