Buyers to Sellers: Just How Low Will You Go?

Low-ball offers from home buyers seems to be the norm these days. But as economic and stock market woes continue, some buyers are using it as an opportunity to submit even lower offers, The Wall Street Journal reports.

"Buyers are going to use every point of leverage they can to get a lower price," Glenn Kelman, chief executive of Redfin Corp., told The Wall Street Journal.

For example, home buyer Ryan Goodman says he reduced bids on two homes he submitted in Barrington, Ill., because of the stock markets plunge. He and his wife had originally offered $680,000 for a home listed at $800,000, and this week submitted a new offer of $650,000.

"Unless we get a steal, we're not going to buy any house," Goodman says.

Analysts say that the Federal Reserve’s vow to keep short-term interest rates near zero until 2013 has reduced the urgency of buyers. It gives buyers “comfort that they are not missing out on low interest rates if they wait," says John Burns, a home-building consultant in Irvine, Calif. “That has tilted even more power toward home buyers.”

Source: “New Round of Upheaval Reduces Home Buyers’ Urgency to Do a Deal,” The Wall Street Journal (Aug. 19, 2011)